Everyone dreams of becoming a millionaire, but did you know that you can achieve this dream through SIP mutual funds? By investing just ₹2,000 every month through SIP, you can build a significant amount by the time you retire. However, you need to follow a special formula to make this happen. Let us explain how you can accumulate ₹3 crore by investing ₹2,000 in SIP.

10/35/12 Formula: A Path to ₹3 Crore Through SIP

To accumulate ₹3 crores, you need to follow the 10/35/12 formula:

  • 10 refers to a 10% annual top-up. You start with ₹2,000 but increase it by 10% every year.
  • 35 represents 35 years of SIP.
  • 12 refers to the expected 12% annual return on your investment.

How SIP with ₹2,000 Can Make You a Crorepati

If you start your SIP with ₹2,000, increase it by 10% annually, and continue for 35 years with an average return of 12%, you could accumulate ₹3 crore by the end of the 35 years.

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Understanding with an Example

Let’s say you start an SIP of ₹2,000 at age 25. Each year, you will add a 10% top-up to the previous year’s SIP amount. Here’s how it works:

  • In the first year, you invest ₹2,000.
  • In the second year, you increase the amount by 10% (₹200), making your SIP ₹2,200.
  • In the third year, you increase it by 10% of ₹2,200 (₹220), making your SIP ₹2,420.

You will continue adding 10% to your SIP every year.

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Total Investment Over 35 Years

In this way, over 35 years, your total investment will be ₹65,04,585. Assuming an annual return of 12%, you will earn ₹2,50,25,068 from interest alone. Your total corpus will grow to ₹3,15,29,653.

This calculation is based on the assumption of an average 12% return, which is typical for long-term SIPs.