EMI vs SIP: Know which one of the two is a better bet

5 THINGS TO KEEP IN MIND

1) The SIP option does not work for all assets, only discretionary purchases. It does not make sense to wait for 6-9 months to buy a fridge or a laptop.

2) The EMI option is costlier, but you also get to use the asset immediately. It is better to buy certain items, such as a treadmill or your first car, when you need it.

3) The SIP approach has not taken inflation or taxation into account. Certain items, such as cars or gadgets, could become costlier if you wait for 1-2 years.

4) Some expenses, such as the fees for an MBA, cannot be postponed. The SIP option can work only if you plan well and start saving 2-3 years in advance.

5) EMIs have been calculated on the base amount. There could be additional charges. However, the self-employed can cl ..

Source : http://economictimes.indiatimes.com/wealth/savings-centre/analysis/emi-vs-sip-know-which-one-of-the-two-is-a-better-bet/articleshow/41857848.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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