Ramesh & the Magic of SIP
Ramesh’s Goal: Daughter’s higher education in 10 years Plan: SIP of ₹5,000/month in an equity mutual fund at 12% average return How His Money Grew Estimated Value (₹) 11,61,000 Extra Growth from Compounding: ₹5,61,000 over 10 years! Why SIP Worked for Ramesh ✅ Small monthly investment (₹5,000) ✅ Regular habit — money auto-deducted ✅ Bought more units when markets were low (rupee-cost averaging) ✅ Stayed invested even in market falls ✅ Let compounding work for him Advantages Start small, no big lump sum needed Builds financial discipline Potential for higher long-term returns than FD or savings account Protects against market timing mistakes Disadvantages Not ideal for short-term goals (1–2 years) Returns can be low if you exit early during a market fall Choosing a bad mutual fund affects growth Ramesh’s Checklist for Every Investor 🎯 Set a Goal before starting ⏳ Start Early & Stay Long (5–10 years) 💡 Pick the Right Fund (check ratings & past performance) 🔄 Review Once a Year 💪 Don’t Stop SIP when markets fall — that’s when you get more units!
PERSONAL FINANCE
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