SIP

Systematic Investment Plan (Simplest Solution to Wealth Creation)

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Birth & Education Earning Years Retirement38 yrs22 yrs

Housing

Child Education

Children’s Marriage

Phase I Phase IIIPhase IIIncome

Age

MarriageChildren

22 yrs 60 yrs

FINANCIAL PLANNING FOR THE FUTURE

Do You Want To Compromise On Your Living Standard After

Your Retirement ?

Savings of Rs 100000 will minify year after year,due to ….

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A SIMPLE SOLUTION TO WEALTH CREATION

“SUCCESS COMES SIMPLY BY DOING SIMPLE THINGS…”

MEANS TO ACHIEVE GOALS

INVEST EARLY +

INVEST REGULARLY (DISCIPLINED SAVINGS)+

INVEST CORRECTLY (RIGHT ASSET CLASS )=

WEALTH CREATION

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COMMON FEARS

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EXCUSES AND JUSTIFICATIONS

• I do not have enough money to invest.Ans : Minimum Amount require for SIP is as low as Rs 500

• I am too busy making money to worry about managing it.Ans : Fund Manager of any respective SIP mutual fund scheme will

manage your money .

• I do not have the time Ans :Auto Debit System for paying the installments will save your

money and energy.

• I don’t have expertise to follow market movements and make investments at the right time.

Ans: There is no need to time the market.

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SIP SYNOPSIS

SIP is an investment program that allows you to contribute a fixed amount in mutual funds at regular intervals .

• Invest a fixed sum every month. (6 months to perpetual - through post-dated cheques or Direct Debit facilities) .

• Fewer units when the share prices are high, and more units when the share prices are low. Average cost price tends to fall below the --average NAV .

Merits of SIP – Discipline Investor (Think of each SIP payment as laying a brick. One

by one, you’ll see them transform into a building. You’ll see your investments accrue month after month)

Power of Compounding Rupee Cost Averaging Hassle FreeRRFinance.in

JAMES

BOND

BENEFITS OF EARLY INVESTING

JAMES BONDStarting Age 25 years 40 years

Monthly SIP Rs.5,000/ Rs.15,000/

Saving Years till Age 60 35 years 20 years

Total Amount Invested Rs.22 lacs Rs.36 lacs

Wealth at Age 60 years Rs.26 crores Rs4.80crores

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WHY ASSET ALLOCATION IS IMPORTANT

6

186984169 68933513 20769838 3013545

24 20 15

Amount after 30 years

200000000

150000000

100000000

50000000

• Systematic Investment plan (S.I.P) of Rs 3000 per month invested for 30 years and compounding at 24% annually will grow to Rs 18.69crores

• The same amount invested at 20% annually will grow to Rs 6.89 crores.

• Now if the return is changed to a conservative 15% the amount would be Rs 2.07 crores.

• The same amount invested in a Bank at 6 % per annum will grow to a paltry Rs 30.13 lacs. You actually destroy wealth by putting money into Bank and post office deposits.

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Preeti started investing at the age of 25. She invested Rs.10,000 each

year for 35 years and then she stopped contributing. Rohit started investing at the of age 35 and then invested Rs.10,000

each year for 25 years.

If they have invested Rs 10,000 annually till 35 years then they could have fetched Rs 1.013 crore

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POWER OF COMPOUNDING

25 30 35 40 45 50 55 60

24.6 lacs

25 year old Preeti invests Rs.10000 annually for 10 years and stops. She does not withdraw any money.

Rohit begins investingat 35 a similar amountof Rs.10000 annually. He invests for the next25 years and he too does not withdraw any money.

24.6lacs

76.9 lacs

1.01crore

Thank You

By investing through SIP, you end up buying more units when the price is low and fewer units when the price is high. However, over a period of time these market fluctuations are generally averaged. And the average cost of your investment is often reduced.

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Graphical Presentation

RUPEE COST AVERAGING

• It is a hassle-free mode of investment since you can issue standing instructions for the regular transfers of money into your SIPs.

• SIPs inculcate the savings habit in investors.

• On a regular basis you put aside affordable sums of money and without realising it, over the long run you could amass great wealth

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HASSLE FREE

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• Those who invested in mutual funds through the systematic investment plan (SIP) route benefited the most from fluctuating share prices over the past 2-3 years.

• Top equity diversified funds have returned 16-18% in three years, SIP investors have earned returns in the range of 25-28% (investing into the same funds) during the same period.

• Supposing an investor has invested Rs 1,000 every month (between March 9, 2017 and March 9, 2020), he would have pocketed a 31% return on his Sundaram BNP SMILE Fund, 29% on ICICI Prudential Discovery Fund and 28% on his HDFC Equity Fund. Sensex three-year return being 25% on a compounded basis

SIP Investors beat equity MF peers in returns race

Thank you

Happy Investing

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