Rupee cost averaging is an investment strategy whereby the investor invests a fixed amount in a particular investment on a regular basis regardless of the price. This results in more units of the fund being purchased when the NAV is low and fewer units being purchased when the NAV is high. Eventually, the average cost per unit of the investment product reduce the risk of investing a large amount in a single investment at a time when the NAV is high.
The sooner you start, the better. The example below shows the difference in accumulative savings between Mr.Early and Mr.Late, who started saving at different times. Mr.Early saves for 10 years and then stops. Mr Late starts 10 years later and saves for 20 years. But Mr.Early still get 87% more than Mr.Late (based upon an investment that gives 10% annual growth, not taking into account annual inflation).
Investing is the act of acquiring assets like stocks, bonds, shares, real estate, or commodities with the aim to either sell them at a higher price in the future to make a profit, or for the assets to generate passive income for them in the long run. People can actively invest and manage their own investments, or choose to use a financial advisor. Investors can choose for passive investing through fixed-income assets like bonds, or buy into stocks that require more attention and work.
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