Five Reasons to Start an SIP Right Now

Five Reasons to Start an SIP Right Now


Five Reasons to Start an SIP Right Now

Having a long-term financial plan is essential for your financial health. And knowing why to invest can also help a lot. After all, investments can provide income and are useful to protect and multiply your assets.
If you are already thinking about the studies of your minor children, buying a house, or taking a dream trip, for example, it is interesting to consider investing. It is possible to find good opportunities in fixed or variable income.
But is the investment really worth it for you? Check out the importance of investing and see 5 reasons to make your money work!

How SIPs work

Mutual funds and other investment companies offer investors a variety of investment options, including systematic investment plans. SIPs give investors the chance to invest small amounts of money over a longer period of time, rather than having to make large fixed sums all at once. Most SIPs require payments to plans on a consistent basis – whether weekly, monthly or quarterly.

The importance of investing

Having financial education and being able to save money are already important steps to organize your financial life. But many people fail to find benefits by not learning how to invest to allocate their reserves.In times of economic instability and market fluctuations, those who manage to have a financial reserve can benefit from resorting to saved money. Thus, one of the first advantages when investing is to compose a financial cushion.In addition, investment also facilitates specific purposes and future projects. From profitability, it is possible to accelerate the realization of dreams. And even build your financial independence and live on passive income.

However, it is essential to analyze the opportunities well and compare them to your investor profile to form a suitable investment portfolio. This is because every type of investment presents risks, from the lowest to the highest.In addition, it is necessary to think about the deadlines of the investments. Each option may be more suitable for a given period. Thus, you must evaluate short, medium, and long-term plans to decide on investments.

Five Reasons to start a systematic investment plan

There are several reasons to start a systematic investment plan right now and make your money work for you. Check out the 5 reasons below!

Best way to inculcate a savings habit

If you want to start investing, one of the greatest ways to do so is to register a SIP account. With as little as Rs. 500 in a plan, you can start a SIP online. It’s simple to set up an auto-debit from your bank account, which automatically invests a specific amount in a mutual fund of your choice on a monthly basis. Investing on autopilot with your bank can ensure that you save without missing a beat.

  • The power of compounding returns
  • Have you ever considered what it will be like to retire from the workforce and enjoy your life? Everyone wishes to have a trouble-free experience during this time, but this is not always achievable. After all, Social Security is a finite resource.
    As a result, systematic investment plans serve as a supplement to traditional retirement and a source of future income. As a result, you will have greater assurances that you will be able to obtain the resources essential to maintain your standard of living and quality of life.

  • No need to time the market
  • Investing in the stock market for the first time can be challenging. You may not have the necessary experience to follow company performance and invest in high-performing stocks. You can avoid having to time the market by investing in mutual funds through SIPs. The overall cost of buying is also averaged out because you invest over time rather than in a flat sum mutual fund transaction. The process is known as rupee cost averaging. If you buy a systematic investment plan during a month when the markets are performing well, you might obtain fewer units. When markets decline, on the other hand, you get more units. As a result, the costs are evened out when you start a SIP.

  • Naturally-diversified investment
  • Never put all your eggs in one basket when it comes to investing. Another option is to invest at different times and for different purposes. You may do all of this when you open a SIP online. You can invest in a variety of equities, bonds, gold, indices, and even commodities when you open a SIP account. One of the most significant advantages of a SIP is that SIP investments are inherently diversified, resulting in strong long-term returns.

  • Helps with goal-based investing
  • Many goals and dreams are lost along the way due to a lack of financial planning. It is common for people to feel frustrated for not getting enough money to achieve what they want.
    But what many don’t know is that the investment can make it easier to visualize the realization of a project. As you have seen, it allows you to have financial gains, accelerating the accumulation of money. Soon, you have help to achieve your goals.
    First steps to start investing
    Once you know reasons to invest your money and know why it’s worth it, it’s important to understand how to do it, right? Those looking for greater chances of profitability should know, in the first place, that this is not the only important factor.
    It is also necessary to think about the safety and liquidity of investments. So, you need to keep your investor profile in mind before you start investing. Then remember to analyze the options carefully to make more aligned decisions.
    Here are the first steps to investing:

  • have good financial control and make money to invest
  • know your investor profile
  • know what your financial goals and deadlines are
  • evaluate investment options and see the most suitable for you
  • Open an investment bank account and start investing.
  • Now you can answer the initial question of this post: after all, why invest? Each person has their own answers, depending on their dreams and projects. Be sure to consider what you saw here to start building your heritage as soon as possible!

    CA Mukesh Gupta
    CA Mukesh Gupta
    Mukesh Gupta is the founder and director of Wealthcare. He is Fellow chartered accountant, Certified Financial Planner and Certified Public Financial advisor. He is in financial services industry since 1994. He conducts free money management sessions for corporates and associations on topics related to Personal finance. His previous engagement was with Birla Sunlife group. He regularly writes on topics related to Personal finance and occasionally appear on electronic media.

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