Almost all of us dream of buying a beautiful home that we would like to settle in. Even though a house is on everyone’s mind, very few people tend to systematically plan for it. The best way to overcome the financial challenges associated with buying a house is to start planning and investing early. Time is your best friend as it helps in compounding money.
If you’re below the age of 25 and have just started working, the best thing to do is start accumulating a corpus. Getting a corpus ready is the biggest hurdle for prospective home buyers. Usually, the thought of buying a home occurs around the age of 30-35 or even later. At that time, most of us earn enough to qualify for a home loan but can’t manage the 20% upfront down payment requirement by most builders. One of the most reliable and rewarding ways to build a corpus is to invest in an SIP.
The key to your dream home
SIP is an investment of a fixed amount for a fixed period that helps you fulfil your goals systematically. If you start this investment in mutual funds from the very first salary you earn, you can potentially save enough to pay the down payment in 5-10 years. We bring you the top 4 reasons why SIP is the key to owning your dream home:
It has good potential in the long run
Mutual funds aim to give potential returns in the long term, so the early you start the better. But if you can’t invest much when you have just started, SIP can be a big help since you only have to invest a small amount regularly. You also don’t have to wait for the right time to invest.
An easy & convenient investment
Once you make the decision to invest in a SIP, very little effort is required on your part. The investor just needs to give standing instructions to the bank to transfer a stipulated amount on a regular basis towards SIP. This ensures no delays are made in payments and reduces the troubles of manual deposits.
Reduced risks with rupee cost averaging
With a long-term investment approach, you tackle the market fluctuations and aim to gain maximum profits with rupee cost averaging. Due to this, when the rates are low, you get maximum shares and when the rates are high, your buying is automatically reduced. This saves you from the risk of more purchases at high rates. By investing a fixed amount every month, the average cost is maintained at a lower level and thus, you usually get higher potential profits in the long term due to compounding.
Enjoy liquidity and flexibility in your investment
SIP offers lots of flexibility to investors, right from the amount you invest (as low as ₹1000) to the tenure of your investment. You can decide to invest monthly or quarterly, based on your convenience. You can also decide to stop and close the SIP whenever you want, thus giving a fair amount of liquidity to your investments.
If you dedicatedly plan and invest, SIPs can go a long way in helping you pay for the down payment for your dream home. By investing in a SIP rather than the EMI, you can gain more profits with the power of compounding too in the long run. So, aim to start your #SabseImportantPlan with Aditya Birla Sun Life Mutual Fund and get ready to move into your dream home really soon! You may consult your financial advisor before investing.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.