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Is Wealth Creation Your Ultimate Goal? Invest In SIP Right Away!

Are you aware of the magical compounding effect of mutual funds? Do you prefer waiting and watching your funds grow from a tiny seed to a plant over the years? Is wealth creation one of your immediate goals in the near future? It is high time that you considered a SIP or a Systematic Investment Plan. Investing in SIP gives you the benefits of the Big 3. Your investment is as simple as a Recurring Deposit, your asset classes are multiple and versatile and your portfolio the potential to give you great returns. In an ever-evolving economy, a systematic approach to investments is much-needed and a SIP is just the right start to a financially rewarding journey.

What Are The 3 Things That An SIP Does Differently?

While all forms of investment aim to grow your wealth, SIPs have certain advantages that other products might not have. Listed below are 3 such things:

1.    Start as small as Rs. 500

For those who haven’t really built a capital yet but are still keen on investing, you would be happy to know that a SIP lets you invest as low as Rs. 500. Such an investment can be done at regular intervals and helps to build a strategic and disciplined approach towards investment.

2.    Rupee cost averaging

With a SIP, an investor does not need to continuously keep a track of the highs and the lows of the market. It is a given fact that the stock market is volatile in nature but when you invest in SIP, you can be at an advantage even when the market falls. You can add more units to your SIP account and wait patiently. When market conditions are favourable again, you can sell your units at profitable prices. This is the biggest benefit of a SIP, wherein, your cost of investment is averaged out and you can create wealth.

3.    Long-term compounding effect

For all of you who believe in long-term investments, SIP grows your money like none other. This is called the miracle of compounding effect and we will explain how. Research shows how different kinds of equity categories have given significant returns with a longer tenure of investment. In simple terms, you get returns on the money you invest and your returns further earn more returns, thus compounding your entire invested capital into a large sum of money.

5 Steps To Create Maximum Wealth Through SIPs

Although mutual funds are subject to market risks, you can successfully maximize wealth creation with SIPs by following 5 simple steps.

· Investing early in SIPs gives you a head start as you make the most of the compounding effect.

· Always diversify your portfolio and have an equal distribution in schemes to maximise your profits.

· Invest money that you can afford to spare. The emergency fund is not that money.

· Always opt for long-term investments to reduce the probability of getting negative returns.

· When you invest in SIPs, you have many expectations associated with the returns but following the right strategies is essential for the proper growth of your capital.

At Samriddhi, we take utmost care of your investments so that all your goals around it are met on time.

A Few Dos & Don’ts While Investing In SIP

Everyone tells you that investing in mutual funds could be tricky but how many of them tell you what to do? Let us help you with a few dos and don’ts so that you are an informed investor by the end of this article.

•  Do have a SIP specific goal

Every action, when attached with a purpose, gives you an idea about where you need to reach and by when. Take help from an investment advisor about identifying your short-term and long-term goals.

• Do stick around for longer

One rough patch and you withdraw your SIP. This is a mistake that even seasoned investors make. To create wealth, you need to be loyal to your SIP investment. The longer you stay, the more it grows.

• Do diversify

Investing all your money in one high-risk sector, with an expectation of higher returns, is the wrong way to go. Instead, invest in well-diversified funds to minimize your risks.

• Don’t think short-term

If you have short-term goals, avoid investing in SIP. You can make the most of SIP by investing long-term. If you leave midway, you will never reach your goal returns.

• Don’t pick the wrong schemes

Until and unless you are an expert investor, avoid picking up schemes that guarantee high returns in no time. At Samriddhi, we guide you to pick the scheme that is compatible with your financial goals.

• Don’t time the market

This often leads to a negative bent of mind and investors tend to lose a majority of their money. SIPs don’t need timing the market because if you let it be for a long time, it will continue to grow through favourable and unfavourable market conditions.

Concluding Thoughts

The proverb, “Slow and steady wins the race” holds true for SIP investment. To build a corpus and to meet your long-term life goals, SIP definitely the right pick. At Samriddhi, we can help you to assess your financial requirements and identify which scheme works for you so that this festive season, you can begin your journey of wealth creation without any hesitation. Open an account today to start your wealth creation journey.

Because, “When you know better, you do better”-Maya Angelou.

Koonal Jain

The writer of the above article is the director at Samriddhi Investment Services Pvt Ltd., A leading Financial Intermediary. He can be reached on [email protected]