What are the benefits of having a dedicated SIP for your every personal goal?

systematic investment plan (SIP) is an effective route for an investor to create wealth over a long period of time. They are especially good if you have particular financial goals to fulfil. For example: to buy a house, a child’s higher education, retirement corpus, etc. One should have a longer-term goal while starting SIPs, ideally for a period of 10 years or more. And should continue investing irrespective of the ups and downs in the market.
a) Brings regularity and discipline: A SIP brings regularity and consistency in investments. You tend to be more disciplined with your SIP investments in order once you have linked it to a goal. Since you already have a certain expected amount in mind, you try your best to avoid missing any SIP investments.
b) Rupee cost averaging: One of the biggest advantages of SIP is that it makes the volatility which is inherent to the market work in your favour. Since you invest regularly over a period of time, you invest in various market time frames. When you invest during peak periods, you get fewer mutual fund units, while you receive higher units when the market has fallen, thus averaging your cost of investment.
c) Can begin investing with a small amount: You can start your mutual fund journey with as little as Rs500/ month. So rather than waiting for saving enough to start investing in your goal, you may start even today with a small amount.
d) Flexibility: While SIPs do involve you committing a certain amount every month or quarter, that does not mean they are inflexible. You can modify your SIP amount however you want. If you got a pay hike, and want to invest more, you can increase your SIP in a particular fund. Even if you are facing some cash crunch, you can either pause your SIPs.
e) SIP helps you plan your goals years in advance: Once you are clear about what is the goal that you should start the SIP. We all know that with our current and potential future income will not be enough to fulfil all our goals. Therefore, an accumulation of investments over a long period of time through SIP route powered with compounding could generate the desired results.
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