In most investment instruments, the most powerful tailwind to amass a big amount is allowing it time to multiply. A long time can work wonders even if with moderate amounts of investment. PPF, or Public Provident Fund, illustrates this impact of time effectively.
The idea behind PPF is to start investing early in life and ensuring that one can invest month after month, year after year in a disciplined manner. In this way it is possible to become a PPF crorepati, or even a multi-crorepati!!! Following the tips mentioned below is crucial in achieving it.
How to become a PPF crorepati
Let us assume that a person begins investing at the age of 20. He/she puts in Rs 12,000 every month, or in other words Rs 1,44,000 every year. As we have discussed earlier, the longer the investment journey, the longer the wealth generation. Any PPF calculator, which are freely available online, will show you the calculations. If this person continues to invest Rs 1.44 lakh every year, he/she would sail past Rs 2 crore by the 34th year. In other words, he/she would be aged 54 years when the target of Rs 2 crore is achieved.
The out-of-pocket nominal investment from the investor will be Rs 48,96,000 while the interest component will stand at Rs 1,53,05,418. This would generate a total amount of Rs 2,02,01,418, or more than Rs 2.02 crore. Now consider this possibility – the person continues the same rate of investment for 40 years. And, lo and behold, after 40 years – by the time he/she turns 60, the PPF account will have nothing less than Rs 3 crores – actually Rs 3,15,93,274, of which Rs 2,58,33,274 is the interest component.
How much will I get after 15 years in PPF
Please note that 15 years is the initial lock-in period for PPF. If one invests Rs 1.5 lakh, which is the maximum one can do in a financial year, one can generate a total amount of Rs 40,68,209, of which the interest component is Rs 18,18,209. It is clear that if one has the patience to continue investing, he or she will generate crores in the most secured manner possible.
Though it might appear incredible, it is not only possible to create a corpus of Rs 1 crore in PPF crorepati, but also possible to go far beyond that figure and even double the value of your investments. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
