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Unlock Financial Wellness With Freedom SIP

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Unlock Financial Wellness With Freedom SIP
Manali Shah, Proprietor, S Square Investments
Manali Shah - 09 February 2024

Who among us doesn’t desire freedom in all of its forms? Everyone strives to achieve independence in some manner, whether it is by choosing our careers, expressing our ideas, or dressing whichever way we choose. The most significant freedom of all is financial freedom, which enables people to achieve all of their life goals without being enslaved by unfulfilling work or never-ending financial battles. This freedom exists amid these evolving paradigms. The answer you’ve been looking for is here if you’ve been looking for the best way to achieve financial independence without sacrificing your present-day needs and wants.

Dream vs Responsibility

Everyone aspires to be financially independent, regardless of which life stage they may be in. For instance, a young college graduate might be worried about not having cash flow and being dependent on his parents, if he were to choose a non-conventional career over a stable corporate job, or a working professional with grown-up children might not be able to choose early retirement they are worried about leaving a legacy for their children. In any of these scenarios, financial freedom can mean the difference between fulfilling and abandoning your dreams. Armed with the manifold benefits of a Freedom SIP, you may now live the life of your dreams without being constrained by financial obligations.

Secure your dreams with Freedom SIP

Freedom SIP is a feature launched by ICICI Prudential Mutual Fund to address the potential challenge faced by an investor when it comes to attaining financial freedom.

The way forward is exceedingly simple—first of all, you need to decide your time horizon—when do you wish to retire, or go on that world tour that you have been planning since you were a child? Once you have this timeline in mind, you can decide your secondary cash flow through a Freedom systematic investment plan wherein if you invest say Rs. 10,000 every month for the next 15 years you will have the ability to access monthly systematic withdrawals of Rs. 30,000 during your retirement years. Separately, if you invest the same amount for 20 and 30 years, you can receive monthly SWPs of Rs.  50,000 and Rs.  1.20 lakhs per month, respectively, ensuring a safe and financially independent retirement. As the SWP amount rises significantly with each additional decade you remain invested in, it is advisable to begin your Freedom SIP right away. Starting early will enable you to invest smaller amounts, thus reducing the pressure on your present financial situation, in addition to offering you the benefits of compounding and rupee cost averaging over the long term.

Understand how it works

Let us consider the example of Mr Singh, 35, a private sector executive who earns Rs.1.20 lakhs per month and wishes to retire at 55. Here, Mr Singh’s earning and investing phase will last 20 years, post which, he wishes to start his own pottery business and travel the world. If he starts his Freedom SIP with a monthly sum of Rs.  20,000 for the next 20 years, his investment value would reach Rs. 1.53 crore, considering a compounded annual growth rate of 10%. This amount can then be withdrawn through SWPs during his retirement phase, ensuring a regular source of income. In addition, if Mr Singh chooses the top-up option and invests a nominal additional amount of Rs. 2,500 every year, his corpus over the next two decades would become a staggering Rs.2.75 crores! This is the potential of Freedom SIP, which is the easiest way to secure your financial freedom in a world filled with challenges.  

Many people spend their earning phase worrying about their future; they avoid splurging on luxuries and live a thrifty life focused only on saving money for retirement. This sort of lifestyle can rob you of the joy that your present can bring. Alternatively, some people live their present lives to the fullest, only to get a rude shock in the future, when they find themselves struggling to make ends meet. With Freedom SIP, you have the ability to enjoy your present and also secure your future—in a hassle-free manner. You can start investing an amount you are comfortable with and increase the SIP as you start earning more, all the while knowing that your future is financially sorted. With Freedom SIP, it is time to overturn the belief that you cannot have your cake and eat it too!


Disclaimer

The views are personal and are not part of the Outlook Money editorial Feature.

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