How to decide the right amount to invest in a SIP?

 

If there is one route to accumulating wealth, it is through savings and investments. However, several individuals shy away from this because they do not want to lock away their liquidity. If this is you, a SIP scheme could be the way forward. A SIP allows you to benefit from the price increase in stocks and bonds through a systematic investing regime. You get the freedom to put your money bit by bit as you earn. 

Investing in a SIP scheme is now as simple as clicking a few buttons from the comfort of your home. However, deciding the amount one wants to put away in a SIP is a dilemma that most investors face. 

Let us look at how you can decide the amount when you invest in a SIP.

Define Your Goals

Different individuals have different financial goals. Some have a short-term goal of buying a car, while others have a long-term view of planning their children's education. 

When your goals are defined, you will know exactly how much you want in the end. You can work back from there to calculate your SIP instalments.

For instance, suppose you want to buy a car worth Rs 10 lakhs after four years. To be on the safer side, you can consider the annualized rate of return at 11%. It will give you an idea of the amount you will need to put into your SIP scheme. 

Combining Financial Goals

If you have multiple goals, you would want to start saving for each of them. Now that you know what a SIP is and how it works, it will become easier to do the math. However, the total amount of monthly investments can seem exorbitant. More so if you have just started earning.

In this situation, take a step back and ask yourself if your salary will be the same in the next 5-6 years. No, right. As your salary increases, it will become easier to increase your SIP amount without impacting your monthly expenses. You can top up your SIP or increase the amount when you feel you have more disposable income.

The idea is to start early to benefit from the power of compounding. Moreover, it will help in averaging out the cost due to the cyclical nature of the stock market.

Retirement Planning

Have you planned for most of your financial goals? Even in that case, you will still need to plan your finances. Think about your post-retirement life. You would want to enjoy at least the same standard of lifestyle that you have right now. To be able to do so, it is advisable to chart out a suitable financial strategy.

Financial experts suggest that every individual must save at least 30% of their monthly income for wealth creation. If you do not have an emergency fund, first start with that. Ensure that you have at least six months of your monthly salary in this fund to manage health emergencies or job loss.

Once you have done that, you can invest in equity mutual funds through SIPs. If putting all your money into one instrument makes you uncomfortable, you can consider diversifying your investments.

How to Select the Best SIP?

Now that you have figured out how much is good enough for you, it is time to pick the SIP scheme. You can look at the past performance of the scheme and see how it has delivered in market ups and downs. Secondly, it is advisable to use a reliable AMC to safeguard your interests.

The Final Word

SIP schemes allow investors an easy way to save and grow their money through mutual funds. Depending upon your risk appetite and financial goals, you can select a scheme that best fits your needs. The information shared above will help you determine the amount you should set aside for your safe and secure future. You can also use a SIP calculator for this purpose.

How safe it is to buy term insurance online?

 

When you purchase life insurance, you’re probably not thinking about the fact that you’re doing it online. But, as you’re about to see, there’s a reason why so many people tend to shy away from buying life insurance online. There’s a lot of uncertainty involved with buying life insurance online, and that’s because it’s not always the most secure way of getting a policy. In this article, we’ll discuss whether it’s safe to purchase term insurance plan online and how secure life insurance is in general. Read on to learn more.

What Is Life Insurance?

Life insurance is a type of insurance that protects you in the event of your death or the death of a loved one. It’s typically purchased by people who are looking to protect their assets, provide for their loved ones, and plan for their future expenses after they die.

Why Purchase Life Insurance Online?

While it might seem more convenient to purchase life insurance online, there are reasons why so many people opt to purchase a policy in-person. For one thing, the policies are more secure when they’re purchased in person. The person will have to sign off on the papers right then and there, and the agent will usually ask for some form of ID as well. Another reason why you might not want to buy life insurance online is because of cost.  You’ll often find that policies via an agent or broker cost less than if you were to purchase them online. Agents will typically be able to help you find a policy that best fits your needs as well. If you decide not to buy life insurance through an agent or broker, know that you run the risk of fraud and scams. This is because without someone else verifying your information and identity, it’s easy for people to take your money and run. You should always do your research before purchasing anything online, no matter what it is. If you find that buying life insurance online doesn’t work for you, don't worry! There are plenty of other options out there!

Is Life Insurance Purchased Online Safe?

It’s common for people to buy life insurance online because it’s easy and convenient. However, it’s not as safe as buying from a local agent or broker. There are many concerns when you buy life insurance online that don’t exist when you buy offline. One of the main concerns is protecting your personal information. You have to enter your Social Security number and other sensitive information, which means there’s a chance it could be stolen or compromised. Another concern is the coverage factor. Some policies will only cover $50,000 while others offer $2 million in coverage, so finding out what the company offers upfront is important before you purchase anything on the site. Lastly, there are cases where customers have found that their policy is no longer valid due to errors made by the website or even those who bought “term insurance” but never had a policy come through because the company was fraudulent.

Limitations of Buying Life Insurance Online

The first thing to think about when you’re thinking about buying life insurance online is that you will be limited in the amount of coverage. It’s not so much that the maximum coverage limit is lower, it’s just that you won’t have access to as many options for how long the policy will last. Additionally, if you are a smoker or a heavy drinker and are looking to buy life insurance online, be aware that your application may be denied. You may also be denied if your medical records show that you have certain diseases or conditions like HIV/AIDS or diabetes. This is because these factors increase the risk of death. Moreover, when you buy life insurance online, there’s no one to talk to in person about your situation and needs – which means you might not get the best deal possible. Even if this seems like it could be an easy process at first glance, there are some drawbacks associated with buying life insurance online.

Conclusion

Term insurance is a simple and affordable way to protect your family and your loved ones. Buying term life insurance online has its benefits, but you want to make sure you are fully aware of the risks before you buy. But if you are looking for an affordable way to get the protection you need, life insurance can be purchased online. Term life insurance is a simple and affordable way to protect your family and your loved ones. Buying term life insurance online has its benefits, but you want to make sure you are fully aware of the risks before you buy.