Download - Systematic Investment Plan
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Systematic Investment Plan (SIP)
SimpleMin Investment of only Rs.500
IntelligentIntelligentBenefit from the Power of Compounding
PracticalLink to your Financial Goals
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Did you know ?
If your current monthly expenses are
Rs. 30,000/- p.m, after 20 years you will
require Rs. 80,000/- p.m to maintain the
same lifestyle
Assuming inflation rate of 5%
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Did you know ?
An education degree for your child
which currently costs Rs. 10 lakh will
cost Rs. 21 lakh after 15 years.
Assuming inflation rate of 5%
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Individual Investor Needs: Investment Goals
• All individuals need to save for
– Retirement
– Child’s education / marriage
– Medical emergency– Medical emergency
– Other family obligations
Every individual has one or more of the above goals
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Individual Investor: Life Stages
Earnings
Consumption
Savings
60Retirement
40Middle Age
27Young Married
22Young Independent
All individuals have a finite period to save for their investment goals
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Value of Money over time
Impact of inflation on monthly
expenses of Rs. 30,000 today
Value of Rs. 100,000 over time
62,368
79,599
100,000
78,353
48,102
At inflation of 5%
Investors need to beat inflation
30,000
38,288
Today 5 years 15 years 20 years
48,102
37,689
Today 5 years 15 years 20 years
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Performance of Various Asset Classes
Cumulative annualised returns 1980-2004
6.7%
10.3%
15.6%
8.9%
Equities outperform other asset classes over the long term
6.7%5.7%
3.55%
-1.1%
Inflation Gold Bank FDs BSE Sensex
Growth Real Growth
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Individual investors are scared of …..
The Downside in EquitiesRisk
The of Market Timing
The of Market VolatilityRisk
Risk
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What else makes a material impact on
investments in equity ?
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Investing in the BSE Sensex – 25 years
16.02%16.90%
15.07%
Returns are from 1981- Dec 2005
Market timing does not matter over the long term
Fixed investment on 1st day of every month
Fixed investment athighest sensex value
every year
Fixed investment atlowest sensex value
every year
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The Power of Compounding
Monthly
investmentRs. 5,000Rs. 5,000Rs. 5,000
BSE Sensex
Scenario B
BSE Sensex
Scenario A
Debt
Instrument
From Jan 1, 1984 to Dec 31, 2004 – a 21 year period
Final corpus Rs. 1.9 croreRs. 89 lakhRs. 43 lakh
Assumed
annualised return20%15%10%
investment
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Summary
Investors needs to save
regularly and invest those
savings in higher return
assets to create wealth
Long Term Systematic
Monthly Investment in
equity schemes is ideal
for this
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How Do You Achieve Your Financial Goals
• Retirement
• Child’s education - international
• Family commitments - medical emergency, etc• Family commitments - medical emergency, etc
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83,579
Monthly Household ExpensesRetirement corpus requiredto meet post retirement expenses.(if invested at 7%)
1.4 crore
Retirement Planning
TodayAt the time
of retirement
30,000
21 Yrs
Inflation 5%
Monthly investment neededto meet post retirement expenses
at 12%
at 15%
at 18%
12,583
8,083
5,090
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Child’s Education
Educational Degree
Monthly investment neededto achieve this goal34,20,000
PresentWhen your child
actually goes for this degree
11 Yrs
Inflation 5%
at 12%
at 15%
at 18%
12,456
10,166
8,237
20,00,000
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Child’s Marriage
Monthly investment neededto achieve this goal
43,70,000
at 12%
at 15%
at 18%
7,509
5,466
3,925
PresentWhen marriage
actually takes place
16 Yrs
Inflation 5%
20,00,000
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So What Are The Benefits Of Investing Through
A Systematic Investment Plan !
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Benefit : 1
• The Benefit of Long Term Equity Investment
– Equities give superior returns among all asset classes over the long term
– Mutual Fund has a track record of consistent good performance relative to index.
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Benefit : 2
• The Benefits of Systematic Monthly Investment
– Takes out the risk of market timing
– Adds the benefits of the power of compounding and – Adds the benefits of the power of compounding and rupee cost averaging
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Benefit : 3
• Flexibility
– You can choose from a wide array of schemes
– You can decide to keep invested amounts in an earlier scheme & invest future SIP instalments into a new schemescheme & invest future SIP instalments into a new scheme
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Benefit : 4
• Added Convenience
– Auto debit facility across major cities in India
– Regular account statements– Regular account statements
– Redemption request directly credited into your bank account
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Make your investment goals a reality
Start a S.I.P. today !
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A Rupee Saved Is A Rupee Earned
- A Long Journey Begins With A Small Step
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