If you have been working for a few years, there is every chance that you have heard of investing for the future. There are tonnes of methods to go about doing this, but the kind of instrument you use and the type of returns you are looking for makes all the possible difference to your investment idea. Many of us think of investing today for a larger growth over time, and the best way to do this is to invest out of habit and more importantly make it a routine.
That is precisely when I realised the benefits of investing on a regular basis. Being able to track the kind of spends I make on a monthly basis and also put aside the monies that I want for the future. Not many of us think this way, but it makes a lot of sense to put in your money today for a rainy day tomorrow. An SIP mutual fund is the simplest way to do this. Your planning is much in advance and you are sure of being able to commit to that number in an easier manner. Most of us are sure of the kind of earnings we have month on month and if we can plan on putting that money in a sure place to get higher returns over a 2-3 year period, there is nothing more you can actually ask for. One of the first few points that I felt after making my first investment was the kind of returns I could get with a regular investment. So, instead of putting Rs 60,000 at the end of the year, I decided to put on Rs 5,000 at the end of every month. I never really felt the pinch of losing out Rs 5,000 every month and at the end of the year, I had a fairly nice amount invested in the mutual fund. This was a huge advantage for me – a single earner who would have spent that money otherwise.
The second advantage of investing in such funds was that I could average out my costs on the long run. Based on the fixed amount you invest every month, you are getting a fixed amount of units on that fund. When that fund increases or decreases in value, you are immediately getting a revised number of units. That almost guarantees that you averaging out your costs on the long term. So, at the end of the tenure, you are getting a gain either way from your investment.
More over, there is a lock in period when you invest in any of the systematic investment plans and if you ask me, that is a sure shot benefit for someone investing early in their career. The first few months of you earning money are going to be spent in thinking of ways to spend that money, you might as well think of saving that money and the best way to do that is by putting your money in your investment right at the start of the month and to have a lock in period of at least a year. That will ensure you not pulling your money out for a year and committed to it. That is a huge positive for an early investor.
Many of us look at an SIP as a complex investment tool, but in all fairness, it is the simplest and easiest tool to set up and make sure you are making a health return each year. There are going to be many such venues to make profits from, but from an early investor right to someone who has been putting money in the market for ages, a mutual fund is a sure shot idea. If you have been thinking about investing for the future and saving up for a rainy day, there cannot be a better time to get started. You would be able to see healthy returns quickly and also have stronger investment ideas come out of it. At the end of the day, you would also be able to build a strong portfolio of investments and that does give you a lot of benefits on the long run. Many of us put the idea of investing to a later date, the easiest and best idea is to start investing today – there is not a better time.