Go ahead and ask most investors about their goals. Most of them will undoubtedly tell you that they want to get rich. With every generation that comes and goes, there is a general consensus that investors don't just want to get rich, but get rich quick. Of course, this is easier said than done for most investors, but you can start investing early and earn good returns in the future. as such? By putting in place an effective investment called a Systematic Investment Plan or SIP.
With a tendency to increase your wealth over time, a SIP can gradually increase your wealth, in line with the growth of your usual income. So over a long period, you get good returns even if you invest small amounts in the beginning. The truth is that your earnings can be reinvested and you will get a positive compound effect in terms of returns.
According to AMFI (Association of Mutual Funds of India), mutual funds currently consist of around 5.5 million SIP accounts (https://www.amfiindia.com/mutual-fund). Seasoned investors will tell you that SIP is the simplest and most practical way to generate returns over a period of time. If you want to know how much return to expect in a specific time period of SIP, you can use our online SIP Return Calculator to provide this information with a single click.
Better investing than not investing.
If you're new to the investing scene but know one thing for sure, that you'd rather invest your money than spend it, or have it in a bank account, a systematic investment plan will likely interest you. Especially if you are just starting your career journey, you may not have large sums to invest in the beginning. If you try to sign up for a mutual fund, you may need to shell out a significant amount to start your investment. Not everyone has this type of capital. If you want to invest small amounts of capital on a regular basis, you can choose SIP. With the SIP Returns Calculator, you can see the returns you can make with a specific SIP.
Understand what is SIP
So now you realize that you can invest small amounts of money and get returns with SIP, but do you know what SIP really includes? You won't know how to use the SIP Return Calculator if you don't know how SIP works. Therefore, to start investing small amounts to get good returns, you must first be clear about how SIP works.
A regular investment plan is an investment mode offered by mutual fund houses, allowing investors to invest small amounts of money on a regular basis. Your capital is invested in a stock mutual fund, but instead of investing a large amount at once, you can invest small amounts of Rs. 500, regularly. The frequency of your investments can be weekly, monthly, or quarterly, depending on the mutual fund you choose. The beauty of SIP is that it allows small investors to allocate small amounts depending on the returns they want to earn. Also, the SIP Yield Calculator can help investors decide how much to invest.
SIP Customization
In addition to the convenience of SIP in making small investments that meet your needs, you have the possibility to customize your SIP, according to the returns you want to obtain based on calculations using the SIP Returns Calculator. Suppose you started with a minimum amount of only Rs. 500 per month i.e. Rs. 6000 per year, you can easily spread the amount and invest it daily, weekly, half-monthly, monthly, etc. This works in your favor depending on the money you have at your disposal. Today, most asset management companies allow customization to make life hassle-free for potential investors.
With all the facilities you have at your feet to make reasonable and calculated investment decisions, such as using the SIP Return Calculator to determine the value of your investment, you can even sign up for a SIP move. This is where the true SIP dedicated applications come in. Let's say you have already started SIP. You may have initially started with a monthly contribution of Rs. 5000 per month for your SIP. Now, let's say your income has increased and you want to invest more in your SIP. you can do that? Yes, you can. You can increase your SIP value by 10% or 20% in the year after your initial investment.
Small amounts, good returns
If you invest small amounts in SIP, you still have the potential to reap good returns in the long run. If you have made the decision to start SIP with a set amount based on your findings on the SIP Return Calculator, you can expect fruitful gains due to the compounding power that SIP provides. In recent years, SIP has produced returns of 15% to 18%. These returns, when reinvested in SIP, have a multiplier effect for you to earn more in the future. Since you are using the SIP Returns Calculator to assess your returns, you may find that increasing the amounts of your SIP contributions can increase your returns even more.
Advantages of small SIPs
SIP allows you to establish discipline in your investing habits and this gradually helps you invest rather than spend. Here are some of the more obvious advantages of investing small amounts of money to earn big rewards in the long run:
- You don't need to time the markets - When you invest in SIP with a small amount, and gradually increase your investment, you don't need to watch the market rise and fall frequently. If you invest a large amount, as in a regular mutual fund, you may be concerned about your investment and constantly check market movements.
- You get good returns with SIP, especially if you have used the SIP Return Calculator to initially assess the amount of investment. Investing in a SIP is the average of any expense ratio (which is a large portion of the expenses of a regular mutual fund). This means that SIPs save you money and you end up with higher returns.
- You save taxes so tax payments don't eat up your earnings. For example, if you invest in an ELSS fund through SIP, your investment is non-taxable up to 1.5 lakhs per annum (financial year) based on Section 80 C of the Income Tax Act of India.
- You get the advantage of the average cost in rupees in SIP. What this means is that the longer you invest in any SIP, the higher the chances of making a profit.
SIPs can be powerful
With a tendency to increase your wealth over time, a SIP can gradually increase your wealth, in line with the growth of your usual income. So over a long period, you get good returns even if you invest small amounts in the beginning. The truth is that your earnings can be reinvested and you will get a positive compound effect in terms of returns.