The more you have money, the more your life can be secured. How much money is enough to secure someone’s life? People often dreaming about creating a fund of Rs 1 crore, which is easy to say but not easy to do. Through SIP investment, now you can make your dream true. How? This article will guide you.
The biggest advantage of a SIP is that it brings discipline to investing. A fixed amount is automatically deducted from your bank account each month, encouraging you to invest with consistency rather than emotion. You can also start a step-up SIP, where you increase your investment a little each year, just as your salary increases.
How does Step-Up SIP grow your money?
Suppose you started a SIP with ₹1,000 per month and earned a 15% CAGR return for 20 years, your corpus would be approximately ₹13.27 lakh. However, if you increased your SIP amount by 10% each year, such as ₹1,000 in the first year, then ₹1,000, then ₹1,210, and so on, increasing it by 10% every year, the same amount would grow to approximately ₹25 lakh in 20 years! This means that just a 10% annual increase could nearly double your SIP returns.
How to create a fund of Rs 1 crore?
If you invest Rs 7,500 per month in a SIP and earn a 15% CAGR, you can build a corpus of Rs 1 crore in 20 years. This means you can build this corpus by saving just Rs 250 per day. If you increase your SIP amount by 10% every year, you can reach Rs 1 crore in just 17 years. This means that with a step-up SIP, you can get three years ahead in the race to become a millionaire.
Things to keep in mind
Past returns of mutual funds are not a guarantee of future returns. Market fluctuations, economic conditions and fund management can affect returns. Always understand your risk profile and research funds before investing.
Desclaimer: For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.