SIP Investment Plan: Along with earning money, Indians also keep looking for investment options that give good returns. Although there are many investment options available in the market, people have to do research to fulfill their needs and financial goals.
If you are also working on a plan to create a fund worth crores of rupees, then you must know about the Systematic Investment Plan (SIP) of mutual funds. Under SIP, your money grows faster and you also get interest on the interest earned on the money. If you want to create a fund of Rs 5 crore in 30 years through SIP, then you should plan your investment in this way.
How will a fund of Rs 5 crore be created?
If you want to create a long term corpus of Rs 5 crore through SIP, then first of all you have to choose the right fund. While choosing a fund, one has to choose such a fund available in the market, which has the potential to give an annual return of 12 percent. Many funds present in the market give higher returns than this, but to understand this entire calculation, we proceed by assuming an average of 12 percent.
Now suppose you start a SIP of Rs 15,000 every month in a good fund. You continued your investment for 30 years. If you get an average annual return of 12 percent on this investment, your total corpus can be more than Rs 5 crore. In this your total investment will be Rs 54,00,000 and the remaining Rs 4,75,48,707 will be added only as interest. That means, with the power of compounding, your investment will reach this figure.
However, investing in SIP depends on the market. It is possible that your returns may also be less. Therefore, the decision to invest should be taken only after taking complete information about the market and taking suggestions from your investment advisor.
Disclaimer: (The information provided here is being given for information only. It is important to mention here that investment in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.)
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