SIP TOP-UP & the Big difference it makes

SIP stands for Systematic Investment Plan.

SIP is the best way to invest because:

  1. Disciplined investment approach – we invest every month
  2. We get salary every month, we spend every month, so we should also invest every month. SIP gets auto-debited in 1st week of every month allowing us to invest before spending
  3. We invest at different market levels each month. It leads to rupee-cost averaging
  4. By investing small amounts monthly, we can create huge wealth in long-term

If you do an SIP of Rs. 15000 p.m for 30 yrs and if rate of return is 15%. Then the wealth accumulated is Rs. 7,82,54,126.

SIP amount 15000
Yearly % increase in SIP 0%
Expected rate of return p.a 15%
No. of yrs 30
Amount accumulated Rs. 7,82,54,126

 

In the above scenario, SIP amount is constant throughout the 30 year period. If the SIP amount is increased by a certain % every year, see what happens.

SIP amount 15000 15000 15000 15000
Yearly % increase in SIP 5% 7% 10% 15%
Expected rate of return p.a 15% 15% 15% 15%
No. of yrs 30 30 30 30
Wealth accumulated Rs. 11,14,01,693 Rs. 13,18,48,913 Rs. 17,55,44,531 Rs. 30,70,18,943
  • If SIP amount is increased by 5% every year, then you will accumulate Rs. 11,14,01,693, which is Rs. 3,31,47,567 more than the wealth accumulated without increasing SIP year-on-year.
  • Increasing SIP by 7% every year, wealth accumulated is Rs. 13,18,48,913, more by Rs. 5,35,94,787
  • Increasing SIP by 10% every year, wealth accumulated is Rs. 17,55,44,531, more by Rs. 9,72,90,405
  • Increasing SIP by 15% every year, wealth accumulated is Rs. 30,70,18,943, more by Rs. 22,87,64,817

Conclusion:

It is important to start SIPs and continue for long-term. And it is most important to increase your SIPs every year without fail.

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SIP Top-Up & the Big Difference it makes

SIP stands for Systematic Investment Plan.

SIP is the best way to invest because:

  1. Disciplined investment approach – we invest every month
  2. We get salary every month, we spend every month, so we should also invest every month. SIP gets auto-debited in 1st week of every month allowing us to invest before spending
  3. We invest at different market levels each month. It leads to rupee-cost averaging
  4. By investing small amounts monthly, we can create huge wealth in long-term

If you do an SIP of Rs. 15000 p.m for 30 yrs and if rate of return is 15%. Then the wealth accumulated is Rs. 7,82,54,126.

SIP amount 15000
Yearly % increase in SIP 0%
Expected rate of return p.a 15%
No. of yrs 30
Amount accumulated Rs. 7,82,54,126

 

In the above scenario, SIP amount is constant throughout the 30 year period. If the SIP amount is increased by a certain % every year, see what happens.

SIP amount 15000 15000 15000 15000
Yearly % increase in SIP 5% 7% 10% 15%
Expected rate of return p.a 15% 15% 15% 15%
No. of yrs 30 30 30 30
Wealth accumulated Rs. 11,14,01,693 Rs. 13,18,48,913 Rs. 17,55,44,531 Rs. 30,70,18,943
  • If SIP amount is increased by 5% every year, then you will accumulate Rs. 11,14,01,693, which is Rs. 3,31,47,567 more than the wealth accumulated without increasing SIP year-on-year.
  • Increasing SIP by 7% every year, wealth accumulated is Rs. 13,18,48,913, more by Rs. 5,35,94,787
  • Increasing SIP by 10% every year, wealth accumulated is Rs. 17,55,44,531, more by Rs. 9,72,90,405
  • Increasing SIP by 15% every year, wealth accumulated is Rs. 30,70,18,943, more by Rs. 22,87,64,817

Conclusion:

It is important to start SIPs and continue for long-term. And it is most important to increase your SIPs every year without fail.

Do you have an Emergency Fund?

Emergency-FundEmergencies—from a broken bone to a layoff—are a fact of life. When you’re faced with life’s unexpected events, you should be ready.

An emergency fund is an account used to set aside funds needed to cover the financial surprises life throws your way such as a job loss, accident, temporary health issues, flooding due to heavy rains resulting in damage to property or vehicle or any other natural disaster etc. These unexpected events can be stressful and costly. It is better to be prepared.

How much money is needed as Emergency Fund?

Atleast 4 – 6 months expenses.

What will happen if one doesn’t have emergency fund?

You will be forced to liquidate your long-term investments to meet expenses during emergencies. This will only affect your long-term financial goals for which you are investing.

Hence, it is always prudent to maintain an emergency fund separately.

Where emergency fund money can be invested?

There are few options:

  1. Savings Account (Bank)
  2. Liquid Fund (Mutual Fund)

Savings Account offers 4% interest rate.

Liquid Fund offers interest rate equal to or slightly better than prevalent FD rate.

In view of the liquidity & better rate of return, it is better to choose Liquid Fund for investing Emergency Fund money.

How to invest in Liquid Fund?

Investment can be done online in 2 minutes & redemption (selling) also can be done online in same time. Upon redemption, money will be credited to your Bank account directly.

It might be difficult to accumulate 6 months expenses at once. Instead, you can keep accumulating some amount every month in liquid fund and top it up whenever you have surplus. It is important to accumulate Emergency fund ASAP.

Please feel free to contact me if you have any queries.

Thanks & Regards
Vinay Kumar Laxman

Certified Financial Planner &
AMFI Certified Mutual Fund Advisor

Ph: 91-9538539049

Email: laxman.vinay77@gmail.com

Do you have an Emergency Fund?

Emergency-FundEmergencies—from a broken bone to a layoff—are a fact of life. When you’re faced with life’s unexpected events, you should be ready.

An emergency fund is an account used to set aside funds needed to cover the financial surprises life throws your way such as a job loss, accident, temporary health issues, flooding due to heavy rains resulting in damage to property or vehicle or any other natural disaster etc. These unexpected events can be stressful and costly. It is better to be prepared.

How much money is needed as Emergency Fund?

Atleast 4 – 6 months expenses.

What will happen if one doesn’t have emergency fund?

You will be forced to liquidate your long-term investments to meet expenses during emergencies. This will only affect your long-term financial goals for which you are investing.

Hence, it is always prudent to maintain an emergency fund separately.

Where emergency fund money can be invested?

There are few options:

  1. Savings Account (Bank)
  2. Liquid Fund (Mutual Fund)

Savings Account offers 4% interest rate.

Liquid Fund offers interest rate equal to or slightly better than prevalent FD rate.

In view of the liquidity & better rate of return, it is better to choose Liquid Fund for investing Emergency Fund money.

How to invest in Liquid Fund?

Investment can be done online in 2 minutes & redemption (selling) also can be done online in same time. Upon redemption, money will be credited to your Bank account directly.

It might be difficult to accumulate 6 months expenses at once. Instead, you can keep accumulating some amount every month in liquid fund and top it up whenever you have surplus. It is important to accumulate Emergency fund ASAP.

Please feel free to contact me if you have any queries.

Thanks & Regards
Vinay Kumar Laxman

Certified Financial Planner &
AMFI Certified Mutual Fund Advisor

Ph: 91-9538539049

Email: laxman.vinay77@gmail.com

 

How much money do I need to Retire?

retirement4

We all retire one day. It is said post-retirement years are the golden period in everyone’s life. But yes, only if you plan properly for it.

Have you ever wondered “how much money you need as Retirement corpus to survive post-retirement period?”

Just an illustration below

Current Monthly expenses 35000 35000 35000 35000 35000
Current annual expenses 420000 420000 420000 420000 420000
Current age 30 35 40 45 50
Retirement age 60 60 60 60 60
No. of yrs to retirement 30 25 20 15 10
Inflation 8.50% 8.50% 8.50% 8.50% 8.50%
Annual expenese @ retirement Rs. 48,54,466 Rs. 32,28,440 Rs. 21,47,059 Rs. 14,27,892 Rs. 9,49,613
Rate of return post-retirement 9% 9% 9% 9% 9%
Real rate of return post-retirement 0.46% 0.46% 0.46% 0.46% 0.46%
Life expectancy 80 80 80 80 80
No. of yrs post-retirement 20 20 20 20 20
Retirement corpus required to fund post-retirement expenses Rs. 9,29,72,569 Rs. 6,18,30,981 Rs. 4,11,20,411 Rs. 2,73,46,941 Rs. 1,81,86,958

It is never too late to save for retirement. I want to change this and say –It is never too early to save for retirement“.

The earlier you achieve the retirement corpus, the earlier you can retire. Retirement doesn’t mean you will stop working – but you can stop working for MONEY. May be you can work on something you are passionate about and could not pursue due to hectic corporate life.

 

Vinay Kumar Laxman

Certified Financial Planner

91-9538539049

Laxman.vinay77@gmail.com

How much money do I need to Retire?

We all retire one day. It is said post-retirement years are the golden period in everyone’s life. But yes, only if you plan properly for it.

Have you ever wondered “how much money you need as Retirement corpus to survive post-retirement period?”

Just an illustration below

Current Monthly expenses 35000 35000 35000 35000 35000
Current annual expenses 420000 420000 420000 420000 420000
Current age 30 35 40 45 50
Retirement age 60 60 60 60 60
No. of yrs to retirement 30 25 20 15 10
Inflation 8.50% 8.50% 8.50% 8.50% 8.50%
Annual expenese @ retirement Rs. 48,54,466 Rs. 32,28,440 Rs. 21,47,059 Rs. 14,27,892 Rs. 9,49,613
Rate of return post-retirement 9% 9% 9% 9% 9%
Real rate of return post-retirement 0.46% 0.46% 0.46% 0.46% 0.46%
Life expectancy 80 80 80 80 80
No. of yrs post-retirement 20 20 20 20 20
Retirement corpus required to fund post-retirement expenses Rs. 9,29,72,569 Rs. 6,18,30,981 Rs. 4,11,20,411 Rs. 2,73,46,941 Rs. 1,81,86,958

It is never too late to save for retirement. I want to change this and say –It is never too early to save for retirement“.

The earlier you achieve the retirement corpus, the earlier you can retire. Retirement doesn’t mean you will stop working – but you can stop working for MONEY. May be you can work on something you are passionate about and could not pursue due to hectic corporate life.

 

Vinay Kumar Laxman

Certified Financial Planner

91-9538539049

Laxman.vinay77@gmail.com

How much money do I need to Retire?

We all retire one day. It is said post-retirement years are the golden period in everyone’s life. But yes, only if you plan properly for it.

Have you ever wondered “how much money you need as Retirement corpus to survive post-retirement period?”

Just an illustration below.

Current Monthly expenses

35000

Current annual expenses 420000
Current age 30
Retirement age 60
No. of yrs to retirement 30
Inflation 8.50%
Annual expenese @ retirement Rs. 48,54,466
Rate of return post-retirement 9%
Real rate of return post-retirement 0.46%
Life expectancy 80
No. of yrs post-retirement 20
Retirement corpus required to fund post-retirement expenses Rs. 9,29,72,569

It is never too late to save for retirement. I want to change this and say – “It is never too early to save for retirement“.

The earlier you achieve the retirement corpus, the earlier you can retire. Retirement doesn’t mean you will stop working – but you can stop working for MONEY. May be you can work on something you are passionate about and could not pursue due to hectic corporate life.

 

Vinay Kumar Laxman

Certified Financial Planner

91-9538539049

Laxman.vinay77@gmail.com