Every person in today’s world want to earn some extra benefits. Sticking on just one source of income is not in practice now and of course, cannot be because of the hike in inflation rates. For earning more one need to get indulged in more than one source so as to get some extra earnings.
All of us are very much aware about the the concept of investment as well as the yields associated with it. Yes, we want to get maximum return on our investment with limited or no risk. Here comes the need to plan a proper investment so that we could get what we want.
INVESTMENT PLAN - DO YOU KNOW WHAT IT IS?
Planning is, thinking in advance about future scenario and then coming up with a strategy as to how we can achieve our goals in the future.
Accordingly, Investment Plan is a strategy of making investment, which is made for the future to earn maximum profits.
CHOSING A BETTER PLAN!
Which is a better plan?
The answer to this question cannot be in one or two words. This is because every one plans with some different objectives. For some, good returns with no risk is the main objective while for others the aim can be to earn high yield only.
But, in general sense, if we talk about the benefits of the investment plan, a better plan can be proved to be the one and only, which
Rupee cost averaging - We cannot predict the movement of market that whether it will go up or down. Even, the professional cannot provide us with the future fluctuation rates because they are very uncertain and depends on many different factors.
Rupee cost averaging here provides us to out of the guessing game of trying to buy less and sell high.
We can understand this concept with an example,
Suppose you invest Rs.1000 every month and NAV(cost) of the unit is constantly changing (increase or decrease), hence at the end of the year on calculating we will come to know that on an average basis we have invested less and earned higher as compared to that in case of lump sum, where the whole investment is made at one time only.
Accordingly, under the SIP scheme advantage of market dips can be taken.
Under this, the money shall buy more share (units) when price reduces and less when price increases and on an average shall provide for lesser cost.
Power of compounding - Compounding concept of finance refers to earning interest on interest. Under this, the investor earns interest on the principal amount and an additional interest on the interest so accrued on the principal amount.
An example for this can be , say you invest Rs 10000 at a simple interest of 10% for 10yrs. After 10yrs you will earn rs.20000.
On the contrary if you invest Rs. 10000 at 10% compound interest for 10yrs then after 10yrs you will earn Rs.27070 which is higher than simple interest.
SIP also provides for this compounding benefit as the interest earned on SIP is compound interest only.
To get benefited with the compounding scheme the investment shall be made for a longer period of time. Longer the period of investment, higher the amount of interest.
Less burden on the investor - one more important benefit of investing in SIP is its minimum capital investment limit.
This means in SIP an investment can be made by starting with an amount of just Rs.500 or Rs.1000 pm and this is really helpful for the less income groups.
So, we are not bound with any minimum capital requirement under this scheme.
Hassle free process - SIP does not require a regular attention of the investor. Once you are enrolled under the scheme, you can allow your bank to debit the amount automatically from your account and make investment.
This is how SIP can be a best investment plan for you. So just don't think more and start investing now via My SIP Online to earn a bundle of benefits.
All of us are very much aware about the the concept of investment as well as the yields associated with it. Yes, we want to get maximum return on our investment with limited or no risk. Here comes the need to plan a proper investment so that we could get what we want.
INVESTMENT PLAN - DO YOU KNOW WHAT IT IS?
Planning is, thinking in advance about future scenario and then coming up with a strategy as to how we can achieve our goals in the future.
Accordingly, Investment Plan is a strategy of making investment, which is made for the future to earn maximum profits.
CHOSING A BETTER PLAN!
Which is a better plan?
The answer to this question cannot be in one or two words. This is because every one plans with some different objectives. For some, good returns with no risk is the main objective while for others the aim can be to earn high yield only.
But, in general sense, if we talk about the benefits of the investment plan, a better plan can be proved to be the one and only, which
- provides for comparatively high returns
- are less risky
- are safe and secured
Why SIP (Systematic investment plan)?
Anything, which is done in a systematic way is proved to be efficient and effective. Similarly, the very concept of SIP is to provide for an effective and efficient plan of investment to the investor.
SIP,Anything, which is done in a systematic way is proved to be efficient and effective. Similarly, the very concept of SIP is to provide for an effective and efficient plan of investment to the investor.
- where one can start investment with a lesser amount of Rs 500 only per month.
- Periodically, a certain amount is debited from the bank account of the customer which is put into an investment project.
- Investor is benefited with the compounding power of the scheme.
- It also provides for cost benefit due to the rupee cost averaging concept associated with it.
- Early the investment more shall be the benefit it will fetch due to the compounding power.
Rupee cost averaging - We cannot predict the movement of market that whether it will go up or down. Even, the professional cannot provide us with the future fluctuation rates because they are very uncertain and depends on many different factors.
Rupee cost averaging here provides us to out of the guessing game of trying to buy less and sell high.
We can understand this concept with an example,
Suppose you invest Rs.1000 every month and NAV(cost) of the unit is constantly changing (increase or decrease), hence at the end of the year on calculating we will come to know that on an average basis we have invested less and earned higher as compared to that in case of lump sum, where the whole investment is made at one time only.
Accordingly, under the SIP scheme advantage of market dips can be taken.
Under this, the money shall buy more share (units) when price reduces and less when price increases and on an average shall provide for lesser cost.
Power of compounding - Compounding concept of finance refers to earning interest on interest. Under this, the investor earns interest on the principal amount and an additional interest on the interest so accrued on the principal amount.
An example for this can be , say you invest Rs 10000 at a simple interest of 10% for 10yrs. After 10yrs you will earn rs.20000.
On the contrary if you invest Rs. 10000 at 10% compound interest for 10yrs then after 10yrs you will earn Rs.27070 which is higher than simple interest.
SIP also provides for this compounding benefit as the interest earned on SIP is compound interest only.
To get benefited with the compounding scheme the investment shall be made for a longer period of time. Longer the period of investment, higher the amount of interest.
This means in SIP an investment can be made by starting with an amount of just Rs.500 or Rs.1000 pm and this is really helpful for the less income groups.
So, we are not bound with any minimum capital requirement under this scheme.
Hassle free process - SIP does not require a regular attention of the investor. Once you are enrolled under the scheme, you can allow your bank to debit the amount automatically from your account and make investment.
This is how SIP can be a best investment plan for you. So just don't think more and start investing now via My SIP Online to earn a bundle of benefits.
I always trying to find that kind of blog for SIP investment and it's plan, you have done good work on this blog as i am able to see here, keep doing well....
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ReplyDeleteThank you for sharing such great information.It is informative, can you help me in finding out more detail on Investment Plans
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