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How to become Crorepati?
Systematic Investment Plan

Become a Crorepati: Systematic Investment Plans (SIPs) of Mutual Fund.


The Power of Compounding

Compounding is the financial equivalent of a snowball rolling downhill. With each revolution, the snowball gets bigger because it picks up even more snow every time around. Compounding produces a snowball effect with money because the earnings each year contribute a little more to earnings the following year. As time passes, the earnings contribute more and more to the total value of an investment.

The longer the period of your investment, the more you accumulate, because of the power of compounding, which is why it is very important to start investing early.

Making ONE Crore is easy at an assumed growth rate of 15% per annum, you just need to stay invested for longer period of time.

Monthly Investment Amount (SIP) Years to become a Crorepati
1,444 30
4,890 22
9,169 18
14,959 15

Our investment strategy here will be long term equity participation and staying invested through the best investments options through systematic investments till you achieve your stipulated goal.

POWER OF SIP: A true case scenario of power of compounding..

If you had invested Rs 10,000 every month in HDFC PRUDENCE FUND

SIP Investment Since Inception 15 Year 10 Year 5 Year 3 Year
Total Amount Invested 2,210,000 1,800,000 12,00,000 6,00,000 3,60,000
Market Value as on Jun 29, 2012 23,258,500 12,557,600 3,598,600 840,400 400,200
Annualized Returns 22.06% 23.09% 20.83% 13.47% 7.02%
Benchmark Returns # NA NA 11.14% 6.10% 3.23%

Performance of HDFC PRUDENCE FUND as on June 29, 2012

Past Performance may or may not be sustained in the future
# CRISIL Balanced Fund Index
Inception Date: Feb 1, 1994
Source: HDFCMF Fact Sheet June 2012

What is Systematic Investment Plan?

  • A specific amount should be invested for a continuous period at regular intervals under this plan.
  • SIP is similar to a regular saving scheme like a recurring deposit. SIP is mode of investing a fixed sum regularly in a underlying Mutual Fund.
  • SIP allows the investor to buy units on a given date every month. The investor decides the amount and also the mutual fund scheme.
  • While the investor's investment remains the same, more number of units can be bought in a declining market and less number of units in a rising market.
  • The investor automatically participates in the market swings once the option for SIP is made.

SIP ensures averaging of rupee cost as consistent investment ensures that average cost per unit fits in the lower range of average market price. SIP generally starts at minimum amounts of Rs.100/- per month.

SIP investor

It is easy to become a systematic investor. One need to plan the saving effectively and set aside some amount of money every month for investment purposes in a fund that is ideally a diversified equity fund or balanced fund. The investor is at liberty to exit from the scheme depending on the market conditions.

Benefits of Systematic Investment Plan

Power of compounding:

The power of compounding underlines the essence of making money work if only invested at an early age. The longer one delays in investing, the greater the financial burden to meet desired goals. Saving a small sum of money regularly at an early age makes money work with greater power of compounding with significant impact on wealth accumulation.

Rupee cost averaging:

Timing the market consistency is a difficult task. Rupee cost averaging is an automatic market timing mechanism that eliminates the need to time one's investments. Here one need not worry about where share prices or interest are headed as investment of a regular sum is done at regular intervals; with fewer units being bought in a declining market and more units in a rising market. Although SIP does not guarantee profit, it can go a long way in minimizing the effects of investing in volatile markets.

Convenience:

Investing in Mutual Fund with SIP route is easy. SIP can be operated by simply providing the ECS/Auto debit instructions from your bank account for an amount of your choice and in a fund of your choice. The SIP plans are completely flexible. You can invest for a minimum of six months, or for as long as you want. SIP can be cancelled with a one month notice period.

SIP features

Disciplined investing is vital to earning good returns over a longer time frame. Investors are saved the bother of identifying the ideal entry and exit points from volatile markets. SIP options such as equity, debt and balanced schemes offer a range of investment plans. While there is no entry load on SIP, investors face an exit load if the units are redeemed within a stipulated time frame. The success of your SIP hinges on the performance of your selected scheme.

Testimonials

I have had never invested money in equity. However, I have been advised to start investing money in equities by Mutual Fund SIP. Now I know, how to take advantage from the equity as an asset class. Thanks for the great advice.

Rahul Saxena – MBA Marketing- IIM

“Thanks for the great service. I didn’t know anything about investing until I called Fcafe.You made it seem easy.”


Gaurav Mahtur- Head -IT

“I have been dealing with Financial Cafe for the last 3 years and I can vouch for professionalism and honesty in all their dealings. I have never had the need to look for another establishment for any of my financial requirements”

Dr. Rajeev Garg

“I used to lie awake nights worrying about how I was going to put two kids through MBA. Now I sleep like a baby. Thank you Financial Cafe”


Renu – Homemaker

I congratulate for good work and wish them best of luck for future.

Jasvinder Singh- Head- India & South-east Asia

Though my comfort in handling technicalities involved in financial domain has always been my forte in the past, Financial Café has helped me develop new insight about the financial planning. Indeed, Financial Café is perfectly suited for all individuals, who seriously believe in shaping the future.

Manoj Verma- Vice president- Sales

The simplicity & clarity in the approach adopted by financial café is remarkable. Their step-up approach is very pragmatic and easy to implement. I found portfolio rebalancing generating better returns as you put more money in equity when share market are lower level and withdraw money when markets are at their peak.

CA. Sachin Gupta

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