Kolkata: SIP or Systematic Investment Plan has turned out to be the preferred investment instrument for millions of Indians and for good reason. One can plan investments according to one’s savings and take advantage of immense compounding power over the long-term to build significant wealth dovetailed to serve one’s financial goals.
Taking recourse to the SIP route to fulfil one’s crorepati dreams is not difficult. One can consult a qualified personal finance advisor and seek an equity fund that is performing, has a sound track record and a robust portfolio that is geared towards capital appreciation. Then one can take the help of an SIP calculator to find out how long will he/she need to amass one crore of rupees with a monthly SIP contribution of Rs 20,000.
SIP calculator
Let us take the example of a person who starts investing Rs 20,000 every month in mutual fund SIPs. An online mutual fund SIP calculator will tell you that if this person maintains the investment with discipline he/she will take 15 years to move past the amount of Rs 1 crore. In 15 years. he/she will invest a total of 36 lakh and the final amount will be in the region of Rs 1.01 crore. However, this calculation considers a return of 12%, which is the template return in a mutual fund calculator.
It is quite obvious that if the rate of return increases, the investor will reach the target of Ra 1 crore faster than 15 years. One can keep tweaking the rate of return to find out what tike will the kitty take to rise above the value of Rs 1 crore and at what rate of return. If one can clock a rate of return of 13%, the kitty will take less than 15 years to reach Rs 1 crore. However, if one is fortunate to get a return of 14%, the amount in the SIP account will reach Rs 1,04,39,080 on the same SIP of Rs 20,000.
Now consider a situation when the returns touch 15%, which is generated by several funds in the long term. In that case one will need a little more than 13 years to reach an amount of Rs 1 crore. Alternatively, one can consider investing a lesser amount every month to reach the goal of Rs 1 crore with a higher rate of investment.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, any form of alternative investment instruments and crypto assets.)
It is not for nothing that the SIP (Systematic Investment Plan) in mutual funds has become the preferred tool for investment for the average common Indian. It combines convenience of investing in a bewildering variety of mutual fund schemes to build long-term wealth. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
