Post on 23-Aug-2014
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Systematic Investment Plan (SIP)
SimpleMin Investment of only Rs.500
IntelligentBenefit from the Power of Compounding
PracticalLink to your Financial Goals
Did you know ?
If your current monthly expenses are
Rs. 30,000/- p.m, after 20 years you will
require Rs. 80,000/- p.m to maintain the
same lifestyle
Assuming inflation rate of 5%
Did you know ?
An education degree for your child
which currently costs Rs. 10 lakh will
cost Rs. 21 lakh after 15 years.
Assuming inflation rate of 5%
Individual Investor Needs: Investment Goals
• All individuals need to save for
- Retirement
- Child’s education / marriage
- Medical emergency
- Other family obligations
Every individual has one or more of the above goals
Individual Investor: Life Stages
Earnings
Consumption
Savings
22 27 40 60Young Independent Young Married Middle Age Retirement
All individuals have a finite period to save for their investment goals
Value of Money over time
Impact of inflation on monthlyexpenses of Rs. 30,000 today
79,599
62,368
38,28830,000
Today 5 years 15 years 20 years
Value of Rs. 100,000 over time
100,000
78,353
48,10237,689
Today 5 years 15 years 20 years
At inflation of 5%
Investors need to beat inflation
Performance of Various Asset ClassesCumulative annualised returns 1980-2004
15.6%
10.3% 8.9%
6.7% 5.7%
3.55%
-1.1%
Inflation Gold Bank FDs BSE Sensex
Growth Real Growth
Equities outperform other asset classes over the long term
Individual investors are scared of …..
The Downside Risk in Equities
The Risk of Market Volatility
The Risk of Market Timing
What else makes a material impact oninvestments in equity ?
Investing in the BSE Sensex - 25 yearsReturns are from 1981- Dec 2005
15.07%
Fixed investment athighest sensex value
every year
16.90%
Fixed investment atlowest sensex valueevery year
16.02%
Fixed investment on1st day of every month
Market timing does not matter over the long term
The Power of Compounding
Monthlyinvestment
Debt BSE Sensex BSE SensexInstrument Scenario A Scenario B
Rs. 5,000 Rs. 5,000 Rs. 5,000
Assumed 10% 15% 20%annualised return
Final corpus Rs. 43 lakh Rs. 89 lakh Rs. 1.9 crore
From Jan 1, 1984 to Dec 31, 2004 - a 21 year period
Summary
Investors needs to saveregularly and invest thosesavings in higher returnassets to create wealth
Long Term SystematicMonthly Investment in
equity schemes is idealfor this
How Do You Achieve Your Financial Goals
• Retirement
• Child’s education - international
• Family commitments - medical emergency, etc
Retirement Planning
Monthly Household ExpensesRetirement corpus required
83,579
30,000
Inflation 5%
21 Yrs
to meet post retirement expenses.(if invested at 7%)
1.4 crore
Monthly investment neededto meet post retirement expenses
at 12% 12,583
at 15% 8,083
Today At the timeof retirement
at 18% 5,090
Child’s Education
Educational Degree
34,20,000
20,00,000
Inflation 5%
11 Yrs
Monthly investment neededto achieve this goal
at 12% 12,456
at 15% 10,166
at 18% 8,237
When your childPresent actually goes
for this degree
Child’s Marriage
43,70,000Monthly investment needed
to achieve this goal
20,00,000 at 12% 7,509
at 15% 5,466
Present
Inflation 5%
16 Yrs
When marriageactually takes place
at 18% 3,925
So What Are The Benefits Of Investing Through
A Systematic Investment Plan !
Benefit : 1
• The Benefit of Long Term Equity Investment
- Equities give superior returns among all asset classes overthe long term
- Mutual Fund has a track record of consistent goodperformance relative to index.
Benefit : 2
• The Benefits of Systematic Monthly Investment
- Takes out the risk of market timing
- Adds the benefits of the power of compounding andrupee cost averaging
Benefit : 3
• Flexibility
- You can choose from a wide array of schemes
- You can decide to keep invested amounts in an earlierscheme & invest future SIP instalments into a new scheme
Benefit : 4
• Added Convenience
- Auto debit facility across major cities in India
- Regular account statements
- Redemption request directly credited into your bank account
Make your investment goals a reality
Start a S.I.P. today !
A Rupee Saved Is A Rupee EarnedA Long Journey Begins With A Small Step
For More InformationVisit http://www.rakshainvestment.com