When it comes to getting substantial returns on investment, mutual funds are quite popular amongst other investment options. Investing money in mutual funds through a robust SIP investment plan can help you build massive wealth in the long run. A SIP (Systematic Investment Plan) is a mode of investing in mutual fund schemes systematically. It allows you to invest a certain amount at regular intervals of time & helps you create a corpus for the future.
Mutual fund experts believe that SIP is one of the best ways to invest in mutual funds to achieve financial goals. According to AMFI, Indian Mutual Funds currently have about 30.9 million SIP accounts through which individuals regularly invest in mutual fund schemes.
As the benefits of investing in mutual funds through a SIP is understandable, you must understand the procedure of starting a SIP investment plan in a disciplined manner to meet your goals.
Here are three simple steps you can follow to invest in a SIP investment plan:
Identify Your Objectives
The first step of starting a SIP investment plan always starts with determining investment objectives. It’s essential to define the purpose of an investment before putting your hard-earned money into any kind of investment plan. For instance, if you plan on buying a house worth, then you can strategically invest in mutual funds to build the required corpus and fulfill this goal.
Determine the Investment Tenure
Determining your investment tenure is equally important as identifying your SIP investment objective. It helps you in assessing the amount of savings that need to be done. For example, if you require a considerable amount in a short tenure, then a monthly amount for your SIP investment plan should be high.
Gather Necessary Documents (KYC)
KYC compliance is an important activity that you must do before investing in mutual funds. This hassle-free process for a SIP investment plan includes submitting necessary documents & takes 4-5 days to complete. You can do KYC compliance through online or offline mode. After completing the procedure, you can invest in various mutual fund schemes.
Determine the Best SIP Investment Plan
Choosing the apt SIP investment plan is the most crucial thing. Before investing in any SIP investment plan, you need to examine whether the mutual fund scheme meets your requirements adequately, and your risk-appetite matches your scheme’s requirements.
Additionally, check the mutual fund company’s reputation & credentials of the fund manager managing the mutual fund scheme before planning to invest in a SIP investment plan.
Decide the Amount & Observe Your Investment
It’s critical to determine the investment amount before investing in a SIP plan. To decide the amount, you can use the SIP calculator & get help in understanding how much amount is to be invested to attain your financial objective.
To make a SIP plan a financial success, just investing your money is not enough. You need to continuously monitor your SIP investments and check whether your funds are performing well or not. Moreover, rebalancing funds on a timely basis makes them more effective.
Plan Right to Create Wealth Via SIP
Considering the above steps, you can choose a well-performing mutual fund scheme & understand the scheme’s functionalities completely to earn maximum returns on your investment. SIP is among the most successful ways to invest in top-performing mutual funds to get huge returns. As there is a lack of awareness of SIP benefits among beginners, renowned financial advisory service providers like FinEdge are stepping forward & helping them by providing a handholding approach to build long-term wealth by investing in SIP investment plans.