SWP (systematic withdrawal plan) is the reverse of SIP. You create a corpus through SIP over a period of time, and the same corpus now can be used for lifetime annuity by way of SWP. Unfortunately, most investors do not know how to use this powerful tool to get financial freedom.
In SWP you withdraw the specified amount at a fixed interval from your corpus and the same amount you get in your bank account for further usage of money. There are several Features, Advantages & Benefits (FAB) of SWP which most investors are not aware of:
Feature:
- Minimum SWP amount - Rs. 500
- Date - any date between 1 to 28
- Frequency - daily, weekly, fortnightly, monthly, quarterly
- Flexibility - anytime pause, stop, restart, redeem - full or partial, increase or decrease SWP amount
- Convenient - with or without Demat, online or offline
- Asset categories - Equity, Deby, Hybrid, Liquid, Gold, Real Estate, Int. Equity
- Automated process - directly transfer to Bank account on the specified date
Advantage:
- Rupee cost averaging
- Power of compounding
- Risk management - manage the volatility of the market
- No need to time the market
- Keep your emotions of fear & greed in control
- Give the opportunity to participate in the market for small & retail investors
Benefit:
- Achieve financial freedom
- Helps to generate regular cash flow
- Annuity for life
- Create a legacy for the generations
- The remaining corpus continues to build wealth
- The auto-transfer process reduces human biases & emotions
- Consistency
- Discipline
- Patience
- Behavior Finance - mindset & attitude
SWP is a time test formula for systematic withdrawal for retail investors. However, many still deprived of this scientific approach just because of their own behavior.
Disclaimer: Investment in securities & mutual funds are subject to Market Risk
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