1. Systematic Investment Plan (Simplest Solution to Wealth Creation)
SIP
Systematic Investment Plan
(Simplest Solution to Wealth Creation)
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2. FINANCIAL PLANNING FOR THE FUTURE
Birth & Education
Earning Years
Retirement
38 yrs
22 yrs
Housing
Child Education
Children’s Marriage
Phase I
Phase III
Phase II
Income
Age
Marriage
Children
60 yrs
Do You Want To
Compromise On Your
Living Standard After
Your Retirement ?
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3. Savings of Rs 100000 will minify year after year, due to ….
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4. MEANS TO ACHIEVE GOALS A SIMPLE SOLUTION TO WEALTH CREATION
INVEST EARLY +
INVEST REGULARLY (DISCIPLINED SAVINGS)
INVEST CORRECTLY (RIGHT ASSET CLASS ) =
WEALTH CREATION
“SUCCESS COMES SIMPLY BY DOING SIMPLE THINGS…”
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5. COMMON FEARS
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6. EXCUSES AND JUSTIFICATIONS
I do not have enough money to invest.
Ans : Minimum Amount require for SIP is as low as Rs 500
I am too busy making money to worry about managing it.
Ans : Fund Manager of any respective SIP mutual fund scheme will manage your money .
I do not have the time
Ans :Auto Debit System for paying the installments will save your money and energy.
I don’t have expertise to follow market movements and make investments at the right time.
Ans: There is no need to time the market.
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7. SIP SYNOPSIS
SIP is an investment program that allows you to contribute a fixed amount in mutual funds at regular intervals .
Invest a fixed sum every month. (6 months to perpetual - through post-dated cheques or Direct Debit facilities) .
Fewer units when the share prices are high, and more units when the share prices are low. Average cost price tends to fall below the --average NAV .
Merits of SIP –
Discipline Investor (Think of each SIP payment as laying a brick. One by one, you’ll see them transform into a building. You’ll see your investments accrue month after month)
Power of Compounding
Rupee Cost Averaging
Hassle Free
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8. BENEFITS OF EARLY INVESTING
JAMES
BOND
JAMES
BOND
Starting Age
25 years
40 years
Monthly SIP
Rs.5,000/
Rs.15,000/
Saving Years till Age 60
35 years
20 years
Total Amount Invested
Rs.22 lacs
Rs.36 lacs
Wealth at Age 60 years
Rs.26 crores
Rs4.80crores
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9. WHY ASSET ALLOCATION IS IMPORTANT 6 24 20 15
Amount after 30 years
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10. The same amount invested at 20% annually will grow to Rs 6.89 crores.
Systematic Investment plan (S.I.P) of Rs 3000 per month invested for 30 years and compounding at 24% annually will grow to Rs 18.69crores
The same amount invested at 20% annually will grow to Rs 6.89 crores.
Now if the return is changed to a conservative 15% the amount would be Rs 2.07 crores.
The same amount invested in a Bank at 6 % per annum will grow to a paltry Rs lacs. You actually destroy wealth by putting money into Bank and post office deposits.
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11. POWER OF COMPOUNDING
Preeti started investing at the age of 25. She invested Rs.10,000 each year for 35 years and then she stopped contributing.
Rohit started investing at the of age 35 and then invested Rs.10,000 each year for 25 years.
If they have invested Rs 10,000 annually till 35 years then they could have fetched Rs crore
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12. 24.6 lacs 1.01crore 76.9 lacs 24.6lacs RR Investor Capital Services
25 year old Preeti invests
Rs annually for
10 years and stops. She
does not withdraw any money.
Rohit begins investing
at 35 a similar amount
of Rs annually.
He invests for the next
25 years and he too does
not withdraw any money.
1.01crore
76.9 lacs
24.6lacs
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13. Graphical Presentation
RUPEE COST AVERAGING
By investing through SIP, you end up buying more units when the price is low and fewer units when the price is high. However, over a period of time these market fluctuations are generally averaged. And the average cost of your investment is often reduced.
Graphical Presentation
Thank You
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14. HASSLE FREE
It is a hassle-free mode of investment since you can issue standing instructions for the regular transfers of money into your SIPs.
SIPs inculcate the savings habit in investors.
On a regular basis you put aside affordable sums of money and without realising it, over the long run you could amass great wealth
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15. EXAMPLE OF LUMPSUM vs. SIP
Performance of lump sum investment depends on the price at which they are bought
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16. SIP Investors beat equity MF peers in returns race
Those who invested in mutual funds through the systematic investment plan (SIP) route benefited the most from fluctuating share prices over the past 2-3 years.
Top equity diversified funds have returned 16-18% in three years, SIP investors have earned returns in the range of 25-28% (investing into the same funds) during the same period.
Supposing an investor has invested Rs 1,000 every month (between November 23, 2006 and November 23, 2009), he would have pocketed a 31% return on his Sundaram BNP SMILE Fund, 29% on ICICI Prudential Discovery Fund and 28% on his HDFC Equity Fund. Sensex three-year return being 25% on a compounded basis
Source : Economic Times
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17. Thank you
Happy Investing
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