These illustrations prove that you'll actually make more money if you invest throughout the course of a down market that eventually recovers, than if you invest regularly during a market that instead, grows steadily (again, results are different
from lump sum investing, which will favor consistently upward trending markets):
Not exact matches
I personally
invest lump sum into individual stocks (I «ve been building up a passive dividend income stream for years), mainly because I want to get a large dividend contribution
from a stock at the time I believe the price is right.
From a strictly mathematical sense, it's obvious to me that if a market grows 10 % on average, that DCA will lag
lump sum by 10 % * the average time money isn't
invested.
For example, when I sold a significant amount
from my taxable brokerage account to
invest in a small business, I sold index funds in a few
lump sums over 6 or so weeks.
if u have a
lump -
sum, then after deciding on the equity fund to
invest, u can
invest the lumpsum in a liquid fund of the same fund house and then start an STP
from that liquid fund into your chosen equity funds.
From a quick calculation using the websites above, the
lump sum option will save you almost $ 3k in interest over 25 years, while
investing these $ 10k will grow to $ 33k over the same time period (considering a return of 5 %).
(MIP - you may
invest some
lump sum amount) STP:
From a liquid fund to Equity fund (within same fund house).
So you
invest the
lump sum money in a liquid fund of the same fund house and then make an application to transfer a certain amount
from this liquid fund to the equity fund at certain defined intervals.
You can pick Liquid funds
from respective fund houses,
invest the
lump sum amount in them and set up STPs to equity funds.
Few can manage a
lump sum of capital, and know what to
invest it in, and how much to take
from it per year.
If the entire monetary award is taken as a
lump sum and
invested in stocks or bonds, then the income generated
from those investments would be taxable.
till then I am only
investing in Mutual Funds, with the intention of Wealth creation (
from SIP's) and profit booking
from my
lump sum investments in Mutual Funds.
You should take these as an opportunity to
invest more in
lump sum apart
from your regular SIPs in order to take the due advantage of rupee — cost averaging.
Dear Subramanyam Ji, If you would like to accumulate Rs 50 Lakh in 5 years
from now, assuming the rate of return as 10 %, you have to
invest around Rs 8.2 Lakh per annum (or) Rs 31 Lakh
lump sum investment.
DCA isn't usually the best way to
invest a
lump sum, you'll usually do better
from upfront investment
It is better to take the single
lump sum distribution
from my pension and
invest the money rather than take the lifetime distribution»
So you'll want to be sure that after buying the annuity you have enough left over
from your
lump sum or
invested in other accounts to cover unanticipated expenses.
But be aware that some financial advisors recommend this approach in order to secure a regular commitment
from those clients who simply don't have a
lump sum to
invest at the outset.
If you would have
invested your bonus in the past 3 years at
lump sum of $ 6,000 a year, you could potentially be enjoying an 18 % return
from the total investment amount of $ 18,000.
And if you
invest the money
from your
lump sum payout, earnings
from those investments will be taxed.
This may be correct in claims with a very substantial discount, but such opinion appears to be derived
from the misconception that a
lump sum might be
invested with the result that the shortfall could be reduced over time.
The receiving spouse also benefits
from lump sum spousal support because he / she can take that money and
invest it somewhere or buy a property with it and earn interest on it rather than having to wait each month to get paid or be dependent on his / her ex-spouse.
One can also
invest a
lump sum amount and take a pension or annuity plan
from insurance companies for regular income by deciding the frequency and quantum of payouts.
The payout of a large, untaxed
lump -
sum will allow Jim's wife to
invest the money she receives
from the life insurance policy once he is gone, if she outlives him.
While one may argue that the
lump -
sum payment
from a term plan is also tax - free,
from a larger perspective, the income generated
from investing that money is liable for taxation.
Under immediate annuity plans, on the other hand, you pay a
lump sum amount and annuity payments start immediately
from the corpus you have
invested.
If you want to
invest a
lump sum and expecting to get higher regular income
from mutual funds, you can opt for Monthly Income Plan (MIP) Mutual funds in India.
Real estate
investing can be a lucrative investment, returning consistent passive cash flow
from a rental or a
lump sum profit
from a flip.