When people enter the job market, they usually have an aim to reach high savings in the first decade. While doing so isn’t impossible, it requires the investors to be highly disciplined about their expenditures. Say you want to save approximately 50 lakhs in the ten years of entering the job market. Just keeping track of your expenditures isn’t enough. You also need to look at other avenues such as investment options. One of the options is the SIP (systematic investment plan), which is an investment option offered by mutual funds. Under the provisions of the SIP, an investor can choose to put their money in a mutual fund scheme regularly. Before choosing to invest in a systematic investment plan, one can use the SIP calculator. Apart from using the SIP calculator, one can also take steps like:
- Determining your goals and even the steps of investments:
Once you have decided to make investments, you just can’t opt for a plan. Firstly, you need to determine what your goals are. So, the aim, in this case, will be to save 50 lakhs in 10 years. After that, you need please determine the amount you can set aside for investments. Once you have determined the amount you can keep aside for investment options, you can proceed to opt for mutual funds investment plan. Unlike a few decades ago, this step is easy to complete nowadays thanks to the internet. To determine, what kind of plan to opt for, you can take an online quiz.
- Increase the monthly SIP using an annual step up:
The feature of step up is nothing but your choice to increase your investment. Consider this scenario, you have opted for a systematic investment plan through which ₹2,000 is debited from your account every month. You feel that ₹2,000 isn’t enough to reach your goals. So, to make it easier to reach your goals, you can opt to invest ₹3,000 or ₹4,000 per month.
- Goal-based investing:
It simply means, making investments with a specific goal in mind. So, if you are aiming to save ₹50 lakhs in ten years to pay for your child’s education. An investment plan you can choose is the SIP mutual fund which is one of the best examples of goal-based investing. Under this type of approach, the portfolio manager considers your requirements and after a careful study of the market invests the money. Goal-based investment has three types of investors, namely, aggressive, conservative, and moderate. Some of the advantages of goal-based investments. One of them being it encourages you to be committed to your goals, so much so that you need to participate personally participating in the process. The other one is, that it teaches you not to be impulsive in decision making based on the market movement.
- Use the SIP Calculator:
Thanks to the internet, determining how much of your earnings should be set aside for investment purposes is easy. Moreover, these types of calculators are very easy to find. All you need to do is do a simple Google search for a SIP calculator. Moreover, it is free to use, and you don’t need to pay anything for its usage. For example, you are aiming to save 50 lakhs in ten years. So firstly, you need to do a Google search for the SIP calculator. After finding it, click on the link. After opening the link, please proceed to add the details. So, in the goal section, please add 50 lakhs, 10 as the number of years, and 10% as the expected return. Once that’s done, you will get the final answer. In this case, the final answer will be ₹ 24,890.
Please remember that apart from the four above, you can do several other things to acquire 50 lakhs in 10 years through SIP. Here’s hoping you found this article an engaging read.