It is been said that best EMI is mutual fund SIP. In this post, we would discuss why is it required to plan your financial goal earlier. Plan your goal and start the mutual fund in SIP. For instance, you are planning to get married after 5 years, start your investment today by investing monthly 20000 rupees in mutual fund SIP mode. The money would get invested in the market and give you lump sum for your financial goal. Do not plan to avail personal loan for your planned financial goals. Personal loan is huge loss if you consider compounding effect on the investment.
Do not plan to avail personal loan for your planned financial goals.
Personal Loan and EMI:
Personal Loan amount : Rs 10,00,000 (Ten lakhs)
Processing fees & others: – 50,000
Final loan amount in hand : 9,50,000
Interest : 13%
EMI : Rs. 22,800 (monthly)
Tenure : 5 years (60 months)
Total Amount paid : 13,65,000 ( for Rs. 9,50,000)
Mutual Funds investment in SIP:
SIP or Systematic Investment Plan is a mode of investing in Mutual Funds. With a SIP the money gets invested monthly to generate wealth. SIP is one of the best ways to invest in Mutual funds and it is not required to invest in lumpsum . we can invest small amounts regularly to create wealth. Also, the minimum amount of investing in SIP is as less as INR 100, which makes it further more convenient for investors. As per an analysis of the stock market, it is seen that SIP returns are better if one remains invested for a long duration. Let us take example of monthly investment of Rs.22,800 in mutual funds.
Monthly SIP : Rs. 22,800 (monthly)
Approx Return : 13%
Investment Horizon : 60 months
Expected Return : Rs. 19,50,000
Mutual fund SIP would save you from EMI trap in Future.
The same EMI of the personal loan in the mutual fund SIP returns, double the amount invested in 5 year horizon. Select 1 large cap, 1 mid cap or 1 small cap fund, 1 debt fund with monthly SIP. Let us align your investment in mutual fund SIP.
ICICI PRUDENTIAL US BLUECHIP EQUITY GROWTH DIRECT PLAN – Rs. 6000
UTI NIFTY NEXT 50 INDEX GROWTH DIRECT PLAN – Rs. 6000
MOTILAL OSWAL FOCUSED 25 GROWTH DIRECT PLAN – Rs. 6000
RELIANCE LIQUID GROWTH DIRECT PLAN – Rs. 5000
Start your mutual fund investment based on your financial goal. If your financial goal is beyond 5 years, allocate maximum in equity related funds. It gives high returns in long term. Allocate minimum 20% your investment in debt mutual funds for better diversification. Debt mutual fund would help in case of emergency as well.
For investment horizon for 5 years,
80% in equity mutual funds with mix of Large cap, mid cap and small cap.
20% in debt mutual funds.
Align all your financial goal with mutual fund investment and start today. Do not plan your planned financial goal with personal loan. It is not recommended financial advice. Mutual fund SIP is one more step to become Rich. Happy Investing.