The why is often more important than the how! This rings so true for SIP which is as you must be aware short of Systematic Investment Plan.
There are multiple reasons why you should start a SIP, we at higherhighs wealthmakers believe that you should at least save about 20% of your net salary in Investing for various goals. Everything does not necessarily be in Mutual Funds though we do think that it is one of the best ways to invest.
What actually happens when you invest in Mutual Funds – Let us first understand how Mutual Funds work. There are various AMC’s who have multiple of schemes under them. The fund manager of the scheme put the money in the equity or the debt market under various schemes like Large Cap, Mid Cap, Small Cap and many other type of funds.
The fund manager is a highly competent guy who has a team of reasearch analyst under him, they comb the entire 4500 plus stock listed in the Indian stock market and apply various fundamental analysis indicators to gauge if the particular stock is good to make fresh investment in the company
The important question here is why should you SIP? Well, the answer is quite simple – There are 2 major benefits apart from many other which can be listed.
- When you start a SIP you are starting an investment discipline which automatically is poised to create wealth for you if you keep it for long term where the compounding works like magic. Check with us how the compounding table works
- You get to benefit from Rupee Cost Averaging, that is you get more units in a falling market and when the market recovers you would have bought the units at a lower NAV (Net Asset Value)
We can go on and on with the benefits but if you understand the above 2 benefits you dont need a host of other reasons to start believing that SIP can generate awesome returns for you with limited risk
Get in touch with us to understand how we can help you get started on this journey
