thsraka.blogg.se - Hemlock sip definition

Thus, Compound Interest leads to an exponential growth of your money. Unlike simple interest, the compounding involves making the interest earned, a part of your base capital and the subsequent interest is calculated on the basis of this new increased capital. Well, there are two underlying mechanisms behind the working of SIP. But it is good to know how SIP makes your money grow. The handling of your money is done by money market experts and is none of your headache. Systematic Investment Plan(SIP) works more or less like a mutual fund. You can always log on the company’s website and track your portfolio. The sum that you invest every month in the chosen SIP is invested in a mutual fund and makes money for you. The money can be paid by post-dated cheques or through ECS (Electronic Clearing Service) in which you give a standing instruction to your bank to auto debit the investment amount from your account every month. Make a choice – Consult your financial advisor and go for a plan that meets your needs well.

Decide how much you need to invest – With the help of a SIP calculator, figure out the amount you need to invest regularly to accomplish your financial goals.

Set a timeline – Decide when you need the money this will be your investment tenure.

Set your financial goals – Your goals should be specific and attainable.

You need to follow 4 easy steps before you actually start investing in SIP. When it comes to SIP, getting prepared is as important as playing the game itself.

Well, the only way Ravi can achieve his financial goal is buying a Systematic Investment Plan.Īnd it’s a good enough reason for you too, to get a financial goal is buying a Systematic Investment Plan. So the question remains intact, what should he do to achieve a substantial growth without getting affected by the turbulence of the market. Ravi justifies his investing in bonds as he believes in playing it safe. Had he invested in equity instruments rather than bonds, he could have earned a higher return.The bitter fact that the inflation will grow faster than the returns, eventually dwarfing his savings at the end of the investment tenure.When projected into the future, his savings (yielded from bonds) will not be enough to suffice his future expenses and he’ll fall short of achieving his goals. His primary financial goals for the next 20 years are, to buy a car and a house and get his daughter married. Ravi, a 32 year old accountant lives in a rented house with her lovely wife and a 4 year old daughter.