Invest and Plan Your Childrens Future With A Systematic Investment Plan

Every parent wants to give their kids a secure and comfortable life. Not only that, they also make an effort to safeguard their kids’ comfort and safety in the future. Starting to save early is essential in a society where costs, like the expenses of school, college and higher education, are rising rapidly.

A systematic investment plan is becoming an increasingly popular instrument of independence that assists you in disciplined investing by making small monthly investments in a mutual fund over time.

What is an SIP?
One of the finest ways to invest your money is through SIPs. A Systematic Investment Plan is a straightforward method of buying equities or mutual funds. You begin by contributing consistently to an investment account, which is then used to buy shares of stock or mutual funds according to a predetermined timetable.

Using an SIP, you could have money automatically deducted from your accounts and invested in the mutual fund of your choice. In this method of investing, the power of compounding becomes apparent over time.

Advantages of SIPs
Inculcates Investment Discipline
The money needed for your child's education could aid in fighting inflation, and what better way to do this than with SIP investment based on your mandate being directly deducted from your bank account? As a result, you would no longer have to worry about making payments or the possibility of defaulting.

Rupee Cost Averaging
The rupee cost averaging technique meant to protect your investment is one of the essential features of mutual funds SIP. No matter the changes, the factor shields your investment from market turbulence and secures the best assets. As a result, you profit the most when stock prices are at their lowest and the least when they are at their highest. Due to this, despite the price difference, your investment averages out.

Power of Compounding
Reinvesting your gains enables you to benefit from larger returns. The larger your compounding returns are, the longer your tenure will be. However, starting the SIP as soon as possible is wise in order to benefit from the power of compounding, which is essential for building long-term wealth. In other words, you are ensuring a bright future for your child.

Market Timing
Your wealth and health could be at risk if you try to time the market. Consider 'time in the market' instead as you work to build money by choosing the best mutual fund investment plans.

If stocks are such risky investments, why are so many investors unhappy, one could ask. They either choose the wrong stock/mutual fund, or an incorrect timing, which explains the situation.

These difficulties could be overcome by making long-term investments through SIPs in mutual fund scheme with a solid track record. And if you are concerned about market volatility, SIPs could help manage such volatility and even prove successful, especially when markets are at high levels.

How does the power of compounding work?
Investing in higher education from a reputable learning institution costs a lot. As a parent, you should consider that paying for education ten years hence, would undeniably be more expensive.

Therefore, you can always choose investments in mutual funds or SIPs rather than relying on conventional investment solutions, such as FDs. SIPs have a strong tendency to compound your initial investment significantly. Your strategies should be such that your child will have plenty of resources in the future even without further provision. So, regardless of your child's aspirations, selecting Systematic Investment Plans (SIPs) is the one of the most cost-effective and exceptional alternative for you.

Choose a SIP to plan a better education for your child and take advantage of benefits like compounding to establish an education corpus more quickly.

How do SIPs work?
The expense of schooling grew annually between 2008 and 2014, as per an Economic Times report that cited an NSSO (National Sample Survey Organization) study. However, throughout the same period, the per capita income only increased by 2.49 times, leaving a gaping disparity between income and expense.

Future projections show that the trend will persist, forcing the development of a saving philosophy to combat the rising cost of higher education. The ideal option is to start a systematic investment plan (SIP) in mutual funds as soon as possible to maximise the benefits of compounding.

Understanding how the SIP grows over time into a sizable corpus is crucial. Start a SIP for as little as Rs. 500, then make your plans. However, everything is based on the goals you set for your child's future education. Consequently, an example will show how regular investment gradually builds wealth.

The above is for illustration purpose only. The SIP amount, tenure of SIP, expected rate of return are assumed figures for the purpose of explaining the concept of advantages of SIP investments. The actual result may vary from depicted results depending on scheme selected. It should not be construed to be indicative of scheme performance in any manner. Past performance may or may not be sustained in future.

The power of compounding allows a small monthly SIP amount to grow over time into a sizeable corpus. You also gain from the idea of rupee cost averaging with SIPs. As you make a monthly investment, your purchase cost will eventually average out. As a result, you could make investments without attempting to time the market.

Conclusion
One of your biggest financial obligations as a parent is to provide for your child's future. Therefore, starting your investments as soon as possible is usually advisable to save and amass sufficient funds. This may guarantee that you have enough time on your hands and that your investment won't interfere with your ongoing expenses.

Views and opinions contained herein are for information purposes only and should not be construed as investment advice/ recommendation to any party or solicitation to buy, sale or hold any security or to adopt any investment strategy. It does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The recipient should exercise due caution and/ or seek professional advice before making any decision or entering into any financial obligation based on information, statement or opinion which is expressed herein.
Statutory Details:Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.