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How SIPs Can Go a Long Way in Making Your Goals Come True
While the whole world is now trying to get out of the economic downfall amidst this pandemic, the small, regular investments are going to play a huge role in fixing it. In this situation, the only question that has been striking every investor's mind is: Which investment plan is more suitable for making my goals come true?
The best answer to this question would be a SIP. Well, this term will most likely come to your mind when you think about mutual funds. Why not? After all, it is one of the most convenient and beneficial ways to gain long-term wealth.
Investing your money in a small amount, in the right basket, and in a disciplined manner can become a real gamechanger strategy in today's time. Let's find out how the Systematic Investment Plan (SIP) can help you achieve your financial goals.
A Great Option Against Lowering Interest Rates
Nowadays, investors are well-aware of financial planning. Everyone wants better returns on the investment. However, the interest rates are lowering, which implies that they are not as good as they used to be in the past.
In this case, a smart investor will undoubtedly search for better returns and decide to shift to equity-oriented mutual funds. Considering the returns, it seems like SIP is a way better than recurring deposits (RD). Also, you can stop the SIP program at any time. It won't charge any fine on stopping. However, you may face a penalty on stopping recurring deposits.
It Inspires Regular Savings
Before investing, you have to identify and list down your financial goals. It can be buying a new house, educating children, purchasing a new car, or anything else. After that, keep a certain fixed amount aside and invest it regularly. Here, the role of SIP begins.
You can invest the amount as low as 500/- rupees per month at regular intervals, such as daily, monthly, or quarterly. Since investors maintain their SIP, it encourages a habit of regular savings in them.
It Works Well for Long-Term Goals
Note that SIP may not be the right option for short term gains. Equity markets are known to offer better returns in the long run. If you believe in setting long-term goals, starting with SIP would surely be the best choice. Regular investment of a small amount can potentially grow into a huge amount of funds.
It Offers Good Returns at Limited Risk
People often want to invest their money, but they cannot move ahead because of lack of knowledge. For them, SIP might become the best way to start. It allows investors to enjoy the excellent benefits of two dominant strategies -
- Rupee cost averaging
- The power of compounding
Get the Right Direction and Guidance!
The stock market brings numerous fantastic opportunities daily. However, people tend to overlook these opportunities due to market volatility, risk factors, analysis paralysis, investment losses, etc. You can get rid of all these factors by choosing SIP as it doesn't rely on the index movement.
In recent years, many people prefer to work with a financial advisor to manage their finances better. Remember, if you want to take full advantage of SIP and want to know the benefits it can bring your way, then you must seek professional help.
HappyWise Financial Planning is one of the leading names in the financial advisor industry. They can put your investment plan into action and also regularly monitor the progress. To start with, they first analyze your investment capability and then suggest a suitable investment plan. If you seek a profitable and disciplined financial direction, don't hesitate to get in touch with HappyWise.
Over to You!
As you can see, SIP offers numerous benefits to investors. It also protects them from various unforeseen harms. These harms can be short term risks, overspending, volatility, emotional and impulsive reactions, etc. Thus, SIP not only lessens your mental load but also helps you focus on financial goals.
The only thing you need to do is regularly invest a small amount for the long-term. This systematic investment will grow into a larger amount over time, which will be sufficient to meet your financial goals.
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Any facts, figures or references stated here are made by the author & don't reflect the endorsement of iU at all times unless otherwise drafted by official staff at iU. This article was first published here on 30th July 2020.