In life, it is better to have control over things, before they have a control over you. The same applies for money as well. If money has an upper hand, then it subsequently gets a control your freedom, aspiration, life, and almost everything. Surely, you don’t want that scenario. So, what can one do to avoid this? One way to is to achieve financial freedom. Creating a financial plan is the primary step towards financial freedom. SIP mutual funds is a good way to create financial freedom and achieve your financial goals, be it short-term or long-term. Now, the question arises, what is the ideal SIP amount to invest in mutual funds? Before we answer that question for you, let’s quickly recall what an SIP is.
What is an SIP?
Systematic Investment Plan or SIP is a mode that allows investors to divide their investment amount into several small, insignificant investment amounts. Under SIP investment, regular investments are made towards mutual fund schemes periodically for a given duration of time. The periodicity of the intervals can be daily, monthly, quarterly, yearly, according to an investor’s convenience.
What is an ideal amount to invest in SIP?
In the world of investment, there is no right or wrong. You must not invest in mutual funds via SIP just because your friends or relatives are doing. Mutual fund investments do not follow the concept of one size fit all. So, the investment amount that you decide to invest must be arrived after careful analysis and not on some ad-hoc basis. To derive the right amount to invest in SIP mutual funds, you can use an SIP mutual fund return calculator. An SIP calculator helps to derive the right investment amount needed to reach a particular amount over a specific period of time. After calculating the ideal SIP investment amount through mutual funds returns calculator, you must ensure that it aligns with your investment horizon, financial goals, and risk profile.
How to invest in SIP?
Investing in mutual funds via SIP is a seamless process. Start by identifying the mutual fund schemes that you wish to invest in to achieve your financial goals. Determine the right SIP investment amount required to invest in SIP mutual funds. Stay invested to fully realise the value of your mutual fund investments until your goals are met. Give your bank a standing instruction to deduct a particular amount from your bank account and transfer it to buy mutual fund units on a particular date at regular intervals.
How long should you stay invested?
The time duration for which an investor must stay invested in SIP mutual funds is depended on their investment horizon. Ideally, it is a good idea to stay invested in mutual funds through SIP mode of investment for a longer duration. Hopefully, this article has answered all your queries regarding SIP mode of investment. So, what are you waiting for? Invest in mutual funds via SIP today to realise your financial goals and take a step towards financial freedom. Happy investing!