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					                               SIP


         Systematic Investment Plan
      (Simplest Solution to Wealth Creation)




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             FINANCIAL PLANNING FOR THE FUTURE

   Income     Phase I                 Phase II                        Phase III

                                   Children’s Marriage

                                  Child Education                   Do You Want To
                                                                  Compromise On Your
                                                                  Living Standard After
                                 Housing
                                                                   Your Retirement ?


                                      Children
                                 Marriage

            22 yrs                         38 yrs

      Birth & Education            Earning Years                    Retirement     Age

                        22 yrs                           60 yrs


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        Savings of Rs 100000 will minify year after year,
                          due to ….




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            MEANS TO ACHIEVE GOALS

          A SIMPLE SOLUTION TO WEALTH CREATION


                              INVEST EARLY
                                    +
                 INVEST REGULARLY (DISCIPLINED SAVINGS)
                                    +
                  INVEST CORRECTLY (RIGHT ASSET CLASS )
                                    =
                            WEALTH CREATION




         “SUCCESS COMES SIMPLY BY DOING SIMPLE THINGS…”



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                      COMMON FEARS




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                EXCUSES AND JUSTIFICATIONS
• I do not have enough money to invest.
Ans : Minimum Amount require for SIP is as low as Rs 500

• I am too busy making money to worry about managing it.
Ans : Fund Manager of any respective SIP mutual fund scheme
  will manage your money .

• I do not have the time
Ans :Auto Debit System for paying the installments will save your
  money and energy.

• I don’t have expertise to follow market movements and make
  investments at the right time.
Ans: There is no need to time the market.

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                               SIP SYNOPSIS

SIP is an investment program that allows you to contribute a fixed
  amount in mutual funds at regular intervals .
• Invest a fixed sum every month. (6 months to perpetual -
  through post-dated cheques or Direct Debit facilities) .
• Fewer units when the share prices are high, and more units
  when the share prices are low. Average cost price tends to fall
  below the --average NAV .

Merits of SIP –
 Discipline Investor (Think of each SIP payment as laying a
  brick. One by one, you’ll see them transform into a building.
  You’ll see your investments accrue month after month)
 Power of Compounding
 Rupee Cost Averaging
 Hassle Free
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                 BENEFITS OF EARLY INVESTING



                                          JAMES




                                           BOND



                                        JAMES          BOND
Starting Age                           25 years        40 years
Monthly SIP                            Rs.5,000/      Rs.15,000/
Saving Years till Age 60               35 years        20 years
Total Amount Invested                  Rs.22 lacs     Rs.36 lacs
Wealth at Age 60 years                Rs.26 crores   Rs4.80crores
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       WHY ASSET ALLOCATION IS IMPORTANT




          200000000

          150000000

          100000000

           50000000


                              24         20          15          6
  Amount after 30 years   186984169   68933513   20769838   3013545




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• Systematic Investment plan (S.I.P) of Rs 3000 per month
  invested for 30 years and compounding at 24% annually will
  grow to Rs 18.69crores

• The same amount invested at 20% annually will grow to Rs
  6.89 crores.

• Now if the return is changed to a conservative 15% the
  amount would be Rs 2.07 crores.

• The same amount invested in a Bank at 6 % per annum will
  grow to a paltry Rs 30.13 lacs. You actually destroy wealth by
  putting money into Bank and post office deposits.




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                 POWER OF COMPOUNDING


 Preeti started investing at the age of 25. She invested
  Rs.10,000 each year for 35 years and then she stopped
  contributing.

 Rohit started investing at the of age 35 and then invested
  Rs.10,000 each year for 25 years.

 If they have invested Rs 10,000 annually till 35 years then they
  could have fetched Rs 1.013 crore




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                                       Rohit begins investing
   25 year old Preeti invests          at 35 a similar amount
                                                                       1.01crore
   Rs.10000 annually for               of Rs.10000 annually.
   10 years and stops. She             He invests for the next
   does not withdraw any money.        25 years and he too does
                                       not withdraw any money.




                                                                    24.6 lacs
                                                                   76.9 lacs




                                                                   24.6lacs



 25         30           35       40      45            50        55        60
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                   RUPEE COST AVERAGING
By investing through SIP, you end up buying more units when the price is low and
fewer units when the price is high. However, over a period of time these market
fluctuations are generally averaged. And the average cost of your investment is
often reduced.


                               Graphical Presentation


         Thank You




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                       HASSLE FREE

• It is a hassle-free mode of investment since you
  can issue standing instructions for the regular
  transfers of money into your SIPs.

• SIPs inculcate the savings habit in investors.

• On a regular basis you put aside affordable sums
  of money and without realising it, over the long run
  you could amass great wealth


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                       EXAMPLE OF LUMPSUM vs. SIP
                      Rs.80000 invested in lumpsum at inception in Pru ICICI
                            Tech vs. Rs.1000 invested every month
   280000                        (for 82 months) since inception

   240000                                                                                                                                                                        247329

   200000

   160000

   120000                                                                                                                                                                      107172
    80000

    40000

         0
                               Nov-00




                                                          Nov-01




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                                                                                                                                                                                                 Nov-06
                      Jul-00




                                                 Jul-01




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             Mar-00




                                        Mar-01




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                                                                                                                                                                               Mar-06
                                                            Lumpsum Invstt                                                    Sip Invstt
Performance of lump sum investment depends on the price at which they are
bought
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                          SIP Investors beat equity MF peers in returns race

• Those who invested in mutual funds through the systematic
  investment plan (SIP) route benefited the most from fluctuating
  share prices over the past 2-3 years.

• Top equity diversified funds have returned 16-18% in three
  years, SIP investors have earned returns in the range of 25-
  28% (investing into the same funds) during the same period.

• Supposing an investor has invested Rs 1,000 every month
  (between November 23, 2006 and November 23, 2009), he
  would have pocketed a 31% return on his Sundaram BNP
  SMILE Fund, 29% on ICICI Prudential Discovery Fund and
  28% on his HDFC Equity Fund. Sensex three-year return being
  25% on a compounded basis
Source : Economic Times



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                               Thank you

                         Happy Investing



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posted:10/11/2011
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