By Vijaykumar Sirsat, Mutual Fund Distributor, Goa
We all have financial goals that need to achieved at one stage or the other in one’s life. However, very often due to lack of planning or due to underinvesting, we end up not fulfilling those goals in the manner we once desired. Given this hard reality, there is a feature which has been put together to make your dream of achieving various financial goals reality.
Freedom SIP is a powerful investment strategy which adds wings of freedom to your SIP. Not only does it let you accumulate wealth in the long-term by keeping you systematic with your investments, it offers you monthly cash flows in multiples of your SIP amount after the SIP tenure is over. In fact, Freedom SIP is a blend of two effective, efficient and systematic tools — SIP and SWP.
This feature is a three step process. It begins with SIP for a timeframe between 8 years to 30 years. Then comes step 2, i.e. the corpus created is transferred to another fund with lesser risk profile. Thereafter in step 3, SWP is initiated from this fund.
There are several benefits to this approach. To begin with, it inculcates long-term investment habit. Very often, investors have a short-term approach in investments and thus lose out on wealth creation opportunities. Freedom SIP, with its fixed tenures, ensures investors stay long and disciplined. Furthermore, it is generally observed that at various stages of market cycles, investors’ behaviour and approach towards investment changes because of human emotions.
As the investment tenure ends, investors either tend to withdraw the entire amount or leave it in the market. Both the approaches may not yield the desired results. This is where the step 3 of Freedom SIP comes in handy. Through SWP, investors get the benefit of systematic withdrawal by selling units partially which provides the required liquidity but at the same time ensures that the remaining units continue to grow in value. In this manner, investors get the benefit of continuous cash flow.
To conclude, if you have a financial goal and clear investment timeframe, then make use of a feature like Freedom SIP to achieve it in a hassle free manner.
