SIP is a Systematic Investment Plan – a proven method that will help you to create your huge wealth in a long term. The main benefit known from the SIP Investment is that, with the slow and steady steps you can build a big tree of wealth.
Doing SIP Investment is very easy, it means that you need to invest the little part of your income each month. Weather into stocks, mutual funds or any saving plan – the main thing is you NEED TO DO IT.
I have a quotation to explain the SIP method simply, in this way..
With each little drop of water an Ocean is formed.
Investing using SIP Investment in Mutual Funds or any other saving plan is quite easy, because you don’t need to do anything yourself. All you have to do is that just transfer the money to Mutual Fund Company.
The Drawback in investing through the Mutual Fund Companies is that you don’t know in which businesses the fund manager is investing your money.
How will you feel if you got to know that you can also create and manage your own portfolio using SIP Investment in stocks?
(This is what you will be going to learn in my next post, today we will only discuss how to do a SIP Investment in stocks.)
Minimum SIP Investment You Need To Do
The first thing you need to know is your Actual Income, Think about all your income sources and note down all the figures, after that calculate the 20% of your income, yes this the minimum amount you will be going to pay yourself first in the form of SIP Investment and then start making the SIP investment in stocks for the same amount.
Note: 20% is my recommendation, you can also start with the 10% but make sure you need to increase your investment by 10% every 6 months or every year to make your portfolio bigger and biggest in a very short span of time.
SIP Investment in Stocks In India
There are many great businesses in India those can provide you amazing returns in a long term, all you have to do is look for such companies and analyze them thoroughly.
But, if you are currently a beginner and don’t know how to analyze stocks and invest in it, then don’t worry there are still many instruments available for you in the stock market in India.
The very first thing you need to do a SIP Investment in Stocks In India is to open a Demat and Trading Account with your stockbroker, that’s because to invest in stocks you need that as all your stocks will be kept in your online demat account.
Now, let me explain what to do next, but fristly I will explain you using a simple scenerio to know how much money you should keep for SIP Investment in stocks at the start.
Ram is a 25 years old, college graduate and working in a very reknowned Bank grabbing monthly take home salary of Rs. 25,000. He is unmarried right now so can currently manage to take 20% of his monthly income for himself.
So, the 20% of Rs. 25,000 = Rs. 5,000 each month.
Now, he get’s is salary credited at the end of every month, the time he gets his salary credited to his bank account, he spends Rs. 5,000 very first on himself in the form of SIP Investment in stocks (which means, he transfers those Rs. 5,000 each month into his demat account with his stockbroker)
Now, the main thing comes up, What to BUY?
If you are a beginner and doesn’t know much about analyzing stocks right now, then you must start by Purchasing ETF’s also known as Exchange Traded Funds, In India there are many ETF’s available, mine two favorites are:
GOLDBEES (Goldman Sachs Gold Exchange Traded Scheme) this fund invests in the physical gold. It is listed on NSE in India, you can contact you stock broker to BUY GOLDBEES units into your demat account. For more info you can click here.
NIFTYBEES (Goldman Sachs Nifty Exchange Traded Scheme) this fund invests in the same securites that are in CNX Nifty Index. For more info you can click here.
Now start with investing in above ETF’s with the money you have kept aside for SIP Investment in stocks, after that you can also BUY any of the company stocks, but make sure don’t ever fall in any hot stock, hot tip, cool recommendation and all such things.
I will explain you few basis points to pick good stocks in my upcoming posts, so stay tuned and subscribe to my newsletter if you don’t want to miss any updates.
Hi, I’am Managing Director at Gurpreet Saluja Financial Services where I help my investors choose right investment avenue to achieve their financial goals. I’m also a Value Investor and here I Write about Finance & Investing.