Systematic Investment Plan (SIP)

Systematic Investment Plan (SIP)

SimpleMin Investment of only Rs.500

IntelligentBenefit from the Power of Compounding

PracticalLink to your Financial Goals

Did you know ?

If your current monthly expenses are

Rs. 30,000/- p.m, after 20 years you will

require Rs. 80,000/- p.m to maintain the

same lifestyle

Assuming inflation rate of 5%

Did you know ?

An education degree for your child

which currently costs Rs. 10 lakh will

cost Rs. 21 lakh after 15 years.

Assuming inflation rate of 5%

Individual Investor Needs: Investment Goals

• All individuals need to save for

- Retirement

- Child’s education / marriage

- Medical emergency

- Other family obligations

Every individual has one or more of the above goals

Individual Investor: Life Stages

Earnings

Consumption

Savings

22 27 40 60Young Independent Young Married Middle Age Retirement

All individuals have a finite period to save for their investment goals

Value of Money over time

Impact of inflation on monthlyexpenses of Rs. 30,000 today

79,599

62,368

38,28830,000

Today 5 years 15 years 20 years

Value of Rs. 100,000 over time

100,000

78,353

48,10237,689

Today 5 years 15 years 20 years

At inflation of 5%

Investors need to beat inflation

Performance of Various Asset ClassesCumulative annualised returns 1980-2004

15.6%

10.3% 8.9%

6.7% 5.7%

3.55%

-1.1%

Inflation Gold Bank FDs BSE Sensex

Growth Real Growth

Equities outperform other asset classes over the long term

Individual investors are scared of …..

The Downside Risk in Equities

The Risk of Market Volatility

The Risk of Market Timing

What else makes a material impact oninvestments in equity ?

Investing in the BSE Sensex - 25 yearsReturns are from 1981- Dec 2005

15.07%

Fixed investment athighest sensex value

every year

16.90%

Fixed investment atlowest sensex valueevery year

16.02%

Fixed investment on1st day of every month

Market timing does not matter over the long term

The Power of Compounding

Monthlyinvestment

Debt BSE Sensex BSE SensexInstrument Scenario A Scenario B

Rs. 5,000 Rs. 5,000 Rs. 5,000

Assumed 10% 15% 20%annualised return

Final corpus Rs. 43 lakh Rs. 89 lakh Rs. 1.9 crore

From Jan 1, 1984 to Dec 31, 2004 - a 21 year period

Summary

Investors needs to saveregularly and invest thosesavings in higher returnassets to create wealth

Long Term SystematicMonthly Investment in

equity schemes is idealfor this

How Do You Achieve Your Financial Goals

• Retirement

• Child’s education - international

• Family commitments - medical emergency, etc

Retirement Planning

Monthly Household ExpensesRetirement corpus required

83,579

30,000

Inflation 5%

21 Yrs

to meet post retirement expenses.(if invested at 7%)

1.4 crore

Monthly investment neededto meet post retirement expenses

at 12% 12,583

at 15% 8,083

Today At the timeof retirement

at 18% 5,090

Child’s Education

Educational Degree

34,20,000

20,00,000

Inflation 5%

11 Yrs

Monthly investment neededto achieve this goal

at 12% 12,456

at 15% 10,166

at 18% 8,237

When your childPresent actually goes

for this degree

Child’s Marriage

43,70,000Monthly investment needed

to achieve this goal

20,00,000 at 12% 7,509

at 15% 5,466

Present

Inflation 5%

16 Yrs

When marriageactually takes place

at 18% 3,925

So What Are The Benefits Of Investing Through

A Systematic Investment Plan !

Benefit : 1

• The Benefit of Long Term Equity Investment

- Equities give superior returns among all asset classes overthe long term

- Mutual Fund has a track record of consistent goodperformance relative to index.

Benefit : 2

• The Benefits of Systematic Monthly Investment

- Takes out the risk of market timing

- Adds the benefits of the power of compounding andrupee cost averaging

Benefit : 3

• Flexibility

- You can choose from a wide array of schemes

- You can decide to keep invested amounts in an earlierscheme & invest future SIP instalments into a new scheme

Benefit : 4

• Added Convenience

- Auto debit facility across major cities in India

- Regular account statements

- Redemption request directly credited into your bank account

Make your investment goals a reality

Start a S.I.P. today !

A Rupee Saved Is A Rupee EarnedA Long Journey Begins With A Small Step

For More InformationVisit http://www.rakshainvestment.com