When we are young and single with no financial dependents or any other type of responsibilities, we have certain goals in life. These goals revolve around going on exotic vacations, owning a superfast car or bike, or the latest smartphone, etc. However, as we grow old and are exposed to certain responsibilities with growing family, these old goals are replaced. Now, an individual is more focused on providing to their family by ensuring that they own a house, educational expenses of children, healthcare for the entire family, marriage expenses, retirement kitty, etc. are tended to. When your financial objectives change with growing times, why should your SIP mutual funds remain the same? In this article we will explore why is it important to review your SIP investments from time to time.
If your dreams are big, so should be your SIP investment amount
Instead of owning a normal, comfortable house, car, and lifestyle, if you are inclined towards enjoying a lush, expensive lifestyle that includes a lavish house and a fancy car, you must be prepared to save and invest a significant amount towards mutual funds SIP. For instance, if you wish to buy a home that is likely to be valued at around Rs 5 crores in the next 10 years without taking a home loan, then you can consider investing in mutual funds via SIP mode of investment. Assuming an average rate of returns at 12% p.a. of the SIP mutual funds, using the SIP calculator, you’d calculate that you would need to invest around Rs 2.17 lacs per month – which, let’s face it is a gigantic amount of money.
Note that it might be beneficial for your mutual fund investments if you invest in SIP via equities, especially during a market dip or corrections in the market. This is because rise in the value of inflation-beating returns and market can help to accumulate a significant sum of money in the long run after taking calculated risks. However, when one invests in the stock market, the investments are subject to market volatility. As a result, it can be highly advantageous to invest in mutual funds through SIP mode of investment.
Saving is the backbone of financial planning and investing. Several people tend to save of which is left after their exorbitant lifestyle and expenses. In doing so, it’s not a shocker that they end up spending almost everything from time to time. If your dreams are your priority, ensuring that you make efforts in form of saving extra must be your priority too. For successful investing you must ensure that you follow the following investment mantra:
Total income – savings = Expenses
Lastly, basis of whether you have the skill, time, and resources to manage your mutual fund investments or not, you must decide whether you would require a finance advisor or not. Happy investing!
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.