Financial Planning – Page 8

October 15, 2021

5 Key financial lessons to learn from Dussehra

Dussehra is celebrated to honor the victory of good over evil with much pomp and fervor. While Dussehra is a time when eternal hope rises in the good that exists in humanity,

it also brings with itself some important lessons you can implement to your financial plans to have a better grip on your finances and plan for a better future. Read 5 Key financial lessons to learn from Dussehra here;

Destroy the evils on your wealth creation journey

The festival of Dussehra marks the victory of good over evil. During the Lanka war, Lord Rama and his army encountered various hardships to attain victory. Looking at the festival from a finance and investment perspective; the festival offers the vital lesson of ridding away all the causes that pose as a hurdle on our financial planning and wealth creation journey. Surmounting credit card debts, reckless expenditure, timing the market, booking losses amongst many other hurdles are the real enemies on our wealth creation journey.

Live a disciplined life

The advocacy of ‘Dharma’ or righteousness by Lord Rama emphasized the significance of being upright, responsible, and disciplined in life. While in exile or during the Lanka war, Lord Rama did not deter living a life of frugality. You too can learn to live in less than what you earn. By saving wisely, spending cautiously, and investing smartly; you can apply financial discipline to cater to your current and future needs as well as your family’s needs. One way of inculcating and nurturing financial discipline within you is by firmly following a financial plan, avoiding binge-spending at all costs, and investing in a regular pattern; possibly in Mutual Funds via Systematic Investment Plan (SIP).

Lead a life of patience and perseverance

When Lord Rama along with Lakshmana and Sita were exiled to the woods for 14 years and was asked to live a simple life as opposed to the luxurious lifestyle of the royal palace; he accepted his fate and maintained composure. When Ravana abducted Sita and the Lanka war broke out; Lord Rama fought the war with patience and perseverance and never thought of giving up or looking for shortcuts. These two incidents in the Ramayana signify the importance of being patient and perseverant in the hardest of times. In your life too, you may face financial hardships or you may find it difficult to avoid unnecessary expenditure. As an investor, you may get impatient while watching your money grow or market ups and downs can test your patience to its extreme forcing you to quit investing any further and derail you from achieving your financial goals. Irrespective of the above-mentioned incidents; you must be patient and perseverant at all times.

Protecting your finances

The festival of Dussehra symbolizes the faith in defeating all forms of evil to protect humanity on Earth. By protecting or securing your finances, the message is to create a financially sound future and shun all evils that affect your financial wellbeing. You could protect your hard-earned money from going to waste by putting it to good use; in the form of investments or insurance plans. Also, maintaining a contingency fund that helps battle your emergency needs can prevent you from using up your savings or taking loans.

Cheers to new beginnings

The Lanka war of 14 days marked the defeat of evil and paved the way to newer paths. Upon returning to Ayodhya with Lakshamana and Sita, Lord Rama was crowned as the King of Ayodhya, and Vibhishana was crowned as the new king of Lanka. The events during the Lanka war and the subsequent victory of Lord Rama brought a new lease of life by starting afresh. Taking a cue from this; it’s never too late to tread on a path of financial freedom. You can start by chalking out a financial plan that suits you the best. If you wish to achieve your financial goals, you can always invest in a Mutual Fund scheme that is aligned with your financial goals and matches your risk appetite.

Source: Mtilal Oswal

October 12, 2021

How to Invest at A MARKET HIGH

It is that point of the year…the stock market is at its all-time high. All this while you waited for this opportune moment to begin investing. But wait! Don’t lose yourself in the exuberance all around. You never know where the market is heading the next moment.

The questions remain unanswered:

* Is the market going to rise further or is it going to fall?
* Should you be a skeptic and wait for a correction or cheer up and invest right away?

Waiting for a market correction to start investing would result in a loss of opportunity. This is exactly why you should get going immediately. If you keep waiting for a market correction, you will stay stuck. This is why you should invest, even at a market high, as the markets are only going to go higher. Sure, there will be a few hiccups on the way, but the general market trajectory is going to be largely upward-looking.

In case you are a novice investor, this time demands higher levels of composure from your end. Instead of placing impulsive bets and repenting later, sit down and formulate an investment strategy.

Review the entire portfolio

When you initially constructed a portfolio at the beginning of the cycle, markets must have been quite different. Now that so much time has elapsed in between, chances are the valuations might have changed.

The reasons which made you buy that bunch of stocks might no longer be existing. The market leaders might have changed ranks. In such a situation, sticking to laggards might end you in losses. So, use this time to review your entire portfolio. Weed out the stocks which don’t seem valuable anymore.

Re-balance the portfolio

You need to know that market volatility affects your portfolio’s asset allocation. Your original asset allocation might have been in a ratio of say 50:50 (equity: debt). But the steadily rising markets might have skewed the original allocations.

It means that now the ratio must have become say 70:30 (equity: debt). On one hand, it may seem like a lucrative opportunity to accumulate more wealth. But if it is not in line with your risk preferences, you may land in trouble.

You got it right! Your portfolio has now become riskier than you actually can digest. If you don’t want to carry a riskier portfolio, then it is better to re-balance it. Re-balancing involves bringing the skewed allocation to its original asset allocation of say 50:50 in this case.

Diversify your portfolio

Your portfolio might be composed only of small-cap or mid-cap stocks. In a rising market, a concentrated portfolio might increase your chances of losing money. When markets are high, you need to diversify. In diversification, you need to include stocks of different market capitalization. You can invest in large-cap stocks which tend to be stable during such volatility.

Start SIP in mutual funds

For first-time investors, trading in the stock market can be tricky. If that is not your ball game, then go for equity mutual funds. Equity mutual funds give a similar kind of investment experience; although with greater diversification and professional fund management.

You may think of starting a Systematic Investment Plan (SIP) in equity funds. In this, you will be consistently placing smaller bets. Over a period, it will give you the advantage of rupee-cost averaging.

Never invest in something you don’t understand

One mistake you shouldn’t commit is investing in a complicated financial product. Market highs are usually accompanied by fund houses launching sophisticated offerings. You might come across a lot of New Fund Offer (NFO) during this time.

These offerings might promise sky-high returns. However, you shouldn’t get enticed by the lucre, especially when the product offering is not transparent. Ensure that you understand what you are getting into before investing.

Moreover, invest in a financial product that has an investment history of 5 to 10 years. Even if you want to take the risk, don’t invest a lump sum in a single stock or fund.

Goal-based investing

Mapping specific mutual funds to specific goals will help you not only choose mutual funds correctly but also keep track of them in a better way. You can choose mutual funds depending upon the term and the risk profile of the goal.

All said and done, market highs and market lows will come and go. The volatility shouldn’t bother long-term investors. You should keep an eye on your goals and invest systematically.

Source: ClearTax

August 20, 2021

Arbitrage Funds vs Liquid Funds, Which fund suits you best?

While choosing the right investment option most suited to meet your short-term investment need most of you tend to invest in Bank FD or savings account.

However, there are other short-term investment avenues that you can and should explore for your short-term investments. Arbitrage funds and liquid funds are two such investment options that can be considered to meet your short-term investment needs.

Arbitrage funds

These are mutual fund schemes that leverage the price differences in two different markets and thereby earn profits. As arbitrage funds are involved in simultaneous buying and selling of shares and making profits from market inefficiencies, they are considered to be low-risk investments and a safe option to park funds.

The returns generated by these funds depend on the volatility of the underlying asset. As these funds primarily invest in equities, they are categorized as equity mutual funds and taxed like any other equity mutual fund.

Liquid funds

Liquid funds, on the other hand, are open-ended debt schemes, that invest money in debt instruments such as treasury bills, commercial papers, certificates of deposits, and even term deposits, etc. Liquid funds are extremely liquid and have no exit load. The redemptions are processed within 24 hours.

Which fund to choose- Arbitrage Fund or Liquid Fund?

Arbitrage funds gained a lot of popularity after the Union Budget of 2014 when the minimum holding time for long-term capital gains on all debt investments was increased from 1 year to 3 years and long-term tax on equities was nil.

However, now under the new budget, even gains from arbitrage funds would be taxed; 10% if sold after a year and 15% if the holding period is less than a year.

While both arbitrage funds and liquid funds are low-risk, low-return types of investments, there are few things you must compare and choose the investment option most suited to meet your needs.

Time Horizon of Investment

One of the most important things to consider before choosing between the two is the time horizon for which you are looking to invest. If you are looking to invest for a few days or weeks, then you should invest in liquid funds.

Returns from arbitrage funds are dependent on arbitrage opportunities available, which are few.

Thus, for such a short time you may not be able to generate any returns from such funds and hence more suited for investors who are looking to invest for at least 3 months or more.

Tax efficiency

Before you choose to invest in either of the two options, understand the tax implications on your returns. Short-term capital gains on arbitrage funds are taxed at a flat rate of 15% and those from liquid funds are clubbed with your total taxable income and taxed as per your income tax slab.

Thus, the tax efficiency of the investment will primarily depend upon the tax bracket that you fall under. For low-income investors, liquid funds are more tax-efficient as compared to investors in the highest tax bracket.

Similarly, arbitrage funds are more tax-efficient than liquid funds for investors who are in the tax brackets of 20% and above as the short-term capital gains tax is 15% which is lower.

Liquidity of investment

Liquid funds score over arbitrage funds when it comes to liquidity. Redemptions in liquid funds are processed within 24 working hours but in the case of arbitrage funds, the redemption is made within 3 to 5 working days.

Returns

The returns generated by arbitrage funds are slightly higher than liquid funds, especially in volatile market conditions when ample arbitrage opportunities exist.

Exit Charges

The exit charges in case of liquid funds are nil, but there is usually a pre-mature withdrawal charge in arbitrage funds if the withdrawals are in the first few months.

Risk

Liquid funds and arbitrage funds are both low-risk investment options but arbitrage funds are slightly more risky than liquid funds.

While returns on liquid funds are similar to those of bank FDs, returns in the case of arbitrage funds are dependent on the arbitrage opportunities available in the market, which are erratic.

Conclusion

The choice of investment most suited for you will depend on your investment objective. Ideally, investors looking to invest for 6 months or more, especially those in the highest tax bracket should opt for arbitrage funds for better returns and higher tax efficiency

And those investors looking to invest for a shorter time frame or those in lower-income brackets can look at investing in liquid funds to make the most from their investment.

August 3, 2021

Benefits and Risks of International Equity

International investing has become vital for our portfolios as we take part in the global growth story.

Adding international stocks to a portfolio offers diversification and may provide higher returns. However, there are both benefits and risks associated with global investing.

Benefits of International Equity

a. Diversification

Diversification is the most obvious yet the most crucial benefit of global investing. A diversified portfolio acts as a source of stability during market volatility.

When you spread out your investments across geographies, there is a low correlation between them. This means that the volatility in one market is likely not to affect your other assets.

Many of the US-listed companies have global revenues. Over 40% of the revenues of the S&P500 companies come from outside the US. By investing in the US itself, you can build a globally diversified portfolio.

b. Wide range of investment options

Global investing enables you to access investment opportunities that are not present domestically. Developed markets like the US are home to some of the world’s largest tech companies – something you cannot access by investing in India.

You may even choose a theme or a combination of multiple sectors. For example, you can prefer the US market for technology, Europe for engineering, and Australia for commodities.

If you are interested in healthcare or pharmaceuticals, there are several options in the US and Europe.

You can access multiple geographies through ETFs. For example, you can invest in German equities through the US-listed EWG ETF or in the Brazilian market through the EWZ ETF.

c. Investment Protection

Another significant benefit of global investing is the protection of investments against fraud and liquidations.

Developed market companies generally have strong regulations that ensure sound corporate governance and severe penalties for market abuse. This protects retail investors from potential scams and insider trading losses.

Remember, capital is always at risk, but many foreign financial institutions, offer protection from seizures and other threats such as liquidation of the broker-dealer. For instance, in the US, SIPC protects investments up to $500,000 if your broker-dealer faces liquidation.

d. Currency Diversification

Investing overseas exposes you to currency appreciation (or depreciation). For example, the USD has been appreciating, on average, between 3-5 percent versus the INR over the last few years.

Emerging markets’ currencies depreciate over the longer term. Interest rates in domestic savings accounts are at a low of 3-4 percent on average.

By investing globally, portfolios have generally had the dual benefit of better markets and appreciating currencies.

Risks of International Equity

a. Higher Transaction Costs

The most significant barrier to investing in global markets is the added transaction cost, which varies depending on the foreign market you want to invest in. For the US markets, for many other markets, access may not be as inexpensive.

There may be additional costs like FX conversion charges, transfer fees, and annual maintenance fees that you should know on top of the brokerage commissions.

b. Currency Volatility

When investing directly in foreign markets, you first have to convert your Indian rupees into a foreign currency at the current exchange rate. Let’s assume you own a foreign stock for a year and then sell it.

You then convert the foreign currency back into the Indian rupee. That could help or hurt your return, depending on which way the domestic currency is moving.

c. Political Risk

While investing, you should also consider the geopolitical environment of the country. Political events affect the domestic markets of the country and may lead to volatility.

In developing markets, government and policy decisions could hurt even the most prominent companies. We have seen this frequently in countries like Brazil and Argentina.

Conclusion

International investing has become the need of the hour to achieve strong portfolio diversification. While the benefits are lucrative, you must pay attention to the risks as well. There is a lot of information available online to measure the risks and ensure your portfolio’s right mix.

Source:- Winvesta

July 20, 2021

Why do you need an investment manager?

It’s a common question among investors who don’t have an investment manager: Why would I pay someone to manage my money? Can’t I do that myself with a cheap, online brokerage platform?

The answer of course is ‘yes, you can manage your own money on any number of brokerage sites.

However, as a professional financial planner and investment manager, I’ve noticed at least 3 reasons why you may want to consider hiring a professional to come alongside and help you with such an important responsibility.

And they may not be the reasons you think.

3 Reasons to Consider Hiring a Professional

First, your investment advisor will help you to continuously and quickly invest cash in your investment accounts.

One of the most common issues with do-it-yourself investing is thinking you can time the market with your cash. Over and over, I encounter clients who have been sitting on cash (to varying degrees) in retirement investment accounts.

Remember, you can’t even get at this money until you are 60 years old. Also remember, if you are 60 years old, you likely have a 30-40 year retirement on the horizon. Compound interest only works when you let it work.

That means keeping your cash invested continuously and quickly and a financial advisor will help you do this.

1. When do things always go according to plan?

Second, an investment advisor will help you stay accountable to the savings and investing goals you set for yourself.

When you are going it alone, it’s easy to make excuses, blow past personal finance deadlines, and feel like you are doing alright when you have one too many blind spots. A great financial advisor will help you stick to your investment plan.

But when things don’t go according to plan, your advisor will help you course-correct and make appropriate changes.

And let’s be honest, when do things always go according to plan? Helping you make adjustments and not simply ignore important financial decisions is what your advisor is there to help walk you through.

2. Making progress, moving forward

Next, your advisor should make you a person of action! With financial decisions, it’s far too easy to push a final decision to the background.

Even once you’ve made a final decision, executing that decision can take weeks, or, more likely, months.

Your advisor not only helps you make the decisions but helps you execute the decision promptly.

Whether you need to re-balance your portfolio, make an allocation change, or review your fund expenses, your advisor helps the action happen.

Put simply, your advisor helps keep you moving forward!

3. Do you have a thinking partner?

Third, your advisor should be your thinking partner when it comes to adding or deleting investments from your portfolio.

Every investor faces decisions from time to time on whether to change a certain investment fund in their portfolio.

How do you know when is the right time to make a change? What is your decision framework for making big investment changes? What is the tax impact of the decision? For most investors, the framework is largely emotional.

Your advisor should be your thinking partner when it comes to investment changes.

A fiduciary financial advisor will be able to help put investment decisions into proper context and bring the decision back to you and your financial plan rather than your emotional opinion of the investment.

July 16, 2021

5 Best Financial Rules to Secure Your Future

1. Create Spending Priorities

By now, you should have a good idea of what you value in life, and what kind of lifestyle you want to lead.

This means that it’s time to stop spending on stuff that isn’t important to you. Do you know how much crap I bought in my 20’s that was a complete waste of money? Too much.

Sit down, think about what you want to accomplish with your money, and then create a list of spending priorities that work for you. Then, spend according to those priorities.

Your spending will be more in line with your values, and you’ll be happier as a result.

If you have a spouse, this involves them, too. My wife and I are constantly talking about what are the important things we want to spend our money on.

In our 30’s the constant topics revolved around upgrades to our home, travel, investing in our businesses, and our kids – three growing boys add up!

2. Buy Health Insurance

Now that you’re getting older, you need to think about health insurance. Even if you live a healthy lifestyle, there are reasons to have health insurance.

If you have kids, you need health insurance. If you can afford a high deductible plan, it can make sense (if you have relatively few health care needs and costs) to purchase one.

You can then put money into a Health Savings Account, earning you a tax deduction and allowing the money to grow tax-free as long as you use it for qualified expenses.

3. Create a Retirement Plan

Many people in their 30s have yet to perform a retirement calculation. Now is the time for you to perform that calculation.

Use one of the many online calculators to figure out what you need in retirement, and what you need to do now to meet your goals later.

Get serious about what you want to do in retirement and make a plan.

4. Diversify Your Income

Now that you’re in your 30s and things have settled down a bit, it’s a good time to consider income diversity.

Don’t rely on your day job for your entire financial well-being. That’s just asking for trouble.

I’ve been able to diversify my income by starting this blog and other online ventures to complement my revenue from my financial planning practice.

Try to cultivate income diversity with side gigs, investments, and other endeavors. That way, your entire family’s financial future isn’t at risk if you’re fired from your job.

5. Get Financial Planning Help

As your finances become more complex, there is a good chance that you will need help working through the ins and outs.

Whether you need help with tax planning (I love my accountant), plotting a retirement course, or figuring out what insurance policy is best for you, consider working with a financial planner that has no conflicts of interest.

Unfortunately, most people assume financial planning services are reserved for individuals with very high net-worths. For a long time, that has been the case.

But, a relatively new company that is bridging the gap between this very helpful financial service and the younger generation (who typically don’t have millions of dollars of assets) is Facet Wealth.

July 9, 2021

4 Financial decisions you should make today before turning 30

Before turning 30, you should make certain financial decisions as early as possible for a stress-free future where financial contingencies are a far cry.

So what are those decisions? Here’s a list of 4 basic decisions that are almost universally applicable, so let’s take a look.

1. Ensure Yourself – There is no specific age for taking out an insurance policy and the earlier you start the better.

By the age of 30, you are probably one of the contributors to the family income if you are in the joint family system or the main breadwinner in your nuclear family.

Even though your spouse earns, there will be financial loss in case of any unfortunate event. Insuring is always the best answer for income protection and buying a term plan with considerable coverage is also affordable.

2. Plan for Retirement – Retirement is the last thing you think of when you just hit the 30-year age mark. The whole life ahead seems too short to accomplish all you desire and the thought of retirement leaves a sour taste in the mouth.

But planning early is the key to a comfortable retired life. Post 40 when the majority of people plan for their retirement, the accumulated corpus falls short because of other liabilities.

So open a PPF Account and start saving a little amount every month. Let compounding do its magic and you won’t have to worry about your retirement corpus.

3. Health is Wealth – Moving on from life insurance, can health insurance be left far behind? In the year 2012, the insurance sector reported a surge in insurance claims to 47% as compared to 15.8% in 2004 and that too in the age group of 26-35 years.

Yes, though you are turning 30, the modern lifestyle has given rise to newer diseases that do not consider age while attacking the individual. So don’t be foolish and invest in a health plan probably a family floater one to cover the entire family.

If affordability is a factor, you can start low and then add a top-up plan with your base plan for complete protection.

4) Buy a SIP (Systematic Investment Plan) – Mutual funds have become attractive with the diversification they provide and with a positive trend observed in the stock market, investing in a SIP of any good performing mutual fund house is the next best decision you should make.

Starting early gives the benefit of compounding returns where the money grows exponentially over the years.

So when you need funds for your child’s future or for buying a house or for that much-awaited Europe trip, you won’t have to look anywhere else.

Investing in multiple SIPs is ideal taking into account the quantum of savings.

July 2, 2021

4 key characteristics of a good investor

An average investor uses his money and invests the rest; a good investor invests his money and uses the rest. Investing is a risk vs. returns game.

While some have made millions, many have lost as well. Learn the key characteristics of a good investor to become one.

Goal setting

A good investor will always have a clear goal. It is very important to have a plan to achieve the goals. Variations most likely tend to divert an investor from the agenda.

Having a plan of action within a defined period for a particular return on investment is a sign of a good investor.

They are prepared for the uncertainty of the market while the plans are usually made considering both the sides

Patience

Over some time a good investor creates wealth due to his patience. It is probably the finest quality to have. A good investor has faith in his plans.

They usually do not feel bad about the 10% downtick; they would rather sit tight to celebrate the 100% uptick.

They are persistent about sticking to the plans. They usually do not get into the buy and sell trends.

Knowledge

Besides utilizing time to the best, a good investor possesses knowledge of the market. He/she understands the position of funds and has researched the company’s investment strategy and philosophy.

You need to know where your money is being utilized. A good investor analyses the growth pattern of the company over the years from genuine sources.

On the accounts of the anticipations and knowledge, a good investor will have a defined plan for exit point as well.

An active learner who is open to making the right choice based on the genuinity of knowledge is a good investor.

Right Decision
A good investor knows the time. They keep an eye on the current scenario in the market. They update their knowledge about market activities and growth.

Having a sound understanding of trends enables the investors to overlook their plans and decide the term of the investment.

Having an understanding of current trends and company market position makes one a good investor. They own their mistakes and learn not to make them again.

The good investor doesn’t need to jump into the trends; he/she just does what is right.

June 18, 2021

7 Alarming Things You Must Know Before Hiring A Financial Planner

A Financial Advisor is also your wealth guardian. A financial advisor takes care of his clients as a Family Doctor.

He looks holistically at your financial portfolio & also advises the clients even when he isn’t handling them directly.

1. Do you Google the medicine when you are ill?

Magic is not in medicine. The right dose of Medicine at the Right Time with the Right Combination & Right Precaution will give you a magical recovery.

Only a skilled & experienced advisor will be able to do the magic to your financial health.

You must know the work experience & certifications of the financial advisor before hiring.

2. Would you go to a doctor whose clinic is always empty?

Finding out the size of an advisor’s client base can tell you a lot about what kind of service you can expect to receive.

Don’t forget to ask for the advisor’s client base and top clients.

3. Do you visit a Multispecialty Hospital or a local doctor for a health check-up?

You need to know the infrastructure setup of the advisor. It is also advisable to visit the advisor’s office before hiring him

4. A Part-time nurse or a Practicing Doctor?

Feel free to ask whether the financial advisor is a part-time practitioner or a full-time Financial Planner.

It can be dangerous working with part-timers as they work only for their own benefit.

5. How about a medical emergency and your Doctor is on holiday abroad?

It’s very important to know the team members and ways to reach the advisor.

It can be quite difficult for you if your advisor is unavailable while he is traveling or ill.

6. Technologically updated Doctor or old-style Practitioner?

It is equally important for you to know if your advisor is technologically updated or not. Bundles of documents and several signatures: not a good idea.

Ask for the website address, link to Mobile Application, and paperless transaction facility.

7.Would you enjoy Health check-up, Medicines & Doctor consultations at different places?

Ask for the product basket offered by the advisor. Your life will be at ease if your advisor can sort all your financial needs.

Before you hire a financial advisor, it’s crucial to understand how they work.

Will they put your best interests first, or will they serve themselves? And will they create a tailored list of recommendations, or throw a generic list of brochures at you during your first meeting?

April 16, 2021

Why You Should Increase Your SIP Every Year

Many investors think of SIPs and mutual fund schemes as synonyms, however, that is not the case.

SIPs are merely tools that allow you to invest in a mutual fund scheme over some time.

It can be monthly, quarterly, or semi-annually depending on your financial goals.

It acts as a convenient option for salaried individuals to regularly invest in mutual funds.

The money can get deducted from their account automatically thereby engraining a financial discipline.

How to Start SIP Investment?

You can start a SIP with a minimum amount of Rs. 500. Here is how to start a SIP

investment if you wish to buy mutual funds.

• Basic Information
The first step of SIP investment requires you to provide all your basic personal information in an online form such as your name, date of birth, address, mobile number, etc.

• Aadhar Based eKYC
The above procedure for SIP investment can be simplified if you have an Aadhar card. You have to enter your Aadhar number and authenticate it with a One-Time Password (OTP).

This will pre-populate the online form with all your basic information details available in the UIDAI database.

IPV through a video call is not required if you complete the eKYC procedure through Aadhar as the UIDAI database already has your biometric information.

However, there is a statutory limit that will not allow you to invest more than Rs. 50,000 per fund house in a financial year if PAN card details are not submitted by you.

You can submit your PAN card and enhance this limit.

• Upload Documents
In the next step, you are required to upload a scanned copy of your PAN card and address proof.

Benefits of Increasing Your SIP Investment Every Year

Here are some advantages of increasing your SIP every year.

• Counters Inflation
While investing, the return adjusted for inflation is a significant factor to be considered.

As inflation increases every year, the amount you find substantial today may not have the same worth some years down the line.

Hence, if you do not increase your SIP investment amount every year, you ignore inflation which erodes the purchasing power of your hard-earned money.

• Builds A Bigger Corpus
When your income and surplus increase every year, it makes sense to increase your SIP investment too.

It adds to the power of compounding and helps accumulate greater wealth by building a bigger corpus. Even a small 5% to 20% increase in the SIP investment plan at the end of 10, 15, or 20 years can make a big difference.

Also, you can avoid increased documentation as it will reduce the necessity of creating and tracking multiple stocks.