Systematic Investment Plan (SIP)

Download Systematic Investment Plan (SIP)

Post on 23-Aug-2014



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DESCRIPTION Min Investment of only Rs.500 Benefit from the Power of Compounding Link to your Financial Goals


Systematic Investment Plan (SIP) Simple Min Investment of only Rs.500 Intelligent Benefit from the Power of Compounding Practical Link to your Financial Goals Did you know ? If your current monthly expenses are Rs. 30,000/- p.m, after 20 years you will require Rs. 80,000/- p.m to maintain the same lifestyle Assuming inflation rate of 5% Did you know ? An education degree for your child which currently costs Rs. 10 lakh will cost Rs. 21 lakh after 15 years. Assuming inflation rate of 5% Individual Investor Needs: Investment Goals All individuals need to save for - Retirement - Childs education / marriage - Medical emergency - Other family obligations Every individual has one or more of the above goals Individual Investor: Life Stages Earnings Consumption Savings 22 Young Independent 27 Young Married 40 Middle Age All individuals have a finite period to save for their investment goals 60 Retirement Value of Money over time Impact of inflation on monthly expenses of Rs. 30,000 today Value of Rs. 100,000 over time 100,000 79,599 78,353 62,368 48,102 38,288 37,689 30,000 Today 5 years 15 years 20 years Today At inflation of 5% Investors need to beat inflation 5 years 15 years 20 years Performance of Various Asset Classes Cumulative annualised returns 1980-2004 15.6% 10.3% 6.7% 8.9% 5.7% 3.55% -1.1% Inflation Gold Growth Bank FDs Real Growth Equities outperform other asset classes over the long term BSE Sensex Individual investors are scared of .. The Downside Risk in Equities The Risk of Market Volatility The Risk of Market Timing What else makes a material impact on investments in equity ? Investing in the BSE Sensex - 25 years Returns are from 1981- Dec 2005 16.90% 15.07% Fixed investment at highest sensex value every year Fixed investment at lowest sensex value every year Market timing does not matter over the long term 16.02% Fixed investment on 1st day of every month The Power of Compounding Debt Instrument Monthly investment Assumed BSE Sensex Scenario A BSE Sensex Scenario B Rs. 5,000 Rs. 5,000 Rs. 5,000 10% annualised return Final corpus From Jan 1, 1984 to Dec 31, 2004 - a 21 year period Rs. 43 lakh 15% Rs. 89 lakh 20% Rs. 1.9 crore Summary Investors needs to save regularly and invest those savings in higher return assets to create wealth Long Term Systematic Monthly Investment in equity schemes is ideal for this How Do You Achieve Your Financial Goals Retirement Childs education - international Family commitments - medical emergency, etc Retirement Planning Monthly Household Expenses 83,579 Retirement corpus required to meet post retirement expenses. (if invested at 7%) 1.4 crore 30,000 Monthly investment needed to meet post retirement expenses Inflation 5% at 12% 21 Yrs 12,583 at 15% Today At the time of retirement 8,083 at 18% 5,090 Childs Education Educational Degree 34,20,000 Monthly investment needed to achieve this goal at 12% 12,456 20,00,000 at 15% at 18% Inflation 5% 11 Yrs Present When your child actually goes for this degree 10,166 8,237 Childs Marriage 43,70,000 Monthly investment needed to achieve this goal at 12% at 15% 20,00,000 Inflation 5% 16 Yrs Present When marriage actually takes place 7,509 5,466 at 18% 3,925 So What Are The Benefits Of Investing Through A Systematic Investment Plan ! Benefit : 1 The Benefit of Long Term Equity Investment - Equities give superior returns among all asset classes over the long term - Mutual Fund has a track record of consistent good performance relative to index. Benefit : 2 The Benefits of Systematic Monthly Investment - Takes out the risk of market timing - Adds the benefits of the power of compounding and rupee cost averaging Benefit : 3 Flexibility - You can choose from a wide array of schemes - You can decide to keep invested amounts in an earlier scheme & invest future SIP instalments into a new scheme Benefit : 4 Added Convenience - Auto debit facility across major cities in India - Regular account statements - Redemption request directly credited into your bank account Make your investment goals a reality Start a S.I.P. today ! A Rupee Saved Is A Rupee Earned A Long Journey Begins With A Small Step For More Information Visit


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