This post is for people who are confused about how to invest in SIP (Systematic Investment Plan) or Lumpsum. In this post we will know what is SIP and what is Lumpsum and how can we invest in it and what are the problems involved in it. In this post, we will see all about the benefits and who it is applicable to.
Systematic Investment Plan (SIP)
SIP is not an investment but a type of investment. When we invest, are we going to invest month by month? Or let’s plan whether we are going to invest year after year. That means we will continue to invest the amount you specified in the specified month.
Systematic Investment Plan Benefits:
1. Rupee Cost Average
2. Discipline
3. Flexibility
4. Regular Income
5. Investment Start with the minimum price
Lumpsum
Lumpsum is exactly the opposite of SIP investment. You can start with small amount in SIP investment but you can invest in Lumpsum only if you have definitely more amount. Let’s see what some of the best benefits are there.
Lumpsum Benefits:
1. Bulk Investment
2. Best While Market is Low (Invest while is Low)
3. Suitable for One-Shot Payment Getters
4. Invest More than 5 Years to get more Profits
To see who Lumpsum is suitable for, you can invest in Lumpsum if you have one shot payments or if you receive large amounts frequently. If you have a small amount you can invest monthly in SIP. When asked which is better Systematic Investment Plan or Lumpsum, it varies by scenario. Power of compounding works well in Lumpsum. But the amount you invest in SIP is as good as you get. Systematic Investment Plan (SIP) is best for Polling Market and Lumpsum is best for Growing Market.
