Investment & savings are two topics which we never learn in school or any college, what we learn is how to get a job. Yes after getting a job, we actually focus on purchasing new things, accessories, parties, etc but we never give a single thought to save a single penny for our future. And this is actually happening with every person at an early age but yes we all bring in it later on after we understand its importance.
Approx at age of 23-24 we entered into the job and simple human tendency is to first enjoy the time being earnings and savings can be done later, yes the basic reason is lack of proper financial planning which make our investments delay. So what can be done? A question arises in the mind of every individual when they face any uncertain situation. It’s not so hard to invest what all is required is a mindset of doing it so.
How Can We Make the First Investment?
Systematic Investment Plan (SIP)
It is a simple way of investing a fixed amount regularly with discipline irrespective of the stock market hours. It is a recurring deposit in mutual funds.
A very basic instrument in which investment can be done is the Mutual Fund. One can allocate 10 to 20 % of salary in its initial stage for start investing, Yes for starting up mutual funds SIP are the best route and it’s not required to go with a huge sum one can proceed it with a small some of Rs.500/-, yes this is correct seems easy.
Actually when we all move out with friends & family spending a huge sum on a normal dinner in the restaurant seems very low, though it cost more.
Importance of Systematic Investment Plan:
The investment amount is small: SIP investment requires a very small sum of Rs. 500/- which actually doesn’t create any sort of burden on any individual earnings. Even many funds offer a minimum sum of Rs. 100/- too.
Disciplined way of investment:
SIP is the best way to start investing regularly as it takes one-time registration than with help of ECS fund will be directly debited from a bank account
SIP is a kind of investment deducted on a fixed date every month from your bank account. It’s actually like depositing regular instalments for our future benefits.
Increase or decrease the amount:
An individual can increase the number of SIP’s or can increase the amount as per his/her convenience, It actually depends upon the goal of an investor.
Benefits in long run:
SIP is a route of indirect investment in the equity market via a route of mutual funds, we all know equity markets are very volatile in nature on day to day basis but it gives the best return in the long term horizon. As in long term, we receive the benefit of rupee cost averaging.
Rupee cost averaging:
We are aware of the market it is volatile in nature which some times leads to a fall in stock prices also, in a similar manner NAV of funds also falls in continuation of SIP it is more beneficial because in this case buying is done with low price compare to the previous month.