Know the advantages of starting your SIP early

Nobody can deny the importance of money in our life and the need to create wealth for a bright future. Most of us spend our time and energy, mainly to earn more but do not know the art of spending it wisely. We cannot create a bright and promising future without prudent saving and sensible investing. You can be financially secure and create a safety net during an emergency by saving your money, but thoughtful investing helps your money to grow and make you rich. But do you ever think the benefit of investing money since you start earning even from your twenties? You can gather more money over time if you start investing early. By the time you realize this fact, it might be too late. Even if you fail to understand the true value of money at your young age, don’t worry, start your investment today to achieve your financial goals. Mutual Fund SIP is the best way for your financial freedom, and the earlier you start investing, you can generate a large corpus over a period. Let us take a look at the benefit of starting SIP at an early age.

Importance of start investing at an early age

Most of us have multiple financial goals, and meeting them from our regular savings can be a challenge. Just saving a portion of your earnings may not be sufficient if you wish to generate a large investment corpus. Time is an important factor in mutual fund investing, and starting it early in your career helps you to generate wealth and make you rich. However, many youngsters do not realize the importance of early investing even if they need to know that. They do not need to work hard and invest more money if they start a SIP in their twenties. But if you start investing during your mid-age, you need to work hard and spend more to achieve the same financial goal. A secure old age is assured if you start investing in mutual fund SIP early. A person should be systematic and disciplined if he or she wants to be a successful investor to build wealth. The financial situation can be different from person to person due to various factors like income, expenses, and age, but start investing a small amount to take control of your financial future.

Mutual Fund SIP- an ideal wealth creation tool

The personal finance choices have changed drastically with the sudden change in the global economy. Many people have realized the importance of investing their money wisely, and they find the mutual fund SIP as the best wealth creation tool. You can be a disciplined investor by investing regularly through SIP. A great feature of this plan is that one can start investing as small as Rs.500 per month and can increase the monthly SIP as his income grows. Many youngsters find it a blessing, and they can enjoy a disciplined investing by opting for mutual fund SIP. A fixed amount gets deducted from your account every month if you start a SIP.

Advantages of starting your SIP early

One of the advantages to start early investing is that you have a longer time to invest before reaching the retirement age. It also helps you to accomplish your financial goals by investing smaller amounts. The benefits are magnified when a person invest for a long period of time regularly due to the compounding effect. Another great advantage of starting SIP at an early age is that it gets you into the practice of investing. Apart from that, this habit gets strong as you grow up, and you become a disciplined investor. As an individual, you can save more if you start investing early in your working life as the expenses are limited during this time. However, responsibility goes up with marriage, and you may not be able to invest as planned when you are in your thirties with a family.

How early saving helps you to achieve goals with small amounts

As said above, start investing in mutual fund SIP at an early age helps you to accomplish your financial goals with much smaller amounts and benefit from the potential of compounding. For example, you need to invest Rs.1540 as a SIP if you start investing at the age of 25 to achieve a financial goal of Rs.1 crore when you reach the retirement age. You can achieve the financial stability that you need by the time you turn 60 by directing only a SIP of Rs. 1540 per month for nearly 35 years in an equity fund. In this case, we assume that the fund returns 12% annually. But if you start your mutual fund SIP at the age of 35, you will get only 25 years to invest before you reach the retirement age of 60. Assume the same rate of return in this case also, but you need a SIP of Rs. 5270 per month for attaining the same financial goal. From this example, you get an idea about the advantage of starting saving early. A person can achieve the same financial goals by investing much less monthly SIP if he starts saving early.

Achieve your goals faster if you start investing early

SIP mutual funds have been gaining popularity as it is an ideal way to build wealth over the long term. It is a simple tool that helps investors to generate wealth over a long period with small investments regularly like weekly, monthly, or annually. An investor needs to invest a predetermined amount at regular intervals in a mutual fund scheme to achieve his or her financial goals. You can reap more benefits if you start investing in a mutual fund SIP at an early age. An individual can amass Rs. 14.82 crores at the age of 60 if he starts investing Rs.10000 monthly in a SIP equity fund at the age of 25. Remember to raise your SIP contribution 10% every year. The same person will get only 3.70 crores when he turns 60 if he starts investing in the same fund at the age of 35 even if he raises his contribution by 10% annually. The original investment in the former case is Rs.3.25 crores and the return generated is Rs.11.57 crores while Rs.1.18 crore is the original investment in the latter case, but his return is 2.52 crores. The return is 356% of the capital in the first case while it is only 213% in the second one.
Start investing in SIP mutual fund early if you want to be a star investor. You can enjoy many benefits in investing in a Systematic Investment Plan of mutual funds, especially if you start it in your twenties. Disciplined investing is the most attractive feature of mutual funds. Even if a person can continue investing in SIP for long term for building better returns, he or she can discontinue it at any point during their investment cycle. Apart from that, it allows you the flexibility of increasing or decreasing the amount that you want to invest in a fund. Mutual funds are the best investment tool to generate wealth, especially if you start a SIP in your twenties as the power of compounding works best for early investors. Be a star investor by start investing early and build great wealth to make your future financially secure.

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”, so let me do Nivesh