SIP the Great Equaliser
Let’s say there’s a man named Ravi and a man named Kavi
Ravi had 12 lac to invest but Kavi had 1 lac to invest per month
Let’s assume the market was range bound for the next 12 months
So at the beginning of the 12th month both Ravi and Kavi have Rs 12 lac invested
Just at the end of the 12th month the invested amount rises to 13 lac
Both Ravi and Kavi have made 1 lac profit
The question is not about just calculating returns
In this case SIP returns are 15.7% & Lumpsum is 8.33% respectively
It is a lot deeper
This example shows that the volatility of the stock market helps the less rich or less fortunate people to catch up with their wealthier counterparts
Therefore SIP is truly a great leveller in the long run
I rest my case
