Invest and make profit rather than just saving

Have you ever seen a child being directly admitted to the 12th class without passing the lower classes? It does sound odd because it is an impractical thing. We do have an education system which is same for each and every child. The student has to step by step climb the stairs up to the success. It is rightly said by someone that there are no shortcuts to success. Even if a person tries proving the age-old saying to be a hoax, he may get success initially but ultimately end up devastated. Thus, one can understand the significance of consistency in each and every aspect of life.

Likewise, the mutual fund industry is a place which requires the clients to adapt an ongoing process for putting their money in any of the schemes provided by different companies. SIP or Systematic Investment Plan is one of the two methods adopted for investing in mutual funds. The clients can adopt this method for inculcating the habit of a continual process of parking their money surplus into the schemes to attain maximum profit.

What is the eminence of consistency in investments?

We all have heard about the story related to the racing competition between rabbit and tortoise. Rabbit is undoubtedly a faster animal, but his overconfidence beats him down, and tortoise, on the contrary, is slow, but his never dying efforts and his belief that he could be a winner made his success possible. In the same way, it may be possible that stock market may produce prolific returns in the beginning but will eventually show a downward trending graph. However, this doesn’t mean that the capital market cannot generate returns, but it is not possible for a commoner to speculate the market scenario easily.

This problem is solved through mutual funds, and the clients can invest without much efforts. Easing out the work of clients further, SIP reduces the burden of the clients to pay a huge amount in one go (as in stock market). There are a lot of companies that provide the facility of SIP investment plans which not only facilitates the clients to reduce their load but also increase their wealth by utilizing the power of compounding. This concept aims at delivering the best results for an invested amount over a greater time spell.

Myth regarding saving and investing

Saving and investing had been in existence since the time people started earning. One can see people take saving and investment to be synonyms of each other. But, same is not true. Saving on one hand where the client tends to accumulate a sum but does not earn a noteworthy return. The savings can be done through your bank account or post office or at your home even. Investment, on the other hand, is a method where the client puts his/her money in schemes that work in the direction of multiplying client’s riches. Hence, investing will reciprocate the money by facilitating wealth creation, while saving helps to accumulate an amount but does not provide much growth.

Online investment in SIP

With an advancement in technology online mutual fund investments have also joined the line of businesses that are metamorphosing in order to fulfill the expectations of the clients. From books to clothes, to electronics, to furniture, everything is available online. The reason behind this drastic change is the tiresome schedule that people have to follow these days. They do not have time to visit the market, so an online investment solution is a boon. Similarly, the clients who intend to invest but are restrained due to their busy life will now be able to select the perfect scheme for deploying the money sitting in their comfort zone. It is possible by maneuvering the power of online SIP investments. The clients have the freedom of selecting the type of SIP along with the scheme in which they intend to invest according to their needs.

A common instrument for investing in all schemes

Being the most popular method of investing, SIP helps to invest in all the variegated plans available under mutual fund industry. The widespread success of systematic investment plans has magnetized all the clients to adopt it as their investment technique. Whether it be an equity oriented scheme either a fixed income fund SIP can be adopted for every plan. The beauty of SIP investment plan is that it accommodates with all kinds of schemes easily and save the clients from unnecessary tantrums related to financial situations.

Who should opt for monthly SIP

The clients who believe in having a budgeted approach towards their finances should adopt SIP as their investment methodology. However, there is no set benchmark for the beneficiaries of SIP. Burt, it is advised to choose SIP for the novice investors who have commenced their career recently. One can always alter the amount of his/her monthly SIP investment plan as and when progress is encountered in the job.

Dishika is well-versed with the ups and downs of the financial market and has published articles on mutual fund and SIP. She is associated with MySIPonline.com, which is an AMFI registered mutual fund company.