systematic investment plan

Systematic Investment Plan (SIP)

SimpleMin Investment of only Rs.500

IntelligentIntelligentBenefit from the Power of Compounding

PracticalLink to your Financial Goals

Did you know ?

If your current monthly expenses are

Rs. 30,000/- p.m, after 20 years you will

require Rs. 80,000/- p.m to maintain the

same lifestyle

Assuming inflation rate of 5%

Did you know ?

An education degree for your child

which currently costs Rs. 10 lakh will

cost Rs. 21 lakh after 15 years.

Assuming inflation rate of 5%

Individual Investor Needs: Investment Goals

• All individuals need to save for

– Retirement

– Child’s education / marriage

– Medical emergency– Medical emergency

– Other family obligations

Every individual has one or more of the above goals

Individual Investor: Life Stages

Earnings

Consumption

Savings

60Retirement

40Middle Age

27Young Married

22Young Independent

All individuals have a finite period to save for their investment goals

Value of Money over time

Impact of inflation on monthly

expenses of Rs. 30,000 today

Value of Rs. 100,000 over time

62,368

79,599

100,000

78,353

48,102

At inflation of 5%

Investors need to beat inflation

30,000

38,288

Today 5 years 15 years 20 years

48,102

37,689

Today 5 years 15 years 20 years

Performance of Various Asset Classes

Cumulative annualised returns 1980-2004

6.7%

10.3%

15.6%

8.9%

Equities outperform other asset classes over the long term

6.7%5.7%

3.55%

-1.1%

Inflation Gold Bank FDs BSE Sensex

Growth Real Growth

Individual investors are scared of …..

The Downside in EquitiesRisk

The of Market Timing

The of Market VolatilityRisk

Risk

What else makes a material impact on

investments in equity ?

Investing in the BSE Sensex – 25 years

16.02%16.90%

15.07%

Returns are from 1981- Dec 2005

Market timing does not matter over the long term

Fixed investment on 1st day of every month

Fixed investment athighest sensex value

every year

Fixed investment atlowest sensex value

every year

The Power of Compounding

Monthly

investmentRs. 5,000Rs. 5,000Rs. 5,000

BSE Sensex

Scenario B

BSE Sensex

Scenario A

Debt

Instrument

From Jan 1, 1984 to Dec 31, 2004 – a 21 year period

Final corpus Rs. 1.9 croreRs. 89 lakhRs. 43 lakh

Assumed

annualised return20%15%10%

investment

Summary

Investors needs to save

regularly and invest those

savings in higher return

assets to create wealth

Long Term Systematic

Monthly Investment in

equity schemes is ideal

for this

How Do You Achieve Your Financial Goals

• Retirement

• Child’s education - international

• Family commitments - medical emergency, etc• Family commitments - medical emergency, etc

83,579

Monthly Household ExpensesRetirement corpus requiredto meet post retirement expenses.(if invested at 7%)

1.4 crore

Retirement Planning

TodayAt the time

of retirement

30,000

21 Yrs

Inflation 5%

Monthly investment neededto meet post retirement expenses

at 12%

at 15%

at 18%

12,583

8,083

5,090

Child’s Education

Educational Degree

Monthly investment neededto achieve this goal34,20,000

PresentWhen your child

actually goes for this degree

11 Yrs

Inflation 5%

at 12%

at 15%

at 18%

12,456

10,166

8,237

20,00,000

Child’s Marriage

Monthly investment neededto achieve this goal

43,70,000

at 12%

at 15%

at 18%

7,509

5,466

3,925

PresentWhen marriage

actually takes place

16 Yrs

Inflation 5%

20,00,000

So What Are The Benefits Of Investing Through

A Systematic Investment Plan !

Benefit : 1

• The Benefit of Long Term Equity Investment

– Equities give superior returns among all asset classes over the long term

– Mutual Fund has a track record of consistent good performance relative to index.

Benefit : 2

• The Benefits of Systematic Monthly Investment

– Takes out the risk of market timing

– Adds the benefits of the power of compounding and – Adds the benefits of the power of compounding and rupee cost averaging

Benefit : 3

• Flexibility

– You can choose from a wide array of schemes

– You can decide to keep invested amounts in an earlier scheme & invest future SIP instalments into a new schemescheme & invest future SIP instalments into a new scheme

Benefit : 4

• Added Convenience

– Auto debit facility across major cities in India

– Regular account statements– Regular account statements

– Redemption request directly credited into your bank account

Make your investment goals a reality

Start a S.I.P. today !

A Rupee Saved Is A Rupee Earned

- A Long Journey Begins With A Small Step

www.tflguide.com