If you want to become a successful investor, you should learn on how to make investment in a systematic manner.
Most of us will agree that they want their hard-earned money to multiply, but generally fail to find a key to choice.
In such a situation, systematic investment plan (SIP) comes as the best possible option because it helps you earn higher returns on your principal money.
SIP is similar to regular saving scheme like a recurring deposit, as it gives an investor opportunity to start at a small sum which can be paid at regular intervals.
The amount you invest through SIP is used by experts of asset management companies (AMCs) to buy schemes or script like stock, debt and mutual funds market.
Due to the principle of cost averaging, more number of units are bought in a falling market and fewer units in a rising market. SIPs thus allow you to take part in the stock market, without trying to time it and also brings discipline to your investments.
Often, we are confused with what amount we should start SIP or what should the target of our investment.
Considering the booming mutual fund market, investment through SIP has given returns in the range of 8% to 15%. So let's understand how much do we need to invest every month if we want to start investment for longer term, let's say till 2050.
You can start SIP from an investment of Rs 1000 per month. From the calculator, you can see that by 2050, you would invest about Rs 4.20 lakh sum and find future value rising nearly up to Rs 44 lakh at an expected return of 10.50%.
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