SIP For Middle Income Group Employees

SIP For Middle Income Group Employees

As the income of the middle-class group is increasing, people are becoming more financially conscious. Many people are showing interest in investing in the stock market and mutual funds. However, there are still a large number of people who are unaware of the details. 

In that case, SIP could be a great solution. Now if you are wondering what is SIP, then we are here to help you out. This article will solve your problem regarding SIP and we will also cover the benefits that a middle-income group employee can get by SIP investment. 

What is a Systematic Investment Plan?

SIP or Systematic Invest Plan is an investment process that helps investors to invest a small amount to a particular mutual fund scheme on monthly basis. This investment system is more disciplined and ensures to give the best financial solution.

You can start your SIP with investing websites or mobile apps and enable auto-debited mode to have a hassle-free investment. Many mutual fund companies provide low SIP programs, even Rs. 100 monthly. 

The Difference Between SIP And Lump Sum Investment

Lump-Sum is a one-time investment and you can keep it for years. However, for people who are investing a lump sum amount, the growth rate could be lower than SIP. On the other hand, it’s hard to invest in a lump sum when you are just starting your career. This is why SIP is the better solution. 

Benefits of SIP Investment

You know what is a SIP and what is the crucial difference between SIP and lump sum investments. There are many benefits of a SIP investment including:

1. Disciplined Investing

When you are investing every month, you will be habituated about it. And it will help you grow as a financially independent person. Well, only earning does not make someone financially independent when the person is having a burden of EMIs. 

2. Rupee Cost Averaging

A SIP investment will give you substantial returns. This means when you are investing through a monthly SIP for Rs. 5000 at a rate of 12%, you can get up to 12 lakhs in the next 10 years. 

3. Emergency Fund

SIP can work as a good emergency fund as you can withdraw the money at any time. Moreover, when you are investing in a debt fund through SIP, you don’t need to pay taxes to money withdrawal. 

4. Flexibility 

Another best thing about SIP is it’s very flexible. You can skip a SIP without any issue. Moreover, you can discontinue a SIP anytime. However, continuing with SIP is ideal because of the good return it promises. 

5. Convenience

Many investing apps or websites provide hassle-free investments through SIP. You can enable the auto-debit system and they will debit the required amount on the selected date. 

Conclusion

You see how investing through SIP could be beneficial for you, especially when you have a limited income or you just started your career. However, you have to do deep research before you start investing. There are many resources on the internet that can help you out.