As the world battles the consequences of the deadly virus, it won’t be wrong to say that life isn’t the same for anyone. While the pandemic has forced several changes in our preferences and priorities, a lot of people are evolving a new habit, or rather reviving an old, forgotten habit – the act of giving.
Often people consider donating or making a charity from their leftover funds. But, did you know you can just as easily convert it into a financial goal? All you have to do is use the same concepts as wealth creation and begin early and stay invested for longer durations.
SIP for benevolence
Philanthropy adopts much greater connotation today than ever before as any financial help, big or small is of enormous help to the ecosystem that has been badly hit by the COVID-19 pandemic. Everyone is eager to extend their hand and do their part in whatever they are capable of. However, not many are aware of the effective ways of giving. You can take the SIP route to give back to society. Before we understand how we can use SIP to create wealth for charity, let’s quickly recall what an SIP is.
What is SIP?
Systematic Investment Plan, commonly known as SIP is a mode to invest in mutual funds. Under an SIP investment, a fixed amount is invested in a set of mutual funds at regular intervals for a predetermined or fixed period of time. SIP instils financial discipline among investors through regular investing.
SIP approach ensures that the money is utilised properly for the chosen cause. The best part of investing in SIP is that you do not need a substantial amount of money at your disposable to do the act of charity. You can start with a little amount too.
How to use SIP to give back?
Unable to make a sizable donation in the charities? No need to fret. You can easily do that. No, you do not need to empty your pockets for that. Begin by starting an SIP for a fixed period of time in a liquid fund or debt mutual fund. On maturity of the scheme, donate the amount received on redemption to the charity. For charities, the best kind of SIPs would be for eight to ten months, so that an investor can claim the tax benefits on donations within the same year.
The act of giving also requires suitable guidance and direction. Recognising a cause you strongly feel for, tax incentives, the mode of payment, and the likelihood of tracking the impact of charity are some of the controlling factors.
In a sense, creating wealth for charity is very similar to investing – find a quality mutual fund that serves your goals, set up an SIP to ensure that you invest regularly and constantly track the performance of your mutual fund investment.
The gratification of beign the reason behind impacting someone’s life in a positive way through the act of giving is infinite. Do not let procrastination and nagging doubts rip you from that pleasure. Happy investing!