How to maximize gain from SIPs?
SIPs are surely safer and convenient ways of building wealth and securing your future over a long term. However, just getting started on any SIP may not deliver the best of returns. If you are not sure how to get the maximum out of SIPs, you should certainly build a smart strategy for your investments.
Staggering the SIPs
Staggering is considered as one of the smartest ways of increasing your benefits when investing in SIPs. For example, if you have many SIPs in 4-5 mutual funds, you can stagger the dates over the entire month unlike having all of them in close proximity of dates. This way, you would ensure that your money does not flow out of your hands in one go and you would be spared of the financial burden as well.
Link every SIP to a specific goal
We all have financial goals in our lives and that’s why we go for SIPs. The smartest idea is to link every SIP to a specific financial goal. If you don’t know what you want out of a particular SIP, you won’t really be able to connect with it and would lead to investing your money in a vague manner. Therefore, list your financial goals in the order of priority and meet up with them.
You may opt for yearly SIPs
As your income rises every year, so should your savings. Correspondingly, the SIP amount should also increase in the same proportion. You can direct the surplus savings to an SIP in another scheme or increase the allocation towards the existing SIP. Howsoever you do it, it’s crucial that you increase your savings every year.
Last but not the least, you can use systematic transfer plans when you have multiple SIPs running at the same time. Maintaining a high balance in your savings account is never advisable. Instead you can think of investing it with Systematic Transfer Plan (STP).