You know that moment when your salary hits your account, and you think you've got it all planned out? You just have to pay off the bills, fees and subscriptions, and you will have a tidy sum left over to invest away for the future. And so at first it all seems like it’s going to work out, but then the month actually happens with all the unexpected expenses and maybe even the occasional “I deserve this” purchase… and then at the end, when you’re planning the investments, you realise, there’s not much left to invest.

And that throws a real wrench in your investment plan, stocks are expensive after all, especially the one you had your eye on. But thankfully, investment isn’t just a game of large sums; you can invest with just a few hundred as well and grow your wealth through the concept of compounding rather than by lump sum.

And that brings us the SIPS and Mutual funds. Let’s talk about it.

Introduction To SIPsOk, so what exactly is an SIP? Well, SIP stands for Systematic Investment Plan and is a method of investing that allows individuals to invest relatively smaller amounts of money on a cyclical basis. For example, by SIP investment, one can invest ₹100 every week or so, and so over time, grow one's investment through accumulation rather than by investing a large sum once.

SIPs are a form of mutual fund investment which, as I am sure you will know, is an alternative form of investment to buying stocks and shares. It can be understood as a form of collective investment through which several investors pool their money together to invest it in a wide range of securities.

What Are The Benefits Of A Mutual Fund?

There are many benefits to this form of investment; for starters, mutual funds tend to be run by people who have experience in the matter and know how to expertly read the market and predict movements. Investors are also able to closely follow their investments through a mutual fund tracker. A tool that allows users to monitor and analyse their investments through a simple interface.

Another inconvenience is that many MF investment platforms even allow users to arrange for automated payments, meaning you don’t have to worry about remembering to deposit the money every cycle; the money goes through whether you remember or not. You can even cancel or reschedule the transaction at ease.

Furthermore, there is the benefit of diversification. In the financial sense, this means that your investment is spread over a wider range of securities, and this reduces loss should the market take a hit.

Another benefit of mutual fund plans is that they are highly liquidable, that is to say, investors or owners of these funds can buy and sell their securities and shares at any time they so choose and quickly receive the funds.

Conclusion

There will always be something, an unexpected bill, a last-minute plan, that will drain away at your finances, and you might fret that this will imperil your plans for investing. With options like SIP and Mutual funds, you can still invest even smaller amounts and build wealth and your portfolio through the principles of accumulation and discipline.