Systematic Investment Plans (SIPs) are the magical way build wealth over the period of time with periodic investing of smaller amounts.
The components for ascertaining SIP amount are Target Amount, Expected returns and Time period in months or the number of monthly SIPs.
- The target amount should be decided based upon the goal. The Future Value of the goals (like Child education, Retirement, House or any other future need, etc) may be ascertained with the help of Goal Planning Calculator.
- The expected returns are based upon the asset class where the investments are made through SIP like Equities, Debt or balanced funds.
- The SIP may be done on Daily weekly or monthly basis. However, most of the investors opt for monthly mode as such the number of months till the goal period could be taken as time period.