Systematic Investment Plan
The best way to earn more money is to let money work for you by investing it smartly.
These days lot of people are ready to jump into the world of financial investing because nowadays you can start investing with as little as $10/month and receive higher returns.
In other words, Systematic Investment Plans help you to start investing with a small amount of money regularly, instead of waiting to create a large corpus for investment. Also, it allows you to choose your preferred period of payment i.e. monthly or quarterly and invest according to your convenience.
Benefits of SIP
Majority of people follow the wrong approach to earn, spend & then save instead of the correct approach to earn, save than spend. SIP allows you to follow this correct approach. In fact, it also makes it better by replacing save with invest. It puts your earnings into investments regularly.
It is advisable to set SIP installment date near your inflow date so that you invest before spending. This planned way of investment builds discipline and helps in accumulating wealth.
Many are governed by their emotions when investing. They start investing when there is an optimistic mood around them (bull market) and stop investing when there is a pessimistic view around them (bear market).
Investing via SIP means that a fixed amount will be invested regularly irrespective of your mood, hence emotions don’t overpower your investment decision.
Since with SIP you start investing early with small amounts, instead of waiting for accumulating large amounts of money you gain from the power of compounding.
It’s a known fact that markets are volatile and therefore risky. Timing the market is not possible. SIP helps in reducing the risk of investing in equity by making volatility of market work in favor of the investor by cost averaging.