Greetings, First of all ! In today’s era, Everybody might have heard the word SIP, but most people got confused. When they are asked, “What is SIP ?”
Sometimes, Bankers (people working in banks as well) find it difficult to tell the difference between the mutual funds and SIP. And they presume these two as same because they are forced to sell target number of SIPs to complete their monthly goals.
Banks are place where most of mis-selling happens (Mis-selling basically means selling something to someone knowingly that it is not what the client/customer is demanding). Ex- Selling AT-1 Bonds to customers who ask for Govt Bonds, People believe on Banks and just take that product without knowing the risks involved into it.
And they simply include mutual funds and suppose that they know the term very well. But actually that’s very wrong.
“To know that we know what we know, and to know that we do not know what we do not know, that is true knowledge.” — Nicolaus Copernicus
What is SIP, then ?
Let’s start with full form of SIP, That is Systematic Investment Plan. It basically means making a plan/goal and then to achieve that plan/goal we start deposting some amount automatically . So, that deducted amount is SIP. Please keep it mind that we can invest that money anywhere (any instrument of investing), not necessarily mutual funds.
Types of SIP :-
Basically, the following are some of the types:-
- Simple SIP
- Top SIP / Step UP SIP
- Flexi SIP
- Perpetual SIP
- Trigger SIP
- and waiting for Next innovation.
Why there is so much hype around SIP ?
Earlier, as well, you were doing an SIP but you were unaware that you are doing SIP now you are made aware to do that in Mutual Funds whether you need one or not, because they have certain risks in certain categories which an expert can understand after doing your risk analysis.
Conclusion:-
SIPs are building blocks of our Investing Journey and should be done. but How much to do is calculated totlly depends on individuals’ goals and life-style he or she wants. Remember that the key to financial success is patience, discipline, and continuous learning. Do not hesitate to meet an expert who can help you provide a proper asset allocation, meet an expert, in case you think you need one.
Let’s know in the comment section, if you need to clarify your doubts, Further you can contact us by visiting our ABOUT US page in MAIN MENU. Or Simply chat us by clicking on whatsapp icon given below.
#Happy Investing
From meriSIP.com team
