You can fulfill your goals with Freedom SIP, know the way
What is Freedom SIP
Freedom SIP is now an optional feature in mutual funds. Which helps you to achieve financial freedom with another source of cash flow after a certain period of time. It lets you feel free to follow your dreams and do what you always wanted to without worrying about money. According to mutual fund distributor Narendra Baliga, basically Freedom SIP is a combination of systematic investment and withdrawal. Any person can invest in this for a minimum period of eight years. It can be extended up to 30 years. Once the tenure is over, the deposited funds are converted into another fund i.e. target scheme of your choice. Ideally the target scheme is one with a relatively low risk profile. This ensures that your fund is not exposed to undue market risk.
what happens after the period
According to Baliga, after the end of the tenure of the scheme, the target scheme triggers a Systematic Withdrawal Plan (SWP) and the eligible number of units are liquidated every month. The entire process of investment switch and withdrawal is hassle-free and investors need not do anything other than avail monthly cash flows due to years of disciplined investments.
On what principle does Freedom SIP work?
He explains that in fact, Freedom SIP works on a simple principle which consists of three phases of investment. The first stage is accumulation units with cost averaging over the investment period. The next stage is wealth creation as the units collected increase over time. And the last step is to get the profit by systematically withdrawing a fixed monthly amount which is in multiples of the original SIP amount. For example, if the tenure chosen is eight years, the withdrawal amount will be equal to the SIP amount. As the tenure increases, so does the multiplier.
Protects from both greed and fear
Experts say that Freedom SIP not only lets you earn money, but it also helps you reap profits. Along with this it empowers you financially. It ensures longevity of investment, develops disciplined approach and most importantly it protects you from both greed and fear and secures your future.
