Automatic Investment Plan (AIP)
An investment program that allows investors to contribute small amounts of money (as little as $20 a month) in regular intervals. Funds are automatically deducted from the investor's checking/savings account or paycheck and invested in a retirement account or mutual fund. Investopedia Says:
This is one of the best ways to save money. By "paying themselves first" many people find they invest more in the long run. Their investments are treated as another part of their regular budget. It also forces people pay for investments automatically, which prevents them from being able to spend all of their disposable income. Related Terms:
Compounding
Dividend Reinvestment Plan - DRIP
Dollar-Cost Averaging
Mutual Fund
Value Averaging
Voluntary Accumulation Plan |