SIPs in mutual funds can make you rich in the long run
Read in: 1min, Published On , 1 Aug 2016 By ET Wealth
Systematic Investment Plan (SIP) in equity Mutual Funds can create a large corpus for an investor over the long term without the investor stretching his monthly budget. Technology innovations in the banking space have made investing through the SIP route paperless, faster and a smooth experience.
A LARGE CORPUS COULD BE PLANNED THROUGH SIP FOR:
Building retirement corpus
Meeting child’s higher education costs
Meeting expenses for child’s marriage
Healthcare costs during old age
ADVANTAGES OF INVESTING THROUGH SIPS:
Help beat inflation over the long run
Instill investing discipline
FACTORS TO CONSIDER WHILE INVESTING THROUGH THE SIP ROUTE:
GOAL SETTING: Zero in on the reason(s) for investing over several years
ESTIMATE CORPUS: Consider inflation to calculate the corpus needed for each goal
RISK PROFILING: Find out how much risk the investor can take
SUITABILITY OF PRODUCT: Select the equity fund that is best suited for the investor
PORTFOLIO REVIEW: Check regularly if the investments are on track to meet the long term goals
PROFESSIONAL HELP: Consider engaging with a financial planner/advisor
There are several calculators on the web that one can use to estimate retirement corpus, cost of healthcare in future and cost of higher education. Here the determining factor are the rates of inflation
Similarly there are calculators which estimate the corpus size if an investor is investing through the SIP route. Here the determining factor are the rates of return for various types of equity funds
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