Tips to create wealth over long term by investing in mutual fund SIPs

Mutual fund has emerged as a popular investment option for meeting the longterm goals. The popularity of mutual funds is increasing day by day because of simplicity, transparency, and as a cost-effective tool to generate a high return compared to other investment options.

One may invest a lump sum amount as and when the money is available or becomes more a more disciplined investor by using the systematic investment plan (SIP) mode of investing. SIPs help you profit from volatility by automatically buying you more units when prices are falling and fewer units when prices are rising, thus lowering your average purchase price, while inculcating some much-needed discipline into your investing habits.

Here are five key tips that may help you in your journey of creating wealth through SIPs:

1. What should be the SIP amount

Before you begin saving through SIPs, make sure you have properly estimated the amount that you wish to save. Based on the current cost of the goals, a number of years to goal to arrive at the inflated amount. Now, you need to find out how much you need to save each month towards the inflated amount of the goal. This exercise will help you to save the right amount towards your long-term goals.

2. How many funds are enough