Financial Planning tools- Systematic Investment Plan (SIP)

Systematic Investment Plan (SIP)

What if you plan to invest Rs. 30,000 per month with an annual expected returns of 20% for a period of 40 years and if you get Rs. 510.5 Crores? Sounds too good to be true? It is very much possible with Systematic Investment Plan (SIP).

Law of compounding: “SIPs returns are a miracle of compounding which is the 8^th wonder of the world.”

Check it out-
http://sipcalculator.in/

What is Systematic Investment Plan (SIP)?

Systematic Investment Plan or SIP is an investment scheme where investor invests a fixed amount regularly at a specified frequency (weekly, monthly or quarterly) for a fixed interval of time and benefit by the power of compounding. Using SIP, an investor can invest even Rs. 100 and yet enjoy wealth creation.  Compounding, though is a complex word, basically means that the returns on your basic investment are invested again, increasing your principal value and giving the more returns the following year.

Who can invest in SIP?

Any person having a regular income like:

Salary income

Rental Income

Interest income

Annuity income or

Retainer-ship.

Benefits of SIP-

• No need to speculate or focus on the timing and condition of the market. Believes in the concept of rupee cost averaging.
• It is a flexible type of investment. Investor can withdraw full or partial amount even during the tenure of SIP. The investment amount can be increased or decreased during the tenure.
• Amount is invested periodically, so there is little or no impact of market volatility (unit cost averaging).
• Passive and automated (monthly instalments can be deducted automatically).
• Small amounts can be invested. Most of the funds start as low as Rs. 100 per month!
• It also instils the habit of saving in an individual.
• The longer you invest, higher are the returns. 

Goal based SIPs:

·         We believe that goal based SIPs are the best investment tool for planning your finances. Be it for children’s education or marriage, retirement, asset purchase or simply planning a holiday. This will imbibe discipline in your approach and you will not be bogged down by the psychosis of greed and fear of markets and learn to concentrate more on the goals than the returns.

Cedrus Wealth Partners understand the need of each investor and their Goals and hence help the investors in customizing SIPs as per their needs so that the investor can get the maximum benefit out of it and be content about the future.

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