The Power of Systematic Investment Planning (SIP)

Systematic Investment plan or SIP is one of the best investment tools for anyone who has a regular income. If you are a young salaried and want to save money, there is nothing more convenient than an SIP.



Investing fixed amount of money on fixed date every week, month or quarterly is called Systematic Investment.

There are three main options you can choose for investment in this plan.

1. Shares - Buying same amount of shares every month without looking at price.
2. RD in Banks - same amount every month being fixed
3. SIP in Mutual Funds - Investing same amount of money every month on a pre-decided date

Any option can be taken according to your risk profile.

Let's see the pros and cons of each option.

1. Buying shares every month in a fixed quantity is a good idea. But as we all know, investing in shares requires lots of research, good amount of money and lots of time to monitor. Risk is very high in shares and it gives the option to choose fixed quantity but not fixed amount of money. So you cannot plan in advance how much money you will need every month.

2. Bank RDs are safest option as it gives you fixed maturity amount after a fixed period. But there are a few things that make it less popular option.

• Low liquidity. If you want to withdraw money before the maturity date the return will be less than expected.
• You cannot partially withdraw small amount in between even if you need it.
• The interest rates are very low compared to other options which make it less popular in young people.

3. Mutual Funds SIP offers most flexible choices according to your budget, liquidity and risk profile. You can even start from just Rs. 500/- a month and withdraw within 7 days if you need it in emergencies. You get returns as good as share market but no need to do any research as you money will be managed by professionals. It makes it less risky in comparison to direct shares. It is very much recommended to take advice from Independent Financial Advisers to plan your investments and help you achieve your Long Term Financial Goals.

I will share a real life example of planning we did for one of my esteemed client who has taken a Home Loan in Year 2016 for 45 Lakh Rupees (Monthly EMIs payable for next 20 years) and is now planning to pay it off completely by Year 2025 with the help of Systematic investing in mutual funds. He wanted me to plan his part of SIP investment in such a way so that he could reduce his total home loan outstanding by systematically withdrawing 5 Lakh Rupees every year and to clear it off completely well before Year 2025.

I am so glad to share that he has already paid off 10 Lakh Rupees in last 2 years and now his total Home loan outstanding has come down to 35 Lakh Rupees. I salute him for keeping his trust in me despite all kind of volatile moments in equity markets in last 5 years of our relationship. I simply love to share his example in my presentations while meeting with new clients.

Stay healthy and keep investing.

For all your investment needs, call WealthMaster.in Team @ +91-9810582989 or email at wealthmaster.in@gmail.com

Disclaimers:

The views expressed in the blog are those of the authors and do not necessarily reflect the official policy or position of any other agency, organization, employer or company.

Insurance is the subject matter of solicitation.

Mutual Funds investments are subject to market risks. Please read the offer documents carefully before investing.

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Start investing early for a smooth retirement

Are you ready to start planning for your Old Age ? It doesn't matter if you are 32 years Old or 52 years Old, there are various essential steps that you should take to plan your retirement.


The first step in planning your retirement is determining your future. There are a number of important questions that you have to ask yourself - 

Where do you want to live when you retire ? 
How do you want to live? 
Knowing your old age needs and 
What is important when looking to create a retirement savings plan. 

Even if you are only 20 or 30 years old, you can still plan for your retirement.1 - 2 small changes to your dream plan aren't going to be the end of the world. At least you have a starting point to create savings for your Old Age.

Engaging in a set goal to reach is one of the best ways to accurate and successfully save and prepare for your Old Age. 

Even though you have made the decision to save for retirement now, there may come a point in time when you find yourself on a fixed income. It is no secret that living day-to-day on a fixed income can be stressful, overburdened and fearful. As a matter of fact, seeking professional advice can help prevent you from making many common mistakes. When looking for help, it is a wise idea to speak to a Certified Financial Advisor.

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Retirement Made Easy With Mutual Funds

With the advances in healthcare and science, people are more than likely to live beyond 65. However without a fixed income every month, living beyond retirement is becoming quite the task. In such cases, it is always best to start financial planning long before you actually have to retire. Keeping in mind that inflation continually challenges the purchasing-power of whatever money we do have in our hand, planning for a time when there is no steady inflow of money seems like the only smart way to live. While setting aside a small part of our income, or even saving half of our daily wages may seem enough for our non-working years, the market is always volatile. Saving half of our earnings may be enough today, but tomorrow we might need more. In order to take care of the amount of money we are likely to require in the future, investing may be our only option. However, the risk of investing is no secret, so how exactly do we find a fairly safe investment to ensure a better retired life?

One of the ways in which we can work towards a secure future is by investing in mutual funds. One of the biggest benefits of mutual funds is that they have a lower risk as compared to individual stocks and bonds. This is because in these funds, the investment is diversified and many people invest in a single fund. Apart from the low risk, investing in a fund means that a professional will help overlook the investment process. This means that we ourselves need not spend every morning buried in the business pages of the newspaper. Your share in a mutual fund investment can also be liquidated at any time, so there is no risk of your money being kept out of your reach, should you need it at any point of time. However, it is important to remember that an investment is never without risk, and mutual funds are no exception to the rule. Even though these funds are managed by professionals, these professionals may also make mistakes. Therefore it is always best to double check your investments before finalising anything.

Mutual Funds in India were introduced as early as 1963, and financial agencies came up with their own funds from 1987. The growth since then has been phenomenal, and today almost all financial institutions across the nation have their own funds. However, the mutual fund market in India is still not utilised well by the people. While the reasons for this may be several and varied, we must remember that we still need our futures to be secure. So take some time to read more about mutual funds and then invest in them.

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