Stay financially healthy with SIP (Systematic Investment Plan)

-
In our previous blog we have learned the zest of what are SIP, SWP and STP . In our today’s topic we will learn about the role of SIP in our financial health. Let us see why we need SIP but first and foremost lets get the brief idea what financial health and goals are What are Financial Goals For instance, we all have our future goal where we want to get something like a private flat and as the time pass so does our needs grow, and we would want to buy a more luxurious car and go holidaying in the foreign countries. This is like natural progression if we look at it there is a pattern here, our need increase as we start to earn more and all these needs are classified as our financial goal like retirement and child education. How to achieve the Financial Goals The problem with growing needs is that only saving won’t be of much help. So now the question arises how do  we achieve all our financial goals? And the answer to this is we need a plan and a systematic way to execute t
Post a Comment

The Three S's of Financial Planning

-
In our previous post we have learned about the basic of Mutual Funds
This post is about the Three S’s of financial planning SIP, SWP, and STP
If you are new in the world of investment, then this is the perfect post for you

What is SIP, SWP, and STP?

SIP(Systematic Investment Plan)

When you are investing a fixed amount every month on a specific this is known as the systematic investment plan. This is the basically for those who are planning to do investment for more than 5 years. The main benefits of SIP are:
  • Cost averaging benefit- maximum benefit in rupee
  • Power of compounding- which helps your investment grow massively

SWP(Systematic Withdrawal Plan)

Systematic Withdrawal Plan is the opposite of SIP. Whereas in SIP we are investing into a mutual fund with a fixed sum of amount for a specific period, in SWP we are regularly withdrawing a specific amount from a fund. You will fix how much to withdraw and when to withdraw. Your fund value and number of units will reduce to the extent of each withdrawal.

STP (Systematic Transfer Plan)

When you initially invest a lump sum amount in one scheme and regularly transfer or switch a predetermined amount into another investment scheme of the same fund house this is known as STP. The main benefit of STP is, it allows the investor to transfer a fixed sum of money at the specified date from debt scheme to equity scheme. And as we know Time is Money STP helps in saving a lot of time and effort of the investors.
So this is the basic of STP SIP and SWP of Financial Planning.

Comments

Post a Comment

Popular posts from this blog

Stay financially healthy with SIP (Systematic Investment Plan)

-
In our previous blog we have learned the zest of what are SIP, SWP and STP . In our today’s topic we will learn about the role of SIP in our financial health. Let us see why we need SIP but first and foremost lets get the brief idea what financial health and goals are What are Financial Goals For instance, we all have our future goal where we want to get something like a private flat and as the time pass so does our needs grow, and we would want to buy a more luxurious car and go holidaying in the foreign countries. This is like natural progression if we look at it there is a pattern here, our need increase as we start to earn more and all these needs are classified as our financial goal like retirement and child education. How to achieve the Financial Goals The problem with growing needs is that only saving won’t be of much help. So now the question arises how do  we achieve all our financial goals? And the answer to this is we need a plan and a systematic way to execute t
Read more

A Beginner's Guide to What is Mutual Funds

-
What is a Mutual Funds? First let us learn the definition of Mutual Funds, it is an investment programme funded by shareholders that trades in diversified holdings and is professionally managed'. In the more simple language the word 'Mutual' means 'A group of people coming together' and 'Fund' means 'pooling of money'. Therefore the term Mutual Funds suggests a group of people putting their money together to buy stocks and bonds and in some cases the combination of both. Well we can take an example of a baker making a million pound cake and this cake is made out of variety of ingredients, each ingredient of the cake are the bonds and shares. And just like combining different ingredients give makes a cake, bonds and share makeup a portfolio. But now the question is how to invest the bonds and shares And the answer is a professional Fund Manager. Fund manger manages the pool of money and builds a portfolio which is in line with the invest
Read more