SIP as the world knows it as Systematic Investment Plan but we consider is as simple investment plan to build wealth. SIP is nothing but Recurring Deposit with MF

Story No 1: Right Asset Class

There were three friends Pujara, Rahul, and Sehwag. All of them decided to invest 10000 pm in 2003. So now all of them completed 20 years. Pujara invested 10000 pm in Recurring Deposit.

Rahul Invested 10000 pm in Gold and Sehwag invested 10000 pm in SIP in Diversity Equity Mutual Fund.What happens to their investment is very interesting.

All invested 24 Lakh individually.

• Pujara’s 24 Lakhs became 51 lakhs Return of 7 % CAGR ( Bank RD )
• Rahul got 83 lakhs.Return of 11% CAGR ( Gold )
• Sehwag who invests in SIP of Equity Mutual Fund accumulated 1.17 Cr. Return of 14 % CAGR

It means by investing in the Right Asset class one can create Wealth.

Right Asset class at the right time is very important. Equity is the Right Asset class for Long term and discipline investment. Most people remain disciplined with LIC for 20 years to get 4% to 5 % cagr if they do the same with MF SIP Wealth can be created.

Blog by Mr. Santosh G Akerkar for Investor awareness and Educational Purpose.