Why Investing in an SIP makes sense?

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Why Investing in an SIP makes sense
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• If you have been working for a few years, there
  is every chance that you have heard of investing
  for the future. There are tonnes of methods to go
  about doing this, but the kind of instrument you
  use and the type of returns you are looking for
  makes all the possible difference to your
  investment idea. Many of us think of investing
  today for a larger growth over time, and the best
  way to do this is to invest out of habit and more
  importantly make it a routine.

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Benefits of investing on a regular basis

• That is precisely when I realised the benefits of
  investing on a regular basis. Being able to track
  the kind of spends I make on a monthly basis and
  also put aside the monies that I want for the
  future. Not many of us think this way, but it
  makes a lot of sense to put in your money today
  for a rainy day tomorrow. An SIP mutual fund is
  the simplest way to do this. Your planning is
  much in advance and you are sure of being able to
  commit to that number in an easier manner. Most
  of us are sure of the kind of earnings we have
  month on month and if we can plan on putting that
  money in a sure place to get higher returns over
  a 2-3 year period, there is nothing more you can
  actually ask for.

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Making your first investment

• One of the first few points that I felt after
  making my first investment was the kind of
  returns I could get with a regular investment.
  So, instead of putting Rs 60,000 at the end of
  the year, I decided to put on Rs 5,000 at the end
  of every month. I never really felt the pinch of
  losing out Rs 5,000 every month and at the end of
  the year, I had a fairly nice amount invested in
  the mutual fund. This was a huge advantage for
  me a single earner who would have spent that
  money otherwise.

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Second advantage of investing in such funds

• The second advantage of investing in such funds
  was that I could average out my costs on the long
  run. Based on the fixed amount you invest every
  month, you are getting a fixed amount of units on
  that fund. When that fund increases or decreases
  in value, you are immediately getting a revised
  number of units. That almost guarantees that you
  averaging out your costs on the long term. So, at
  the end of the tenure, you are getting a gain
  either way from your investment.

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Benefit of Investing early

• More over, there is a lock in period when you
  invest in any of the systematic investment plans
  and if you ask me, that is a sure shot benefit
  for someone investing early in their career. The
  first few months of you earning money are going
  to be spent in thinking of ways to spend that
  money, you might as well think of saving that
  money and the best way to do that is by putting
  your money in your investment right at the start
  of the month and to have a lock in period of at
  least a year. That will ensure you not pulling
  your money out for a year and committed to it.
  That is a huge positive for an early investor.

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Simplest and easiest tool to set up

• Many of us look at an SIP as a complex investment
  tool, but in all fairness, it is the simplest and
  easiest tool to set up and make sure you are
  making a health return each year. There are going
  to be many such venues to make profits from, but
  from an early investor right to someone who has
  been putting money in the market for ages, a
  mutual fund is a sure shot idea. If you have been
  thinking about investing for the future and
  saving up for a rainy day, there cannot be a
  better time to get started. You would be able to
  see healthy returns quickly and also have
  stronger investment ideas come out of it.

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At the end of the day, you would also be able to
build a strong portfolio of investments and that
does give you a lot of benefits on the long run.
Many of us put the idea of investing to a later
date, the easiest and best idea is to start
investing today there is not a better time.
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Thanks!

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