Unveiling The Secret Of Wealth Creation
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Unveiling The Secret Of Wealth Creation

SIP Online

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History of mutual funds
History of mutual funds

  • Having the roots reaching in the decade of 60s the mutual fund was a monopoly of UTI (Unit Trust of India)

  • But, gradually with the changing government policy the private players started to set their foot firmly into this business.

  • The regulatory body of mutual funds is SEBI (Security Exchange Board of India).

  • CAM and Karvy are the two RTAs working presently in the industry.

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What is mutual fund
What is mutual fund

  • Accumulating the money of investors with same investment requirements.

  • Reinvesting the accumulated money in stocks, money market instruments, etc. accordingly

  • Providing better and secured returns as compared to stock investment

  • Allowing two methods of investing viz, SIP and Lump Sum.

  • Benefiting from rising and falling market.

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Systematic investment plan sip
Systematicinvestmentplan (SIP)

  • Never depend on single income, invest to create a second source.

  • Creating wealth with small investment regularly.

  • Inseminating the habit of regular and planned investing.

  • The best recourse for the beginners in investment.

  • Making the retirement planning easy.

  • Synonym for recurring deposit.

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Illustration for better understanding

  • Raghav has been placed in a renowned company through campus placement. He earns a handsome salary and tends to invest some amount for the view point of capital appreciation. But, at the same time he is unable to spare a colossal amount for investing. Now, he is facing a dilemma.

  • His friend Mohit advised him to try monthly SIP.

  • He gave it a shot and discovered that he was not only able to save a good amount for the month but was getting quite a good return on it.

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Illustration for better understanding1

  • Raghav started investing Rs. 3000/- as monthly SIP.

  • He intended to the money for coming 10 years at the rate of is15% per annum.

  • The total investment Raghav will make will make will be equal to Rs. 3,60,000/-

  • The growth that his fund will make will be around Rs. 4,75,972/-

  • Therefore, his return will be the sum of total investment and growth that will be equal to Rs. 8,35,972/-.

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Key concepts of sip
Key Concepts of SIP

  • The SIP is no magic. It works on two cardinal principles : Rupee Cost Averaging and Power of compounding.

  • It is just a method to invest in any scheme; not an investment scheme itself.

  • Based on the concept of consistent investment strategy.

  • Making investment trouble-free.

  • Ensures security for the money invested by the investors.

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Rupee cost averaging
Rupee Cost Averaging

  • What is the value of Re. 1? You might say nothing.

  • SIP understands the value of a single penny. One rupee invested is equally important.

  • This concept of SIP conveys the message that never break your investment whether the market is bullish or bearish.

  • When you continue to invest in both the situations then your profits are also averaged.

  • In some months you get higher returns while in some lower but the average of all the months will give o notable gain.

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Power of compounding

  • Investing for a prolonged period will give your money the much required spell to give optimum returns.

  • The significant difference can be seen in the table below:

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Misconceptions related to sip

  • SIP is only for beginners.

  • Rupee Cost Averaging can be done in the stock market also.

  • Missing one or two SIP will lead to the loss of

  • entire previous amount that was invested.

  • SIP does not allow one-time investment if there is a surplus with the investor.

  • The best time to start a SIP is when the market is bullish.

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Clearing the misconceptions

  • SIP is scheme which can be taken up by any investor. It carries no restriction.

  • The stock market does not allow Rupee Cost averaging. It solely a feature of SIP.

  • If you fail to pay some installments of your SIP your previously invested amount stays intact. You can reactivate the SIP again from the point where you left.

  • You can at any point of time invest a surplus amount in your SIP scheme if you have extra money.

  • You can commence SIP at any point, regardless of the market situation.

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Sip calculator

  • It is a handy tool facilitating the online investors to adopt correct investing strategy.

  • It gives unambiguous results.

  • It has a very user-friendly approach.

  • Less number of inputs are required to produce a desired result.

  • Client gets relieved from the back-breaking task of complex calculations.

  • Submit the required data, click a button and the desired result flashes on your monitor.

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Sip calculator calculation

  • In the below SIP calculator you need to enter two inputs

  • The amount of SIP you agree to invest on monthly basis, here INR 1000

  • The tenure of the investment, here 15 years

  • The returns are calculated at 15 % CAGR (Compounded Annual Growth Rate)

The result of the calculation

  • In the figure the first amount is the summation of the SIP (INR 1000) you will pay monthly

  • The next amount signifies the total growth that your invested amount will make.

  • The third value in the figure is the corpus you will get at the maturity.

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Lump sum investment

  • It is a one-time investment in the mutual funds.

  • This form of investment is suitable for the clients who cannot manage to spare a fixed monthly amount.

  • The Lump Sum amount can be paid quarterly or yearly.

  • It is a good option for the business fraternity whose monthly income keeps fluctuating.

  • It also suits the professionals who switch jobs frequently.

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Invest Through Proper Channel And Enjoy An Exhilarating Corpus.

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