There are many investment options, each with its own features. By investing in mutual funds through SIP, you can earn crores of rupees in long term.
Sometimes, earning money is easy, but saving and investing it in the right place takes a lot more effort. One of the most important fundamentals of investing is to start it early. Mutual fund experts even recommend that you start planning for retirement from the day you start working.
There are many investment options, each with its own features and importance. Investment advisors always recommend to start investing from an early age, as it gives you a longer investment horizon as well as more risk appetite. By investing in mutual funds through SIP, you can earn crores of rupees in long term. Remember that investing in mutual funds is goal based, meaning where you need money in many stages of life, you should invest keeping this goal in mind. Like buying a house, getting married, buying a car, children's education and then their marriage etc. If you want to go abroad, then you should invest through SIP for that too.
For now, we are showing you a rough calculation. Suppose you started investing through SIP at the age of 25. If you save Rs 5,000 every month i.e. 167 rupees per day and invest in mutual funds through SIP, then at the age of retirement i.e. 60 years, you will have a hefty amount of 11.33 crores. Remember that in SIP, you also have to keep increasing by 10% annually.
Let's understand this calculation
Monthly investment: Rs 5,000
Estimated Return: 14%
Annual SIP Increase: 10%
Total investment period: 35 years
Total investment: Rs 1.62 crore
Total Return: Rs 9.70 crore
Maturity amount: Rs 11.33 crore
So you saw how you can gather a huge amount of Rs 11.3 crore till retirement through just Rs 5,000 monthly SIP. But remember one thing that every year when your salary increases, you have to increase your SIP investment accordingly. Over a long period of 35 years, you get huge benefits of compounding. Mutual funds give you returns of 12-16 per cent per annum over the long term. When you keep increasing your investments every year, you will become a millionaire long before retirement, and by the time you retire, you will have accumulated enough money that you can live your life comfortably.
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