The SIP calculator is one of the tools that any young person seeking to begin his/her investment journey must utilise. It tells how much wealth one can amass just by being disciplined in investments.
Before you begin to invest, there is a golden rule to be aware of – an inviolable rule that works without exception. And that is, there is great power hidden in the number of years for which one makes investments. The longer one keeps investing, the more one accumulates.
Settle for a comfortable amount
Therefore, it is always advisable to settle down for a monthly investment that one can do without trouble and continue for years to come.
This feature of SIP or Systematic Investment Plan has drawn millions of investors around the country.
Let’s dive into the calculation. Don’t worry – it’s really simple. You don’t have to really calculate anything, the software will do it for you. You can visit websites of AMFI (Association of Mutual Funds in India), SBI, HDFC Bank, ICICI Bank, Axis Bank, PNB to get these online calculators free.
SIP calculator: How to make Rs 1 crore
Think of a person who starts investing as soon as he/she becomes an adult. The mode of SIP payment is monthly and he/she puts in just Rs 1,200 a month into a couple of funds.
Let’s assume the person keeps investing really long – till he/she is 58. It means the SIP is continued for 40 years.
Let us expect a 12% return from the funds, both of which are equity-oriented funds.
The amount of money that can be generated by putting in just Rs 1,200 every month for 40 years at the modest rate is going to be Rs 1.42 crore.
The calculator will also tell you that the amount that you actually end up investing from your pocket is Rs 5.76 lakh. The gain that you will make, therefore, stands at Rs 1.36 crore.
A scenario with 30 years
If 40 years seem too long, let’s see what 30 years can generate with the same SIP every month.
In 30 years, the total amount comes to Rs 42.35 lakh.
Morale of the story
You have to start really early to build a big pool with a small amount. In fact, Rs 1,200 is such a small amount that one can spare it even from one’s pocket money, making it possible for even those in their mid-teens to open a SIP account.
You actually need nothing more than a bank account (which assumes you have a PAN and Aadhaar) to begin a SIP.
But it is advisable that you speak to a qualified financial advisor before investing.
(Disclaimer: This article is only meant to provide information. News9live.com does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.)
Mutual Fund investment: The SIP calculator is a tool to calculate where the power of regular and disciplined investments. If allowed sufficient time, it can create wealth that can actually defy one’s expectations. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
