Systematic Investment Plan (Simplest Solution to Wealth Creation) SIP Systematic Investment Plan (Simplest Solution to Wealth Creation) RR Investor Capital Services

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 ? RR Investor Capital Services

Savings of Rs 100000 will minify year after year, due to …. RR Investor Capital Services

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…” RR Investor Capital Services 4

COMMON FEARS RR Investor Capital Services

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. RR Investor Capital Services

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 RR Investor Capital Services

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 RR Investor Capital Services 8

WHY ASSET ALLOCATION IS IMPORTANT 200000000 150000000 100000000 50000000 6 186984169 68933513 20769838 3013545 24 20 15 Amount after 30 years RR Investor Capital Services

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 30.13 lacs. You actually destroy wealth by putting money into Bank and post office deposits. RR Investor Capital Services

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 1.013 crore RR Investor Capital Services

24.6 lacs 1.01crore 76.9 lacs 24.6lacs RR Investor Capital Services 25 year old Preeti invests Rs.10000 annually for 10 years and stops. She does not withdraw any money. Rohit begins investing at 35 a similar amount of Rs.10000 annually. He invests for the next 25 years and he too does not withdraw any money. 1.01crore 76.9 lacs 24.6lacs RR Investor Capital Services

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 RR Investor Capital Services

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 RR Investor Capital Services

EXAMPLE OF LUMPSUM vs. SIP Performance of lump sum investment depends on the price at which they are bought RR Investor Capital Services

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 RR Investor Capital Services

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