“If you are born poor it’s not your mistake, but if you die poor it’s your mistake,” said Bill Gates, iconic chairman of Microsoft.
While the common man cannot be expected to have acumen like Bill Gates, he can certainly create a corpus of well over Rs 1 crore – yes you read it right, more than a crore – if you dig in your heels and doggedly pursue disciplined investments into a class of instruments that allows you to harvest the fruits of the equity markets in India.
Be dogged
But before you continue reading, here is an important rider – there is no quick fix for creating wealth. Patience and unwavering commitment to regular investments are the pillars of success.
Let’s see how. Let’s assume that the average lower middle-class household can invest about Rs 3,000-5,000 every month.
Power of Rs 3,000 SIP
If you keep on investing Rs 3,000 for 30 years without a break, you will end up making nothing less than Rs 1.05 crore, and that too assuming a modest return of 12%.
By the way, you would invest a total of Rs 10.80 lakh from your pocket.
Rs 4,000 a month
Now raise the investment per month to Rs 4,000 and see the result.
The SIP calculator will tell you that this investment will fetch a cool Rs 1.4 crore on a nominal investment of Rs 14.40 lakh.
Rs 5,000 a month
If you can invest Rs 5,000 a month you would move towards Rs 2 crore – netting Rs 1.75 crore.
If the mutual funds perform a little better, moving close to Rs 2 crore mark in entirely possible.
To get the maximum effect out of mutual funds, one should begin SIPs as early as possible.
Begin in school
Ideally, college or high-school students can begin with their pocket money and increase the amount as they begin earning.
Another point to remember is, that you should invest only that amount in SIP which you can comfortably continue without straining your finances so that you can continue it for a very long term.
(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.)
Accumulating wealth is not difficult if you know how to harness the immense power of compounding to your advantage. A mutual fund is an instrument that allows you to achieve it spectacularly over the long term. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
