SIP Investment: If you want to build a large fund by saving a small amount every month, SIP can be a strong option for you. It is often believed that becoming a millionaire requires a very high salary or a lump-sum investment, but SIP changes this perception. Time, discipline, and compounding play the most important roles in this.
Build crores with a ₹5000 SIP
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According to the SIP calculator, if a person invests ₹5000 every month and receives an average annual return of 12%, their investment value can exceed ₹1 crore in about 27 years. During this entire period, the investor invests a total of approximately ₹16.20 lakh, while the rest of the amount is generated through compounding.
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How is such a large fund created?
The secret is compounding. In the initial years, the growth of the investment seems slow, but over time, returns are earned on the returns as well. In the last few years, the fund has grown rapidly. Therefore, it is very important to stay invested in SIP for a long time.
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Is a 12% return possible?
In the long term, good equity mutual funds have given an average return of 11–13%. However, the market fluctuates, and there is no guarantee of returns. But investors who continue their SIP even during market downturns can benefit more in the long run.
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Can ₹1 crore be made in a shorter time?
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Yes, if you increase the monthly SIP amount, such as to ₹7000 or ₹10000, the goal of ₹1 crore can be achieved faster. Also, the earlier you start investing, the more you benefit from compounding.
Lessons for investors
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This example clearly shows that starting with a large sum of money is not necessary to become a millionaire. What is necessary is the right plan, patience, and continuing the investment for the long term. If you start a SIP of ₹5000 today and don’t stop it midway, your dream of ₹1 crore in the future could come true.