#sip calculator sbi bank | Explore Tumblr Posts and Blogs

radhikaschauhan · 4 years

Text

Early Retirement: How To Retire Early From Job (Indepth Guide)

Everyone, whether a male or a female, single or married, with or without kids, no one loves a monotonous life. A job of 9-5 can fill your pocket but may not fill your heart. Some want to retire early, travel and explore places or spend time with their family. On the other hand, some have high aspirations of following their passion. So, in this article, we will discuss more on early retirement and how to retire early from the job.

Scenarios That Frames The Thought Of Retiring Early

Until and unless a thing strikes too hard in our brain, we don’t divert into something better. For instance, until you face the problem of excessive workload or lack of time towards your family, you won’t understand if you need to change your job. You might get the feeling of a ‘duty’ in your work life and may not enjoy it. Then, it becomes high time for you to decide for any other alternative. Thus, you can either alter your job or set up your plans.

For altering your job, you can get into a new organization, a unique atmosphere. However, for setting up your own goals, you need to know the tactics of early retirement. Apart from that, there are several other strategies that you might need to adapt to create a better situation. We shall come to know about it in detail after a few paragraphs.

Fortunately, since you’re a human being, you can create your destiny. Isn’t it? Everything depends on your hard-work, effective plans, and it’s implementation.

Thus, several scenarios frame the thought of retiring early. Let’s know more about it-

1. It’s applicable for the people with more than one earning source. For instance, let’s say you’re in a management company, sideways you have an investment in the agriculture sector. Added to that, you’ve expended in the mutual funds as well. Thus, now you’ve 3 sources of income. Although the mutual funds will get rewarded in the future. Still, you have two other investments. Apart from that, if you make ideas, you can generate more sources of income even. For instance, you can rent people in your house and get a rental income. Then, you can go through several tricks to avoid tax impositions and thus, get more amount in return. The list doesn’t stop here.

2. As I’ve explained in the later paragraphs, you must devote a large part of your earning towards it. Well, this is the most important point that you must abide by for retiring early. Since you’re retiring early, you will miss out the last few years of your regular salary from the organization you were working. However, you can still maintain it or increase the curve with your previous savings. You can work on your savings platform by decreasing the extra expenditure on unnecessary items. There are more such ways which are discussed in the latter part of the article.

3. You must have a strong passion about a thing that you’ve always wanted to do. Retiring early just to eat and sleep is not a choice. It is because in today’s world, money is everything. You can’t live on just the love of your family, food, and a roof over your head. There are certain demands, necessities that you need to fulfill. For that, you need money. So, there’s no way how you can stop working without deciding what you need to do next or planned a back-up. You must frame a plan regarding what you shall do and when. You ought to keep working. However, since now the string is in your hand, you’re your boss. You don’t have to work under any rather hire workers.

4. At last, it’s again repeated that you must make regular savings and carry out heavy jobs in the beginning. It’s because you never know if your passion plan would work out up to the mark or not. Apart from that, you must also be sure if you can work on your passion for the rest of your life. If it does then well and good. Yet, if it doesn’t, you must utilize your back-up savings.

Now that we’ve known about the scenarios that frame the thought of retiring early. Next, let’s see how to meet the clauses of early retirement.

Strategies To Meet Early Retirement Plans

To meet your daily requirement plans, make sure you go through these strategies. Once you make up your mind with these headstrong thoughts, you’ll be able to cope up with the dilemma.

Meeting The Early Retirement Forethoughts

Have you seen a person earning in lakhs partying and clubbing every night? You may earn in lakhs per month, have a luxurious car. But, at times due to lack of time you sleep without food out of being tired. You are always engrossed in your laptop and unable to give time to your family. Is it what you call life?

Many want to change their lifestyle according to their sake. Yet, they end up waking up to their boss’s taunts in their daydream.

There must be various questions arising in your mind, right. How to retire early? How to earn after retiring early? Still, the most important aspect is how to meet financial needs? So many more questions.

So, let’s meet them one by one.

1. Begin Your Preparations At A Young Age

Preparing from a young age means getting a heavy bag of back-up money. Ever saved pennies to a small amount in a piggy bank? Then breaking it years after to get a small thing. The thing you bought might not be exorbitant but it certainly satisfies your heart. Isn’t it? Similarly, saving up a young age gives a better motivation than anything else.

Suppose, you’re an engineering student. You are not satisfied with your regular monotonous life. You were in your early 20s when you got a wonderful job with a good salary. Yet, you’re fed up with it and want to pursue your passion. But, for that, you need back-up capital. That is, in case, it fails, you at least have something to meet your needs. For that, you can save up at least 25% of it every month for your future use, apart from other saving schemes.

Apart from everything, the earlier you start saving, the happier your mind stays. Thinking about a back-up future, you will get a happy feeling.

2. Think Wisely Before You Go For Any Investment

Having passion is all good. But, investing in something that has very low or no future would mean foolhardy. Before going for a serious investment, make sure you research about the field. You must know how to start, where to start, a trustworthy partner, etc.

It’s always safe to keep everything pre-planned and then go for the investment. Thus, leaving your job for your passion and investing everything in it is foolhardy. You must keep something as your back-up. Who knows if it fails? There must be adequate finance back-up to support you and your family.

For instance, there are amazing offers in investing in mutual funds these days. Apart from that, when you go to a secured place for MF, you don’t have to worry about its security even. Many banks providing mutual funds like SBI Bank, HDFC Bank, Kotak Mahindra Bank, etc.

You can choose any of these banks and get started.

3. Raise Your Savings With A Raise In Your Salary

When you were earning Rs. 40,000 a month, you saved Rs. 5,000 for your early retirement plans. But, when you started earning Rs. 80,000, will you still save the same? No, right!

Thus, with a rise in your salary, increase your savings as well.

4. Make Sure You Get A Proper Health Insurance

Whether you go for early retirement or not, health insurance is mandatory. Nobody knows what’s going on inside our body or what will happen after 5 mins. So, it’s better to get a protective shield that would restrict you to lay upon your future savings for medical treatment purposes.

5. Let SIP Take The Remote Control Of Your Monthly Investment Towards Your Goal

SIP ensures you don’t miss out a month to devote your savings to your future goals. However, it is not feasible if you’re devoting a lump sum. Since a lump sum requires constant attention. Moreover, unless you’re a wealthy being, it would certainly affect you.

However, in case of small amounts, you can let SIP work on it diligently. For example, if you’re investing from a very small age, the amount might be less. But, consider it, on compounding with good interest, it can be huge in the future.

6. Early Retirement Also Means Early Gripping Of Assets

Early retirement means a narrower career period and a broader retirement period. That is, when you’re saying you’re going to retire early, you mean you’re retiring at 45-50 years of age. Thus, if we consider you started your job at 25, you earned for 20 years. From the age of 45, until assuming an average life span of 70 years, you’ve 25 years to spend. Thus, in this regard, you got less time to save, earn and build a piggy bank. Whereas on the other hand, you’ve about 25 years or more to spend on the things related to you or your family.

Thus, it’s a simple mathematical calculation that you can use to know if you need to use active savings strategies to grow up a passive retirement fund for early retirement.

Hence, related to it are a few principles that you must go through to understand better-

i. Too economical, or rather a miser

This may hurt the sentiments of a few but trust me it’s not a healthy habit. I’ve come across a few people who’re known to keep aside about 80% of their income to meet future demands. On the other hand, they feed their family just rice and potatoes. They don’t focus on a line beyond necessity ever. Thus, in short, they don’t live their life for the sake of their future.

ii. Energetic and bold investment

Saving in a savings account can add interest to it. There are even banks that provide a lot of interests with security.

iii. Getter a better grip on expansion

For example, you retired at the age of 45. You got your lump-sum retirement fund. Apart from that, there are other investments like the endowment policy maturing, mutual funds, other investments, etc.

Thus, when you get such a lump sum at a time, you can divert this amount in some other expansions. You can invest in stock markets or the agriculture sector or some other businesses.

The amount left with you must be divided into two. One, you indulge with your passion building and the other as your future requirements. Yes, certainly you must keep something as your back-up right. You never know if your fate doesn’t fit by your side.

How To Retire Early?

It may sound weird but almost 99% of the people work for money. There are only one in a million who choose to pursue their dreams from the ground root level itself. From others, only a few but determined choose to retire early and work for their passion. However, it requires sheer stringent strategies with proper implementation.

Some may become a writer, some may be an artist, motivational speaker or even a software developer. Even if you have enough savings, earning about Rs. 15,000-20,000 a month can provide necessities. Apart from that, various other ways provide methods to earn even if your passion doesn’t provide bucks. You can teach students in your free time, work in a parlour, etc.

Passive Earning Schemes

Examples

You may hear people saying: When I got into my professional career at the age of 25, I started enjoying my job in the initial phases. Every time I stepped inside my office, my seniors would load me with works. I had to work with literally food in my mouth. But, since I was earning Rs. 60,000 per month, I was enjoying it in the beginning. But, gradually I lost interest. Then I started to set up my plans for early retirement.

I started saving up some amount every month in the form of savings in the bank for the future. Apart from that, my wife runs a dance academy. So, this adds to our savings as well.

As per my future plannings, I had decided to retire at the age of 45. Then I planned to give a physics tutorial and side-by carry out some painting artwork. It was my childhood dream to become an artist. But, in our Indian society, until you become a renowned artist, your arts are not valued. Thus, the physics tutorial came as another job. My wife decided to continue her academy.

So, combined, we saved a total of about Rs. 35 lakh for our future use. Then I thought, if we sell our properties, we would have even more amount in our bank balance. Thus, I sold one of our property and the sum added up to a total of Rs. 65 lakh.

For a normal human, this amount is enough to meet the financial requirements for about 20 years. However, it may vary if you’re a resident of south Mumbai. You may not find this much amount enough. But, if you’re living in Odisha, then genuinely speaking, it is more than enough for you and your wife.

However, as mentioned, I was aspirant of doing various other activities as well. So, here is a table showing the combined earning of me and my wife in a year.

Thus, considering this table, the amount that we receive at the end of the year is enough. Apart from the previous savings we made, this earning is more than enough for an average middle-class family. However, this ratio can go up and down. Yet, you have to adjust your expenditure likewise.

Thus, making a rough table like this will help you solve your queries.

Advantages of Early Retirement

As I’ve already said no one loves a monotonous life. You can always cherish to get something more with less effort. Added to that, you must be loving that job too. Well, this is just an imagination and hardly comes to be true. Isn’t it?

You can certainly get it with hard work, smart strategies, and a pinch of good luck. Just like that, you can go for your passion, deviating from your regular job. Yet, for that, you must know every detail attached to it. So, let’s wave a look towards the advantages of early retirement.

1. You Are Your Boss-

When you’re working in your own company, will your employees regulate your timing? Will they scold you for coming late to the office? Certainly no right. Thus, you can regulate your gear and handle the wheels.

2. You Can Live Your Life-

You can do the thing you’ve always wanted to. Added to that, if it adds to your pocket, then it’s even better. For instance, let say you didn’t like your regular job and wanted to create software and sell. For that, you need ample of time. It was not possible with your side job. Thus, you thought of going for it after your retirement. Hence, if you’re earning from this business, it’s even good.

That is, you’re doing something of your choice and even getting paid for your will. It’s like getting paid for travelling or eating of your choice. That is even more awesome!

3. You Can Give More Time To Your Family-

As I’ve said, since you become your boss after choosing this stream, there’s no one to question you. You can come to your office whenever you want or stay back with your family to spend some quality time. For instance, you wanted to become an artist. Thus, if you chose to become an artist after your early retirement and didn’t want to work one day. You can skip the day or week or a month till you’re sure you’ve enough bucks to sustain yourself and your family.

4. You Can Live Up Your Childhood Dreams-

Ever got the thought in your childhood of becoming a chef after seeing a chef in a restaurant? Or put some other occupation in the place of a chef. I have seen people getting scolded from their parents when they say if becoming a dress designer. They get pushed into a college of their parents’ choice and thus, join in the rat race.

Thus, with the increasing age and family pressure, you get into the same monotonous life as your parents. Finally emerged an ATM that would work all day long and earn money. However, by getting into early retirement with smart tactics, you can live up your childhood dreams. You can work following your parents’ wish, save up for the future and also do what you’ve always wanted to.

5. You Can Earn Till Your Entire Life-Time-

When you have a business or a company of your own, you can even lend that to your heiresses. Thus, till the end of your life-term, you would get a line of income. Even after you, it can employ your children and other workers. Hence, it can even add to the employment strategy. However, it is a long-term idea and works only if your idea works successfully.

Disadvantages of Early Retirement

As we came across the benefits, options, and strategies of early retirement, we must also look at the other side. Some points pose themselves as the disadvantages of early retirement. Let’s go through them one by one.

1. Financial Challenge-

Well, this is the most crucial challenge that you can face if you don’t handle your strategies well. Retiring early can create a scenario of less working years and more spending. Well, here spending does not include the earnings that you can generate from your passion.

For example, you devote about 40% of your savings towards your passion. You won’t call it spending in this case. The income that you generate from your passion investment is your extra earning. This can add to your savings.

The financial challenge that I’m talking about comes from the losses incurred if any. Thus, to avoid that you must have a stiff strong savings beforehand.

2. Retirement Fund Withdrawal Taxes-

Everyone can say you to follow your passion, set your goals, and rush behind. No one shows the scenes behind. What I want to say is the early retirement age, which people normally accept in a range of age 40-50. But when it comes to withdrawal beforehand or retirement at 45-40, you’ve to endure some more.

Early retirement poses another threat of tax inclusions to your fund withdrawal. There’s no shortcut to avoid it. Yet, some companies that provide the opportunity of the early need may not include such taxes.

3. Reduced Benefits-

Several reduced benefits are included in the package of the early retirement.

When you get one benefit, there are scenarios that may drag you into losses. All you need to see if there is any way out to avoid this or it’s inevitable. Thus, reduced benefits refer to the less pension fund or other such retirement funds.

For instance, you’re retiring at the age of 45. By the Indian law of retirement, you’ve another 13 years to get a retirement age. So, for these 13 years, you could have gathered more in your EPF or other savings scheme. If you would have received a promotion before retirement, you would have received more amount as a pension.

When you’re in a regular 10-5 job, you get the assurance of a regular flow of money. That is, there is no tension of any loss or major downfall in it. But when you enter into a business of your own or be your boss, there are chances of loss.

As I’ve said in the last point, in your own business, there are chances it may collapse. Thus, in that case, if you don’t have proper savings planned, you’ll certainly end up in the thick soup.

4. Non-Monetary Barriers-

Well, this is the most crucial question that I’m going to ask you next. Answer them to yourself calmly.

Do you think you can feed your family and keep yourself sustained with your passion? Can you continue pursuing it for the next 10-15 years? Won’t you get bored of it? If you get bored of it, what is your next back-up? Do you have a proper financial back-up?

If you have crystal clear bold answers it these questions, then only proceed. Otherwise, it would be foolhardy to leave a good job and jump into the water without a life-saving jacket. Isn’t it?

Now, that we have known about the advantages, disadvantages. Let’s know how you can calculate your retirement strategies, savings virtually with a calculator.

5. Inflation-

Okay, lastly comes the most dangerous point that can hamper your progress. It can slowly eat up all your signs of progress. It may make you double or quadruple up your savings to meet. You might even need to modify and strengthen your portfolio.

Thus, the only way to meet this is to keep a stiff stake on your expenses. That is, you can make your expenditure as cheap as possible. You have to cut short any means of extra expenses. This may ruin the mood of your family members in the short run. Yet, they will certainly know its importance in the later stages while enjoying the fruits of your hard work and smart business.

Early Retirement Calculator

Like your percentage calculation during your childhood, there lies a calculator for everything. By this, you can calculate how much you can save on rough and get your future needs fulfilled. So, let’s calculate.

For instance, let’s assume you’re earning Rs. 60,000 per month. You started your job at the age of 25.

In this, let’s assume that your salary remained the same throughout your job period. Thus, your annual income is Rs. 7,20,000. From this, let’s say you devote about 50,000 towards your passion building after retirement. Thus, after 20 years, you’ve about Rs. 10 lakh. This is enough for starting your business or going for your dreams.

Keep in mind, apart from this 10 lakh, you must have other savings schemes. As I have mentioned above, there are schemes like MF, retirement fund, savings account in banks, etc.

Early Retirement Pension Charges

Early retirement is a self-choice. Yet, the charges implied on it varies according to the reason you pose. If you retire due to any medical disorder, the charges may vary from the cause of pursuing your dream. So, let’s know more about it.

State Pension

The state pension is something that is provided in a sort of pension fund. However, it’s delivered only after the appropriate age of retirement. Even if you retire before that age, you will receive it only after attaining that age.

Apart from that, the amount you receive will also be comparatively less than the normal. It’s because the state pension authorities take into account the total number of years you contributed towards your job.

The ‘qualifying year’ is the year(s) when you pay your taxes towards the NICs. Since you stopped devoting your contribution towards the NIC at an early age, you may receive a lesser amount. Yet, you can avoid it by keeping contributing towards it even after your early retirement. That is, even if you retire at an early age, you can devote some of your earning towards the NIC. By this, you may get a better amount than the actual amount after your early retirement.

For instance, let’s consider you served the company for 20 years. Thus, if you retire after that, you got 20 years as your qualifying years. However, if you still contributed to it from other sources of your income, it might increase. This will further leave you with more returns and fewer deductions.

How To Deal With Early Retirement When You Have Kids?

Everyone aspires to become a parent, at least once in their lifetime. However, when it comes to dealing with early retirement while having kids, it becomes an inch tough. More the number of years you devote towards your regular job, the more secure you can frame the pavement. Thus, you can easily cope up by working for about 25 years of your regular job.

Since, you never know how gifted your child is, so, it’s better to put a long jump than settling for a shorter one. Caring, feeding, and educating a child requires a lot of funds these days. Added to that, it’s even unhealthy to put a compromise on it. Thus, your child should be your priority. Trust me if you do so, the bucks will follow your lead.

There are cases when both parents are working and choose to focus on their careers. Indeed, you must never compromise on your career. But, when there is another responsibility on your head, it’s more beneficial in the long run to give some productive time. Thus, investing in a child is another big investment that can make your future even more beautiful. It may mold your child into a genius scholar which may stop you from searching for another job after your early retirement.

Thus, coming to the pinpoint solution, you ought to save about 55% of your total earning. However, this percentage may vary following your total earning. If your income is well-off, you can increase it. That is, you can cut off the extra expenditures and adjust here. However, if your salary is not too high, there is no chance to increase it.

Thus, when you’ve decided to go one with a child, you have to put extra effort as well.

Guidelines For Personal Pension

Early retirement includes a set of guidelines that you must take into account to regulate your pension schemes. Apart from that, there is also a provision of inclusion of the workplace retirement fund. Let’s have a glance at what it says-

i. As per the workplace pension, you’re not entitled to get your pension before the eligible retirement age.

ii. There are, however, special seats for the people retiring early due to the medical terms. For that, you need to provide the medical certificate as proof of your illness.

iii. If the pension amount you’re getting is non-superfluous, you can divert it and let it stay in your account. It gets added up with the future pension amounts and finally, you can get a lump-sum.

iv. In case, if you want to join another organization, you must shift your account to the same company. Since every organization has its own set of rules, you must abide by before rushing into things.

v. In case you have more than one employee, you will have to seek consultancy from the concerned officer about your pension funds.

vi. Since you served for a lesser period, the amount that got accumulated as your pension benefit is less. So, it is certain that you will have to get satisfied with a small pension amount.

Final Salary Plans

These are the plans that you contribute from your basic wage. There is a provision of your devotion and your employer as well towards your pension funds. It’s known as final salary plans.

For example, let’s say you started devoting a part of your salary towards your pension fund at the age of 25. Assuming the fund getting calculated on a scale of 1/80-

If you retire at the age of 45, you would receive about 45-25/80, i.e., 20/80 of the fund.

The compromise you make here can get adjusted with your later passion job and smart handling of your funds.

Frequently Asked Questions

1. How much pension do you lose if you retire early?

As I’ve already said, the retirement when you wish to receive is entirely your decision. Yet, based upon that, the amount you receive as your retirement fund or state pension gets decided. The retirement age is 58 years. Thus, if before that you wish to receive retirement, you shall lose some of the funds.

However, if you wish to retire early due to medical issues, then there won’t be any tax impositions. However, if you’re doing it to pursue your dreams, you have to keep some fund aside for taxes.

Apart from that, if your better half is a civil worker, you will have to receive only half of the total retirement fund. The rest half gets devoted towards your pension charges.

2. Can you retire early and still work?

When it comes to your will, retirement is in your hand. Yet, some organizations that encourage early retirement, do it to indulge younger people with less salary.

If you want to pursue your passion after retirement, it is your decision and the company has nothing to do with it. You will just get your retirement funds and a farewell from the company. That’s it!

3. How can I retire early with no money?

It is one of the serious issues faced by the people in the U.S. The people there have either very less or no amount saved to meet their future financial expenses. Some have less than Rs. 1 lakh in Indian currency for their future. Thus, they shall have to carry on by dealing with various factors like- i. Financing their outstanding debts ii. Maintaining their regular expenses iii. Working on odd jobs However, this is normally not a problem in the case of Indians. Be it government or private sector, there’s a provision of keeping a part of their wage for their future dealings.

4. What is the earliest you can take retirement?

There is no such certain age at which you can opt to take your retirement. You can take your retirement after 5 years to 35 years. Yet, if you’re considering the ideal age of getting a job is 25 years, then for early retirement with proper strategies, the age should be 40-45.

It’s because for carrying your passion or dream job, you must be physically and mentally active enough as well. Once your heart crosses the brink of old age, you would lose the power of continuity of your passion. Thus, it must not be too early or too late.

5. Can you retire with no savings?

Can you travel to a new city with very less or no money? No, right! Likewise, you can’t even think of retiring out of nowhere and no plans. Retiring early from a regular job requires a lot of plan and courage. You must be head-strong about your decision and passion.

Apart from everything, you must be sound enough with money to meet the necessities of you and your family. Thus, savings is utmost necessary for early retirement as well as late.

6. Can you retire after 30 years of work?

Yes, if you’ve followed the strategies and penned down the steps that you’re going to follow next then why not. However, you must be active and energetic enough from your heart to carry out the procedures. It’s because if you started your job at the age of 25, then after 30 years of work you would turn 55.

Thus, people at this age lose the hope of starting their start-up and carrying out the processes. Yet, you must not lose hope and determination from yourself.

7. What lifestyle I must pursue to speed-up my savings process for early retirement?

Like the show on the television, you can’t win a lottery with your first sale and become the billionaire the next day. Not everyone can practice these terms. Yet, you need to adapt to an economical lifestyle. Well, if you think you can save by travelling, partying every alternative day then you’re wrong.

Yet, you can’t opt for saving by feeding yourself and your family or bread butter and rice, potato always. What I mean is, you must make a standardise lifestyle. That is, you can make a schedule of going out with your family once a month. Buying ‘ not so expensive’ but smart clothes. These are a few of the alternatives that you must adapt yourself with.

The harder you work, the more you earn, the smarter you invest, the mother you save, you’ll get the better in returns.

8. Is early retirement really difficult?

Fighting with early retirement is just a psychological disorder that goes on in the mind. As I’ve already mentioned above, if you are not ready to fight with your mind, don’t go for it. It’s mentally tough to leave your regular job and work on your passion.

Apart from that, ask yourself if you are mentally ready to go for your passion for about 10-15 years. Leaving your regular job for taking up a self-created business requires strong determination.

9. How to know if I am ready for early retirement or not?

Well, if you cannot read your mind then the only way left is testing your choice.

Test yourself if you’re financially stable enough to carry out the future expenses. For that, you need to make a rough calculation on your savings and expenditure. You can put a line on the range of your expenses. You can cut short your travelling expenses or shopping, etc.

Added to that, you can make a monthly list of the total expenses that get carried out in your family. Look at it closely and see if you can cut short anything extra. Carry out these processes for 2 months and if you can manage, then financially you’re stable to go for it.

10. Is it worth taking the risk?

Just one question and you can hear your inner self. Do you want to pursue your dream or give up in this rat race?

If you’re confident about pursuing and ready for a stiff hard-work in the beginning years, go for it. But, trust me, once a pavement gets settled, the pleasure you get is immense. So, I would suggest, if you have a proper financial back-up then, yes, it’s worth taking a risk.

Bottom Line:

Everyone wants to run away from this monotonous rat race and live a life of their own. For this, they need to follow the prescribed rules and strategies and work out on them. Thus, by this article, I hope, I was able to clear all the doubts on early retirement: how to retire early from the job. Peace!

Via http://invested.in/how-to-retire-early-from-job/

source https://investedin.weebly.com/blog/early-retirement-how-to-retire-early-from-job-indepth-guide

0 notes

jayantharde · 4 years

Text

Invest Online in SIP Mutual Funds Plans in India 2020

A systematic investment plan (SIP) is an investment option provided to investors by many mutual funds, enabling them to invest small amounts on a regular basis, rather than lump sums. Investment level typically occurs regularly, monthly, or quarterly. Through SIPs, investors regularly debit a fixed sum of money through bank accounts and invest in a specified mutual fund. A number of units are assigned to the investor according to the present Net Asset value. Every time an amount is spent, the investors account earns more units. The strategy promises to free the investors by dollar-cost average from speculating on volatile markets. Since the buyer gets more units when the price is low, and fewer units when the price is high, the average cost per unit will be lower in the long run.

SIP appears to be encouraging responsible investment. SIPs are flexible; investors can stop investing in a plan at any time, or choose to increase or decrease the amount of investment. Retail investors who do not have the money to follow the successful investment are typically advised to SIP.

A mutual fund is a professionally run, open-end investment fund[1] that pools money from several investors to buy securities. Those investors may be institutional or retail in nature. The concept is usually used in the United States, whereas the SICAV in Europe (‘investment company with variable capital’) and the open-ended investment company (OEIC) are used in similar systems around the world.

Compared to direct investment in individual shares, mutual funds have advantages and disadvantages. The mutual funds’ benefits include economies of scale, diversification, liquidity and skilled management. Such, however, come with fees and expenses for the mutual funds. Mutual funds are often known as money market funds, debt or fixed-income funds, mutual or equity funds, hybrid funds or something similar by their core investments. Funds can also be known as index funds, which are passively managed funds matching an index’s results, or are actively managed.

To know more about Mutual Fund, you can visit our website

https://www.jayantharde.com

or contact our representative at

+91 712 2282029

or meet us at 51, Gurukripa, Old Sneha Nagar, Wardha Road, Nagpur – 440015.

Why Invest in SIP?

There are many reasons as to why investors prefer investing in mutual funds through SIP, the benefits of SIP are listed below:

Rupee Cost Averaging:

SIP investments promote phenomenon called Rupee Cost Averaging. Let’s see first, to understand it, how mutual funds are purchased and kept as investments with an example: in October 2018, Mr. Anand has ₹60,000 on hand to invest into a mutual fund scheme. He has two options: lump sum or SIP. >> Lump sum: In October he wants to spend it all in one go. He goes online, signs up with an online investment platform for the mutual fund and buys ‘Units’ of a fund in return for his money. Such units of ‘mutual funds’ reflect his ownership of the fund. Let’s say that the NAV was ‘200’ in October, and Mr. Anand got 300 units for his investment of some 60,000 lump sums. >> SIP: In the same case where the NAV is ‘200’ in October. Mr. Anand bought 100 units for around 20,000 units. The NAV rose to ‘250’ in November and only 80 units were fetched by Mr. Anand’s next investment of some 20,000-for the same amount. The NAV fell to ‘100’ in December, and he gets 200 units from his ~20,000. So through SIPs, Mr. Anand’s ₹60,000 has bought him a total of 380 units only because of the fluctuating market.

Minimizes risk:

Investing small sums on a monthly basis instead of one big amount at a time means the investments can be stopped at any time the investor wishes. The investor may simply avoid investing in the rare and unfortunate case that a high-performing fund has a change of fund manager, or a risky investment doesn’t pan out well, or that the fund produces below-average returns over an extended period of time. The SIP can be stopped easily and the investment can be made into another well-performing fund to recover any negative returns.

Compounding:

Back to the investment itself, earnings in a mutual fund scheme invested by SIP are added, thus increasing its value. Since subsequent investments are made over the course of the investment period, the overall value will continue to rise by adding earnings to itself to allow greater growth.

Budgeting:

It can not be understated how critical proper periodic financial planning is. Many would-be investors earn more than necessary to invest and multiply their money but don’t save enough to invest because of insufficient financial planning. Strict monthly budgeting will allow huge amounts to be obtained with very little investment. Systematic investment strategies with standing guidance in one’s bank account will take to a whole new level the old maxim ‘a penny saved is a penny won’.

Financial discipline:

An individual can create financial discipline by ensuring that an investment has to be made every month. It is nothing but being careful and attentive when it comes to dealing with one’s wealth-a quality that is largely absent in modern India. Usually, a typical salaried corporate employee between the ages of 25-30 learns way too late that he/she spends too much on non-vital and essentially needless stuff daily. When this understanding arises, saving and spending on only the basics are given more priority. With a Drink, optimistic spending is classified as a month-to-month recurring investment. Through allocating funds separately for this, the remaining revenue is split in a calculated and controlled manner among essential expenses.

Convenience:

Investors have no need to go out of their way to invest in SIPs. Every month, the amount is automatically deducted from the bank account of the investor at a given date. In an efficient and detailed dashboard like the one in the FundsIndia mobile app, everything can be tracked online, the status of the investment, its returns being generated etc. Investors may also simply sign and send post-dated checks to ensure that investments are made at the appropriate investment pace. To know more about SIP, you can visit our website https://www.jayantharde.com or contact our representative at +91 712 2282029 or meet us at 51, Gurukripa, Old Sneha Nagar, Wardha Road, Nagpur – 440015.

Best SIP Plans to Invest

SBI BlueChip Fund Growth

Franklin India Equity Fund Growth

Mirae Asset India Equity Fund Growth

HDFC Mid-Cap Opportunities Fund Growth

ICICI Pru Bluechip Fund Growth

Source: https://hardejayant.blogspot.com/2020/04/invest-online-in-sip-mutual-funds-plans.html

#life insurance #mutual funds #sip investment #sip investment tips #balanced mutual funds #Smallcap Funds

0 notes

edbutowskymoney · 4 years

Text

Mutual Fund Services

The bank has tied up with the following mutual fund asset management company (AMC) to act as a financial supermarket:

Birla Sun Life Asset Management Company Ltd.

DSP BlackRock Investment Managers Pvt. Ltd.

Franklin Templation Management Pvt. Ltd.

HDFC Asset Management Company Ltd.

ICICI Prudential Asset Management Company Ltd.

IDBI Asset Management Company Ltd.

Reliance Capital Asset Management Ltd.

SBI Fund Management Private Limited

UTI Asset Management Company Pvt. Ltd.

Features and benefits

Mutual fund services is a trust that collects the savings of investors with similar financial goals. Savings made in this way are invested in various instruments of marketing such as shares, debentures and other securities. The income earned from these investments and the appreciation from capital are shared with their unit holders in proportion to the number of units they own. Thus a mutual fund is the most reasonable investment for the common man as it provides an opportunity to make diversified, commercially managed investments of securities at a relatively low cost.

Benefit

Portfolio diversification is an idiom, 'don't risk everything', diversifying the number of instruments or instruments helps reduce the risk of single holding.

Business investment management Asset management companies (AMCs) are managed by professional fund managers who execute specific investment activities.

Liquidity Open-ended schemes provide liquidity through repurchase facilities and ongoing sales. Thus, the investor is not required to find a buyer for his investments.

Lower transaction costs Given its size, we know that, we can get better rates than retail rates. Thus, AMC leverages more bargaining power and is in a better position to bargain buying and selling of its investments.

Wide variety of investment products Since the goal of investment is different, the philosophical element of 'one size is right for everyone' is not right here. Hence, investors can choose their investments from a bunch of mutual fund schemes i.e. equity, loan, money market, ELSS etc., depending on the investment target and time frame.

Flexibility Mutual Funds provide flexibility for the investor to choose a scheme for the purpose of investment.

Information available through transparency fact sheets, proposal documents, annual reports and publicity material helps the investor to provide information about his investment.

Proper Control Mutual Funds are controlled in India, through SEBI monitoring of the activities of mutual funds.

Profit tax for equity funds, plans equity exposure of dividends received (ie more than 65% of equity mutual funds) are exempt from the full tax. Neither the mutual fund has to pay dividend distribution charges nor the investor has to pay income tax.

Types of mutual funds

By structure

Continuous / Unlimited Term - These plans do not have fixed maturity. Mutual funds ensure that liquidity is maintained by selling and announcing repurchases for units of limited term funds.

Limited Term - These plans have a fixed maturity. Investor's money is blocked for a period. Sometimes, the investor has the option of repurchasing term plans, either for a particular period or for a particular period. These schemes are provided through liquidity, listing on the stock market.

Investment target

Equity schemes- Equity schemes mainly invest in shares. These are based on the target, investment can be made in growth stocks where there is a high probability of earnings growth or in value stocks where the fund manager is of the view that the current valuation of the market does not reflect intrinsic values. Following are the different types of equity shares:

Diversified funds: These funds provide you with the benefit of diversification of investment in companies spread across sectors and market capitalization. This is mostly for those who seek risk in the market and do not want to be limited to any one area.

Sector / sector funds These funds mainly invest in equity shares of a specific business sector or industry in companies. These funds, while offering higher returns, are more risky than diversified funds. Investors should keep an eye on the performance of these sectors / industries and get out of it at the right time.

Index funds These funds invest in the same pattern as popular stock market indices like the CNX Nifty index and the S&P BSE SENSEX. The value of an index fund varies / varies in proportion to the benchmark. The NAV fluctuations of such schemes are in accordance with the index fluctuations. This will change in comparison to the causal benchmark of an element such as 'tracking error'.

ELSS (Equity Linked Savings Scheme) Equity linked savings scheme is an open-ended equity development scheme offered by mutual funds along with the current ELSS guidelines. Thus the investments granted under the scheme have a lock-in period of 3 years and as per the Finance Act 2005 the benefit of deduction of income up to `1,00,000 / - is allowed. ELSS provides tax savings and capital gains. You can now invest the full amount of `1,00,000 / - under Section 80C in ELSS.

Benefits of ELSS

Invest: in equity and equity related security. Section 80C: Tax Profit on Investments up to `1.00.000 / - Lock-in period: 3 years (minimum of all salvaged instruments) Return: High potential dividend: Tax-free tax liability: Since redemption or redemption occurs after 3 years . SIP: To invest in small amounts through SIP

Debt or income schemes invest such funds in interest-paying securities, mainly government securities and corporate bonds. The fund earns returns for its investors from interest income on its investments and gains on business securities. As far as risk is concerned, the risk in such funds is low.

Money Market Schemes These schemes invest in short-term debt instruments issued by the government, corporate or banks. These are particularly investments in short-term papers such as CP and CD.

Hybrid schemes

Balanced Schemes Balanced plans are a mixed investment of equity and debt. Debt investment ensures basic interest income, which the fund manager wants to relate to the capital gains derived from investments in equity. Although the loss can be compensated in basic interest income and capital.

Monthly Income Plan MIP is suitable for traditional investors who do not have low risk of equity flow with debt risk. These funds invest a large portion of their portfolio in debt market instruments and a small portion for equity to provide consistency in returns. Thus MIP is suitable for traditional investors who monitor capital overvaluation as well as capital security as MIPs have a risk in equity. However, monthly income is not guaranteed.

Systematic planning

Planned Investment Plan (SIP) SIP is a convenient way to deposit money in a disciplined manner for a long term. It helps to invest a fixed amount regularly in less installments and thus to build more money over a longer time period.

Planned Withdrawal Scheme (SWP) In this scheme, the investor withdraws regular funds over a period of time. SWP is a mirror reflection of SIP. Just as investors do not want to buy all their units when the market is at its peak, they also do not want to redeem their units at the time of market trough. That is why investors can opt for a safe route to repurchase at the time of stability of the market price of the units.

Planned Transfer Scheme (STP) It is a combination of SWP and SIP. This is SWP from the current scheme of the same mutual fund and SIP (sweep in) in another scheme.

Benefit from SIP

Benefits from SIP SIP helps in investing itself at an early age to meet or fulfill the maximum expenditure of its life. By saving small amount regularly, the best power of money cycle validity has more effect on wealth accumulation.

Rupee cost averaging reduces the impact of investment in a SIP volatile market. This helps you earn better returns in the long run at your average cost. Since, when the NAV falls, more and less units are received, it averages the cost over time. Thus, the average cost of your investment decreases.

Convenience and regularity SIP allows you to pay through Syndicate Bank's electronic clearance service or auto debit or standing order. You can choose Yakam and Mutual Fund Scheme. A certain amount will be automatically debited from your account on the date you specify

Disciplined approach to investment Since you invest regularly, you become disciplined in terms of your savings. Disciplined investing is critical to earning good returns over a long timeframe.

Mutual fund terminology

Asset Management Company (AMC) means a mutual fund company.

Authorized Registrar - Any registrar or share transfer agent with whom AMC is proposed to be arranged for execution / confirmation of transaction orders placed through the branch network.

Proposal Documents / Scheme Information Documents - Documents issued by AMC, as amended from time to time (including addendum or otherwise), additional information of hypothetical and returns submitted to the units of the respective schemes / schemes for membership, which shall Available on the website and includes AMC.

Key Information Memorandum or Kim: Brief revision of the plan information document of the schemes of the fund, including the application form and key information of the plan (s).

NAV - The relevant plans per unit of gross asset radish and the plans and options contained therein or proposal or proposal document / plan information document as published and calculated, or as determined by regulation from time to time.

Purchased: Customers can subscribe for units of any scheme of the fund through distributor.

Redemption / redeemable - Redemption of any scheme of the fund unit by the customer.

Switch - The customer is given the facility to switch from AMC of a currently invested scheme to another ie the mutual fund (including the scheme / option contained therein) of the mutual fund of a scheme's unit (the scheme / scheme contained therein) Option also includes) Redemption from sale of unit of any other scheme, subject to period of restriction, if any.

Unit - The proof of unit certificate / account statement by the investor is the representation per unit vested in a scheme in an interest in an undivided share in the assets of that scheme.

Dividend Options - The options available to the customer will be to choose from the dividend payment or dividend reinvestment facility available in the AMC plans, as defined in their respective offer documents, from the offer document / plan information document and addendum.

Dividend Payment - The option selected by the customer for dividend, payment subject to deduction at source, if any, to be made according to the respective proposal document / plan information document and Addendum.

Dividend Reinvestment - The option selected by the customer to reinvest the dividend, subject to deduction at source, if any, to be made in the respective proposal document / plan information document and Addendum.

Record the date - the date on which beneficial ownership of the unit holders in the fund is recorded by the AMC in the register of NIT holders.

Disclaimer

Mutual fund investment is subject to market risk. Please read the proposal document / plan information document carefully before forcing.

Use the HTML Cheat Sheet for color picker, search for special HTML characters, get examples of the most common tags and generate any tags.

0 notes

mysiponline-blog · 6 years

Text

How to Invest in SBI Mutual Funds?

Investing is the key to opening the lock of financial security in the current time. Wise decisions at the right time can help you in fulfilling the monetary needs that might arise with time or in reaching your goals. Everyone tries to earn maximum on the money invested. Although aligning your money in the stock market can help you do the same, the risk involved is very high. This is where mutual funds step in, here the investment is done in a diversified manner, and therefore involves lower risk. In today’s time, there are many fund houses which have launched a number of schemes to invest in. SBI Mutual Fund is one among them that is helping people continuously in reaching their goals. In this article, you will be reading about how to invest in these funds but before that let’s get a glimpse of the fund house.

What Is SBI Mutual Fund?

SBI MF is a fund house which is managed by SBI Funds Management Pvt. Ltd. This AMC is a joint venture between State Bank of India and AMUNDI which is one of the world’s top companies which manages funds. It has over 222 points of acceptance across the country. Its vision is to become the largest fund house in terms of funds that it launches and by providing the best services from time to time. It is currently managing the investment mandates of more than 5.4 million investors. There are many investment products that have been brought for investors by this fund house to satisfy their unique investment needs.

Best Way to Invest in SBI MFs

You may invest in SBI MF online as well as through offline mode. To invest online, you may invest via MySIPonline, an investment portal that provides a number of benefits as follows:

Simplified Procedure: The investment procedure is really simple and convenient. You can invest in the best plans from the comfort of your place.

Handy Calculators: There are a number of calculators named SIP, Reverse SIP, Lumpsum, Retirement, Child Future, and Tax calculator. These tools help in making calculations related to various types of investment.

Single Account for Family: You may add your family members in the account that you already have. Thus, making it easy to check the investments at a single place.

Secure Payment: The payment made during investment is directly received by the fund house and is absolutely safe for the investors.

Free Financial Guidance: Whenever you need financial help from the experts while making an investment decision, you may consult the same here anytime, that too without incurring any additional expense.

Unbiased Advice: The recommendations provided by experts are absolutely unbiased and solely for the benefit of the investors.

You may invest in SBI Mutual Fund Schemes through MySIPonline portal to earn the time value of your money. These funds are for the investors’ betterment and have won the trust of many individuals. So, what are you waiting for? Avail the experience of becoming an SBI MF investor now. In case you have any question related to investment, you can post the same at https://goo.gl/WofRJm .

#sbi mutual fund sbi sip sbi mutual fund nav sbi mutual fund online sbi mutual fund schemes sbi mutual fund sip sbi sip plans sbimf online

0 notes

personalfn-blog · 6 years

Text

SWP Can Help You Send Money To Your Family Members

Nobody likes to be dependent. Financial dependency is even worse!

In life, however, there are times your family members require your financial assistance to address their contingencies. In such a case, giving money in lump-sum isn’t the most helpful approach. Your loved ones might need your help for an extended period of time.

Under such circumstances, you can think of dedicating an SWP (Systematic Withdrawal Plan) to a family member in need. Mutual fund houses have started offering you unique options to transfer money to your family members.

SWP facilitates you to withdraw a fixed sum of money from a mutual fund scheme regularly (say monthly, quarterly, half-yearly and annually) and hold the potential to clock returns on the remaining investments over a period of time.

Both SIP and SWP have one thing in common: they instil a disciplined approach. Both of them help you tide over uncertain market conditions.

SIP allows you to accumulate more units through Rupee-cost averaging. While SWP lets you redeem lesser units to withdraw the same amount at a set frequency. In both cases, you try to make the best use of market volatility.

Recently, the SBI Mutual Fund launched Bandhan SWP—a unique facility that allows you to systematically withdraw money from your investments with the fund house and transfer it directly to the account of a beneficiary.

How SBI Mutual Fund describes Bandhan SWP?"Bandhan SWP defines the relationship between a 'Responsible Giver' (Investor) and a 'Confident Receiver' (Beneficiary). It facilitates a regular payout which the beneficiary can use for monthly sustenance, additional financial support, lifestyle maintenance or recurring expenses."

Briefing the media about this new initiative, Ms Anuradha Rao, MD and CEO of SBI Mutual Fund said, "We believe that using one's own investment corpus to create a tax efficient and regular payout to immediate family members not only provides the financial support to your loved ones, but also makes them confident and financially secure."

"Our endeavour is to bring a behavioral change amongst investors to move from a short-term approach to a wealth creation mindset with a long term orientation, and Bandhan SWP is a step in that direction”, added, Mr Navneet Munot, ED and CIO of SBI Mutual Fund.

More about Bandhan SWP...Who can be the beneficiary of the Bandhan SWP?Your parents, spouse, children, and siblings above 15 years, provided they are Indian residents.Formalities you need to complete…The beneficiary has to be Know Your Customer (KYC) compliant. Else, the recipient will have to present the verifiable proofs of his/her identity and address.

The recipient will also have to provide proof of identity, wherein the name of the specified beneficiary family member is mentioned—the marriage certificate or birth certificate or Passport to name a few.

If you opt for Bandhan SWP, you will have to get the written consent of the beneficiary, and the beneficiary will have to submit the cancelled cheque or the copy of bank statement.

How long will you have to continue with the plan?Once started, you will have to continue with Bandhan SWP for atleast 12 months, and the minimum monthly pay-out should be Rs 5,000. Should you opt for Bandhan SWP and similar options that other mutual funds might offer in future? While the concept of SWP is sound, you can live even without Bandhan and similar SWP options.

Moreover, you should always be mindful of the income tax provisions dealing with the clubbing of income. When you opt for a routine SWP or Bandhan, your potential

mutual funds returns

won’t be impacted.

This makes Bandhan (and all similar SWPs that potentially might come up) nothing more than a marketing gimmick that tries to emotionally appeal to its investors.

Editor's note:

To fulfil your financial goals, you first need to create a meticulous plan. Sure, it might sound like a daunting task for many of you. So, if you do need a helping hand in planning your finances, you could look up a Certified Financial Guardian (CFG) in your vicinity.

Try our SIP Calculator to find future value of your SIP contributions.

This post on " SWP Can Help You Send Money To Your Family Members " appeared first on "PersonalFN"

#SWP #Money #MutualFund #mutualfundsreturns #financialgoals

0 notes

amanjaiswal08-blog · 6 years

Text

What Is A SIP?

What is a SIP?

“Little drops of water make the mighty ocean”

An SIP enables you to invest in mutual funds in a systematic, automated fashion. If you’re new to investing, it’s a good idea to stick to a monthly SIP since you probably get your salary paid on a monthly basis.

For some investors who are afraid of long term commitments like PPF or Insurance plan, SIPs are the answer. They are flexible:

SIPs are done in open-ended funds where the investors can invest and take out the money anytime.

There is no fixed tenor for running SIP. Once the SIP tenor is fixed, it can stopped in between or could be continued even after the tenor by placing the request with respective mutual fund company.

Full and partial withdrawal is possible during or after the SIP tenor. The SIP amount can be increased or decreased.

The SIP amount can be increased or decreased.

Through a simple Google search, you can easily pull up all mutual funds in India and their historical returns. Ensure that the mutual fund(s) you select meet the following criteria:

The mutual fund has been in duration for at least 5 years (the longer, the better).

The “Fund Family”, or Fund House, is well reputed. In general, if you can recognize the Fund Family (such as HDFC, Reliance, SBI, Birla Sun Life), you are probably good to go.

Ideally, the SIP is in conjunction with the bank you’re already banking with. Contact your relationship manager at your bank. He/she can get you set up.

Is SIP safe or not?

SIP is a very safe method to invest in mutual funds. If you invest in a mutual fund lump sum, depending on the market condition, you could end up paying a very high price for a mutual fund. To avoid this, you should invest in mutual funds when the markets are not overvalued. This obviously requires a good knowledge of the markets. This is called timing the market.

Can SIP be stopped?

Yes. Unlike fixed deposits (FD) and recurring deposits (RD), you can stop an SIP any time you want. After stopping paying for an SIP plan, you can either choose to redeem your money from the mutual fund or continue to remain invested in the fund.

If you use SIP to invest in tax saving ELSS mutual funds, you can save tax too. You can claim tax deductions of up to ₹1.5 lakhunder Section 80C by investing in ELSS mutual funds.

Can SIP amount be reduced/increased?

The procedure to do so is very complicated. But there is a solution to this problem. You can simply start a new SIP in the same fund with the increased amount.

Can SIP be started online?

Yes, you can easily start an SIP online. To start an SIP online using Wealth Bhai, make sure you have signed up on wealthbhai.com . Upload necessary documents (PAN, address proof, and bank statement) and then choose a mutual fund you want to start an SIP in. Go to the mutual fund page on wealthbhai.com and follow instructions.

Does SIP have a lock in period?

If you are investing in an open-ended mutual fund, there will be no lock-in period for your SIP as well. It completely depends on the mutual fund you invest in. Some mutual funds, do have a lock-in period. ELSS mutual funds have a lock-in period of 3 years. Many other mutual funds have lock-in periods too. Mutual funds that have lock-in periods are called close-endedmutual funds.

Can SIP save tax?

If you use SIP to invest in tax saving ELSS mutual funds, you can save tax too. You can claim tax deductions of up to ₹1.5 lakhunder Section 80C by investing in ELSS mutual funds.

Does SIP have exit load?

The exit load of an SIP depends entirely on the mutual fund. If the mutual fund specifies an exit load for a period, then there will be an exit load on the SIP also. Most equity funds have an exit load of 1% if redeemed before a year from investment and no exit load if redeemed after a year. The exit load is calculated upon the value being redeemed.

Is SIP better than RD?

SIP has the capability to give much higher returns than RD. The return you get on your SIP depends on the mutual fund you invest in. There are debt mutual funds that are considered low risk and then there are equity mutual funds that are considered high risk. Unlike RD, the rate of return isn’t fixed in case of mutual funds.

Is SIP good for long term?

Yes. In fact, it is better to invest in SIP for the long term. Instead of waiting and accumulating money to invest, you start investing whatever amount you are able to save. This way, your money is always invested.

Is SIP and mutual fund the same thing?

SIP is a method used to invest in mutual funds. You can invest in mutual funds in two ways: lump sum and SIP. When you invest lump sum, you put in a large amount of money in a mutual fund in one go. In SIP, you invest smaller amounts of money on a regular basis – usually every month.

Which SIP to invest?

Which SIP you invest in depends on your needs. If you are willing to take risks, you can check out small and mid cap mutual funds. On the other hand, if you want moderate risk, you can check out large cap mutual funds. You can also check out debt mutual funds if you want to be exposed to very low risk.

Learn all you need to know about SIPs here.

The Power of an SIP

Suppose you set aside 10% of your monthly salary towards an SIP, and your monthly salary is Rs. 60,000. A cursory glance at some of the largest mutual funds in the country shows that many have consistently outperformed the overall market over a large span of time. For example, one of the largest mutual funds is the SBI Blue Chip Growth Fund. It has over 1000 Cr. in assets and launched the fund in June of 2006.

What are the benefits of SIP?

Estimated returns from SIP into an Equity Mutual Fund (at an assumed rate of 12% p.a.)

The best time to invest is… regularly.

If you invest smaller amounts regularly over a period of time you will buy your investments at an average price. You get to take advantage of any market dips (and pay a lower price) and at the same time reduce your risk of buying just before a market fall.

If you wait to save up large lump sums to invest you potentially risk :

a) Missing out on compound return and, b) Being more impacted by short term market movements.

Ultimately, if you have a long-term investment mindset dollar cost averaging can reduce anxiety about losing money when you invest. The only downside is that if markets don’t dip, you’ll end up buying higher and higher but at least you’ll be making a profit on your earlier purchases.

Happy Investing!

Visit:www.wealthbhai.com

#mutualfunds #investment #SIP #GROWYOURMONEY

0 notes

creditrestart-blog1 · 8 years

Text

Here's a five-point guide for women to stay financially healthy

Home

money

investment

Here’s a five-point guide for women to stay financially healthy

The study says women have 3.7 percent less average debt than men and have an average credit score of 675 compared to men’s score of 670. But women need to be cautious while planning their finances to ensure they do not overinvest or avail too much credit, thus falling into a debt trap.

Women have made their mark everywhere and it is time they start managing their finances independently. According to an analysis by Experian, women make more on-time payments and they are less debt-laden than men.

Women are good planners. Therefore, with the right information, along with financial independence, they can be financially secure. Here are five essential steps to good financial health.

Establish financial goals

Understand the financial situation and then set goals to improve it. Determine what you want to do with your money and how that will affect your financial future. Lifestyle and life situations often influence one’s financial decisions.

“Key events like marriage, buying a home, a fall in income, health issues, divorce and so on can impact a woman’s credit profile and it is important to be aware of these crossroads to ensure optimum financial management,” said Mohan Jayaraman, managing director of Experian Credit Bureau, India. Youngsters today pursue higher studies, opt for professional courses and meet those expenses through education loans. “For women, more often than not, this becomes their first step towards availing credit and hence, it becomes imperative to manage it carefully” Jayaraman noted.

Know the basics; have a budget

With a budget in place, you know where your money is going and it will help you decide how you want to spend your money. A budget is your guide to good financial health. Even without a budget you can eventually reach your goals, but it will be a lot faster and more effective if you have a guide.

A lot of budgeting apps are out there to help you. So if you make a reasonable budget and follow it, you will never have to worry about not having enough money at the end of the month. Have order and clarity while dealing with your current investments; stay informed and know the basics before taking any decision and putting your money in the financial market.

Keep an emergency fund ready

Make sure that you have an adequate emergency fund before starting to save for other goals. Keeping enough money at home, in liquid funds or in short-term debt funds will ensure that your investments won’t dip during emergencies. Building an emergency fund will also keep you secure from unforeseen hardships. The money also prevents you from getting into deep credit card debts.

A proper mix of insurance and investment helps

Getting an appropriate insurance cover will prevent one from financial or other disasters. Even a generally healthy person can have an accident, may fall ill or become bankrupt. Go for an individual policy in addition to an employee-sponsored health insurance. A basic term plan with additional protection of critical illness and accident riders should be the top priority for any working woman.

“Women are known to put their families first. While planning their finances, they should first secure their health insurance needs in order to take care of themselves at all times,” said Reshma Goregaonkar, senior manager, SBI General Insurance.

As for investments, put money in a liquid fund after paying off your large monthly expenses, which will earn you better returns than lying idle in the bank. You can withdraw money from liquid funds whenever you want as they even provide debit cards, which can be operated through ATM’s.

“Every woman should invest for long-term and midterm financial goals. Women can choose both options to get assured returns and inflation-beating returns. They can open public provident fund (PPF) accounts and can invest in equity-linked saving schemes (ELSS) for tax saving,” said Shikha Bhatnagar, executive vice-president, private banking, Bajaj Capital.

For long-term financial goals, investing in mutual funds through systematic investment plans (SIPs) is a good option as it will usher in a disciplined approach. Putting your money to work through investing ensures higher returns than savings can do. Also, create and implement a plan for retirement goals. “Start a long-term SIP in diversified equity funds to generate inflation-beating returns and create a retirement corpus. As you near your retirement age, the assets should be switched to less volatile instruments like debt mutual funds,” added Bhatnagar.

Pay off debts; improve your credit profile

Get a credit report from an authorised credit bureau and understand your financial standing. A credit report is a compilation of your entire financial activities and is examined by potential lenders when one applies for a loan or a credit card. “Delay in clearing credit card outstanding dues and EMI payments for personal or home loans can have an adverse impact in one’s credit score. This should be avoided at all cost for a top notch credit score, which in turn will provide better access to financing options and even lower rates of interest, in times to come” says, V Viswanand, Senior Director & Chief Operations Officer, Max Life Insurance.

Recently the Reserve Bank of India has come up with a new rule to provide access to a free full credit report, including credit score, once a year for all individuals. “Accessing a credit report at regular intervals is crucial for a woman to understand how an institution would view her record,” Jayaraman of Experian Credit Bureau noted.

Financial planners play a major role in proper financial planning. A financial advisor uses his/her professional’s training, knowledge, expertise and resources to work for the client. With financial planners, one gets to understand short- and long-term goals, and can calculate those in financial terms.

“Through a financial advisor, one can get access to important investment news when it is most valuable. Financial advisors understand the needs of the investor and helps formulating long-term investment goals and objectives. The financial advisor also helps to develop realistic expectations by discussing the risks and rewards of each investment” adds, Viswanand of Max Life Insurance. You can plan your investments accordingly, which will help you reach your financial goals without any hassle.

Here’s a five-point guide for women to stay financially healthy Credit ReStart

#credit repair #debt-free #credit restart

0 notes