American diplomat Colin Powell once said, “A dream doesn't become reality through magic; it takes sweat, determination and hard work.” Every person has a dream, be it to achieve a position at work, build a home, travel the world or to create a legacy for their descendants. However, none of these dreams can be met through a lax attitude – every person has to struggle to achieve their dream. It is frequently said that if your dreams don’t scare you, then you are not dreaming big enough. Enjoying the freedom to pursue and fulfil your dreams requires financial independence. Whether you want to purchase a new home, or travel across Europe, the first thing you require is money. It is a daily necessity and something which dictates the way your life proceeds. In this scenario, is your income enough to sustain the lifestyle you dream of? Or, do you need to create a plan to ensure long-term financial freedom and goal fulfilment?
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Most people invest to meet their long term goals like retirement or their children’s overseas education, marriage in a comfortable manner, without having to withdraw from the savings meant for other purposes. While this journey begins systematically, with a proper plan in place, over the years people end up slacking and failing to re-balance their portfolios. Or they may forget to initiate the required action, from time to time. If you have also been concerned about such lapses on your part, which may prove costly in the long run, freedom SIP is the way forward.
Investing towards financial freedom
In the words of the legendary investor Warren Buffett, “If you don't find a way to make money while you sleep, you will work until you die.” So, how do you make your money work for you and live the life of your dreams? In your life, during the years you work, you enjoy a steady stream of income. However, the moment you retire, your active income stops and you start utilising or relying on your savings. This is where features like Freedom SIP can help create a stable passive income which will aid in addressing financial requirements in one’ sunset years.
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With a systematic withdrawal plan aimed at helping you draw regular income from your previous investments, Freedom SIP enables you to earn an active income even after you retire. Here, you have the flexibility to choose the years of investments, which type of fund you want to invest in both for capital growth and capital protection, as well as the duration at which you want to receive your systematic withdrawals, making it a plan tailored to your unique needs.
Here, you can invest for 8, 10, 12, 15, 20, 25 or 30 years, and on completion of the tenure, investors will receive pay-outs in multiple of the SIP amount. The multiple will depend on the tenure selected. For example: If an investor opts for a 30-year SIP of Rs. 10,000 per month, then the multiplier in this case is 12x i.e. the investor will receive a monthly payout of Rs. 1.2 lakhs. In case of 25 years, the multipler is 8x and in case of 20 years the multipler is 5x.
Under the scheme, you can grow your wealth through SIP and then receive your monthly pay-out via SWP, once you switch to the target scheme. As an investor, you can invest for a particular number of years, transfer the amount to a relatively safer fund to protect the corpus generated, and then withdraw systematically to meet the end objective. All of this is done in the most efficient manner, ensuring both, a stable income and a tax-efficient way to enjoy the fruits of your labour. For your source scheme, an investor can consider equity scheme given the long tenure of investment and for target scheme, you may consider hybrid or debt scheme.
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Benefits of investing in the ICICI Prudential Freedom SIP include access to financial goal-based investing, which helps investors decide the monthly investing amount, inculcating the habit of long term investing, and availing the suitable combination of source and target funds, based on your requirement and risk appetite. If you have been spending restless days thinking about your financial freedom after retirement, the freedom SIP will act as your best friend and supportive pillar on your journey towards realising all your dreams.
