If you have visited here for the reasons to increase your SIP, then we assume you must be knowing what SIP is. But for a quick overview here is some on that for you.
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What is SIP?
A Systematic Investment Plan or SIP is a smart and hassle-free mode for investing money in mutual funds. SIP allows you to invest a certain pre-determined amount at a regular interval (weekly, monthly, quarterly, etc.).
How does SIP Work?
A SIP is a flexible and easy investment plan. Your money is auto-debited from your bank account and invested into a specific mutual fund scheme. You are allocated certain number of units based on the ongoing market rate (called NAV or net asset value) for the day.
Well now that you know every basic about SIP, here is why you should increase your SIP.
Achieving your goal sooner:-
It is one of the most trending and common reason. The trigger for this is also a realization of how easy it is to save once you set up your automated SIP. A goal that is 2 or 3 years away, which you have had planned for your future and your family’s too, can be achieved sooner if you add some more to your SIP amount.
Taking sabbatical from work:-
For those, who wish to take a planned break, it does make sense to increase their SIP now. It also helps in 2 ways: by cutting down expenses, so your money lasts longer in your break and by creating a larger savings pool plus giving you a good spirit and vibe.
People with thoughts like, cutting down on commute by cabs to work, by buying a bike:-
This is how a bit of forward thinking can go a long way in creating a virtuous cycle. Use your savings to replace a recurring expense and create even more savings. Find your own reason to increase your SIP in 2018. Make it your first task in the year. Increased SIPs every year can enhance your portfolio of investments than constant SIPs through the years.