Why Should You Run a SIP: Is it Beneficial?
There are manifold options wherein you can invest. You need to be absolutely choosy about what you wish to have and why. You should always keep your requirements and expectations in mind before you start any investments. What if you try SIP?
The concept of SIP
An SIP (Systematic Investment Plan) is an ideal way of investing in the mutual funds. It allows the investor to simply invest in regular intervals. It is a thoughtful way of investing and it aids in nurturing your habit of savings and accomplish the goal of wealth generation. You can even use a sip calculator to calculate your investment and all once you invest in SIP.
You know with SIP, you can easily invest on a quarterly, monthly or even weekly basis as per your convenience. A fixed amount gets auto-debited from your or the policyholder’s account and gets invested in mutual funds. Remember a pre-decided number of units are allocated at the current market price. Since these plans are somewhat flexible in nature, the investors can improve the sum or discontinue investing in the plan once they want to.
Why to invest in SIP?
It would be nice if you look into an example of a common man. Max, a thirty two year old bookkeeper lives in a rented house with his beloved wife and a 4 year old son. His prime financial goals for the next 20 years are, simply to buy a car and a house and get his beloved son settled. He invest in bonds but that is all. when projected into the future, his savings (generated from bonds) are not going to be that sufficient to suffice his future expenditures and he may fall short of accomplishing his goals. It would mainly be because of reasons like:
- The unfriendly fact that the inflation is going to grow faster than that of the returns, eventually shadowing the savings he did at the end of investment tenure.
- Had he invested in that of the equity instruments rather than that of any bonds, he would have earned a higher as well as better return.
Well Max justifies his choice one the excuse of safe playing. So the question remains intact, what should he simply do to attain a great growth without getting impacted by the uproar of the market. Well, the one way that he can attain his financial goal is buying a Systematic Investment Plan. And it is a great and a rewarding enough reason for you as well to get a SIP Investment.
How’s to begin with SIP
Speaking of SIP, getting prepared is as important as playing the game itself. You need to follow a few steps before you actually start investing.
- Set the financial aims for yourself– Your goals should be particular and achievable.
- Set a specific timeline – choose when you need the money; this shall be the tenure of your investment.
- Decide how much you need to invest – With the help of a SIP calculator, find out the sum that you require investing regularly to accomplish your financial goals.
- Make a proper choice – Consult the right financial advisor and go for a plan that actually achieves your requirements well.
Conclusion
So, get started with your Sip at 5paisa and you would not regret it.
