SIP way to financial freedom

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Invest in mutual funds via SIP (Systematic Investment Plan) route. And it is best way of achieve financial freedom over period of time. SIPs provide better returns at lower risk than other investment options. You can check How compounding works in mutual fund. But see How to invest in SIP. Hence, see SIP interest rate.

Start an SIP in mutual fund

Systematic Investment Plans or SIPs has become popular in mutual fund. But everyone are still confuse about SIPs. Many of them do not know what an SIP is.  Many people do not know how to start an SIP. Thus SIP is simple tool that helps you to invest in mutual funds. You can start an SIP with frequency of your choice.

Big corpus will help you to remain financial independent. Here some basic steps that will help you to achieve financial independence in long term. If you want to start invest in mutual fund through Systematic investment plan (SIP). SIP is process where amount is deducted from your bank account in periodic intervals. And you can invest in selected mutual fund schemes. It also gives averages cost of units during market up and down.

Thus SIP allows you to invest certain amount of money at regular intervals. For instance, you can invest small amount in weekly, quarter or month. Instead of investing lump sum you can invest as per your need. But you need to understand SIP and its mix benefits by compare two examples of investments.

You can start saving and investing. And you can make large corpus over period of time. Thus you must to seek route for your investment that provide many and increase returns. This will help you many your corpus. Hence, see Benefits of SIP calculator 

Example 1

Raju at age of 42 years started saving Rs 6,500 a month in SIP and saved Rs 18 lakh by time you retired at 60. (Growth rate assumed was at 15%).  You accumulate total wealth of Rs 1.0 crore when you retired.

Example 2

On other hand, Anitha started SIP at age of 28 years started invest Rs 4500 month in SIP. You put similar amount of Rs 17 lakh by time you retired at 60 years. But same growth rate assume at 15%. You will collect total wealth of Rs 3.0 Crore at 60.

Thus, you can invest more each month. Because, Raj is able to make corpus of Rs 1.0 Crore as compare to Anita Rs 3.0 Crore. This is because raj did not gain much from power of compounding effect. But Anita enjoy as she started savings early. So, if one wants to get real benefit of compound then you need to go for long time for your investments.

Effect of Compounding

It helps in create good amount during period of time. You get multiply because you earn turn on interest plus principle every year. Thus start your investment earlier and stay for long run. Then your returns will high due to compounding effect. And check Rupee Cost Averaging 

If you save Rs 100 and you will get annual interest of 10%. So you will have Rs 110 at end of year. Due to compounding you will get 10 per cent interest on Rs.110 in next year. And you will get Rs 121 next year. Thus interest will calculate on Rs.121 at 10% next year and so on. But these savings will grow more.

Finally, see how to open sip account. But, check how to invest in SIP online. For more details see online sip calculator. But you can check Systematic investment plan comparison. Hence, you can check best sip plan to invest.

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