Yes! The festival of lights is round the corner. It is the best time to light up your life and start your financial planning. Make your new beginning this New Year for great results in the future through proper financial planning.
This Diwali, when you invoke the blessings of Goddess Laxmi, do think about starting your investment plan. The best and the easiest way to do it is to start a mutual fund SIP.
Here are three pertinent reasons to start a mutual fund SIP this Diwali:
Benefit from average investment
The main idea behind a Systematic Investment Plan or SIP is that you invest a predetermined sum of money every month for a specified time. This brings high levels of discipline in your savings. Since you are investing at a regular basis on regular intervals, your overall investment price is averaged. Thus, you are less likely to be adversely affected by the fluctuations of the market.
No need to commit a lump sum at once, invest as you go
SIP investment is based on the age-old theory ‘small money makes big money’. In simple terms, you need not invest huge lump sum at once when starting SIP. In fact, the smaller investments that you would make over time will allow you to create a good investment lump sum. Therefore, with a mutual fund SIP, it is invest as you go.
Invest small regularly to gain big in the future through the compounding effect
It is a very good idea to invest early in life even if the amounts are small. This way you can experience and benefit from the power of compounding over the years. You can start your SIP with small amounts and increase these gradually as your income levels rise. For instance, if you commit to invest Rs.1000 every month for the next 12 months, you would give standing instructions to your bank to remit the desired funds through ECS to the mutual fund company on a fixed day each month. The NAV of the fund may change every month. At the end of 12 months, you would have averaged out your investment price in the fund. You can start investing with as little as Rs.500 to experience the power of compounding.
Explained simply, compounding is a snowball effect that ensures your earnings generate even more earnings. You receive interest not only on your original investment, but also on any interest, dividend, or capital gains that accumulate over time. Your money can grow faster and faster as the years go by and even before you know, you may achieve your financial goals.
Thus, invest now in MF SIP, invest regularly, achieve big goals with small investments every month, and start with as little as Rs.1000.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.