Building Wealth with Mutual Fund SIPs

The Power of Small Investments

Did you know that you can create a considerable corpus by investing small amounts regularly? Mohan started putting aside Rs.5000 in a mutual fund SIP when he was 30 years old. After 15 years, when Mohan needed funds for treating his father's cataract, his fund had grown to a whopping Rs.25 lakhs (approximately) at an assumed average return of 12%. He paid for the surgery easily by withdrawing only 10% of his investments and was happy with the decision to start a SIP.

Start Early with Mutual Fund SIPs

Waiting to accumulate considerable funds to invest in a mutual fund scheme costs you a return that you could have earned had you started earlier. Thus, you can choose mutual fund SIPs (Systematic Investment Plans) and start investing small amounts early on without waiting for the ‘right time'.

SIP vs. Lumpsum Investments

There are two ways of investing in a mutual fund- lumpsum or systematically through a SIP. A SIP is a systematic route of investing that helps you attain your financial goals faster and in a disciplined manner. To get a better idea, you can use a mutual fund calculator that can help provide you with essential information that helps you decide how much to invest periodically.

Benefits of SIP Investments

The money you invest in the SIP gets invested periodically and gradually over time, which reduces the overall risk of volatility in your portfolio with rupee cost averaging. Thus, SIPs are a great way to start investing small amounts of money regularly, which can help you build wealth over time.

Understanding SIPs

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A SIP is a route of investing in a mutual fund managed by an expert. It helps you to invest money periodically and gradually grow your corpus over time. Thus, a SIP is excellent for people who want to start investing but have a smaller quantum of money to invest at once but wishes to build a larger corpus over time.

Utilize SIP Calculators

You can get an estimate of your SIP investing needs to fulfill your financial goals with the help of an online SIP calculator.

Achieving Financial Goals with SIPs

This section aims to provide you with the information you need about a systematic investment plan (SIP) and how it can help you achieve your financial goals. You can select the mutual fund's scheme for investment based on the SIP calculator, which allows you to analyze your financial objectives, risk appetite, and expected returns.

Choosing the Right Mutual Fund

You need to choose a specific mutual fund wherein you can invest your money systematically through the SIP route, which could be either equity or debt, based on your asset allocation and risk tolerance. Typically, you should invest in an equity mutual fund for long-term wealth portfolio building. You need to opt for the amount of money you wish to invest systematically every week, month or quarter and then opt for the scheme in which you want to invest. Setting up a SIP mandate can be easily done online once your KYC is updated with the registrar.

Plan Your SIP with Calculators

All you need to do before starting your SIP is to determine your financial goals and monthly investment. This can be easily calculated through any of the online mutual fund calculators. You can also use the mutual fund calculator apps that can help you examine your financial goals and help you with investment strategy. These online mutual fund calculators will help you choose a portfolio which could be aggressive, balanced or conservative, based on your risk appetite.

Advantages of SIPs

Why are SIPs a beneficial way to invest?

  • They are easy and within reach of small investors.
  • They help you build a disciplined investment habit through regular investments.
  • SIP investments benefit from the power of compounding over time.
  • Investments are made at a fixed date automatically, eliminating the need to time the market.
  • SIPs provide the benefit of rupee-cost averaging, which smooths out market volatility.
  • SIPs help investors systematically create investment portfolios to meet various financial goals.

Embrace Mobile Applications

Thus, SIPs are the best way to go about it if you want to invest in mutual funds. While SIP investments are a wise choice, how do you go about it? How about through a mobile application?