SIP Calculation: Who wouldn’t want to become a millionaire? But if the income is limited it is not so easy. However, if you invest systematically, it is not that difficult. However, through SIP you can fulfill your dream of becoming a millionaire in just a few years. SIP i.e. Systematic Investment Plan is a way of investing in mutual funds, where you invest a fixed amount every month, on which you get compound interest and you accumulate more funds in less time.
How to become a millionaire by investing Rs 150?
SIPs promote financial discipline, which means you have to keep investing continuously. On this, you get wealth gain through the magic of compounding. SIP, which gives high returns in a tenure of 15 years, proves helpful in raising big funds. Past returns of mutual funds show that if you invest Rs 150 in SIP every day, you will accumulate Rs 1 crore. Some funds have given an average return of 25 percent annually in 15 years. Let us see how depositing Rs 150 every day or Rs 4,500 per month through SIP can create a fund of Rs 1 crore.
Target- Rs 1 crore
Time- 15 years
Expected Return – 25 percent
Daily Investment- Rs 150
Invested amount- Rs 8,10,000
Actual return – Rs 79,91,031
Total value- Rs 88,01,031
Do not leave investment midway
The returns may seem slow in the beginning, but as time passes, the returns on your investment also start earning. This is called the ‘power of compounding’. With this, even a small amount over a long period of time can create a big fund. The sooner you start SIP, the longer you will continue to get the benefit of compounding. However, during this period, do not stop SIP midway due to fluctuations in the market. To start SIP, first choose your favorite mutual fund and decide how much money to invest every month and for how long. On the basis of the fixed amount, you will get units of that fund and with compounding, your invested money will increase.
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