What is a Systematic Investment Plan?
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What is a Systematic Investment Plan?

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Your investment stresses you out constantly. You work hard at it every day and the worst part is, you're not even seeing good returns. Does this sound like you? If so, then it's time for a change. That's where a Systematic Investment Plan (SIP) comes in. It's an intelligent, and easy way to invest in mutual funds but don't limit yourself there. You can even apply this logic to other markets.


Those three words "systematic investment plan" seem like confusing, financial jargon. However, it's really simple. With a SIP, your money automatically transfers from your bank account to a mutual fund. You are given a certain number of units based on the current market rate (they call this the net asset value). From there, every time you invest money, more units from this plan are purchased at the current market rate and then added to your account. Therefore, units are bought at different rates and you benefit from DCA.


There are tons of benefits to the systematic investment plan but perhaps the most important one is discipline. Everyone can admit it's hard to save money sometimes. You see that new dress on sale or you splurge on a fancy dinner one night. it happens. With SIP though, you commit to a disciplined saving technique. Furthermore, it's more flexible, convenient and better for long-term gains. Now that we've seen the SIP in action with mutual funds, let's see how it looks somewhere else.


Whether it's a blockchain based crowdfunding investment in YouToken or just a normal crypto, there are many investment opportunities with blockchain. You may hear some bad news about crypto investing but it's no different than traditional investing. People are rarely patient, disciplined or flexible enough to see a high return on their investment. Hence, apply the SIP logic to all your investments will result in a calmer state of mind eventually, a larger bank account.

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Published on
March 22, 2018
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