How to become a millionaire with SIP? 30.80 lakh will be made in 30 years from 1000 rupees per month, know the full mathematics

Do you also think that it already requires a lot of money to make big money? If yes, you're wrong. You can create a property worth lakhs of rupees from 500 or even 1000 rupees. All you need to do is be disciplined and make time your companion. Today we will explain to you by the example of two people how even a very small amount of money can make you a big amount - If you start investing early and stay for a long time. Let's understand the whole math.

Rs 1000 vs Rs 2000 What's the difference in 10…
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Rs 1000 vs Rs 2000 What's the difference in 10 years?

Suppose person A invests 1000 rupees and person B invests 2000 rupees. Both invested money in mutual funds through SIP for 10 years and both got 12% return annually in 10 years.

Person A (₹1000 / month) invested a total of ₹1,20,000 in 10 years and got a return of ₹1,04,036, taking his total corpus to ₹2,24,036. Person B (₹2000 / month) invested ₹2,40,000 and got a return of ₹2,08,072, taking his total corpus to ₹4,48,072. That is, exactly twice the return on investment - Within 10 years, a SIP of ₹1,000 made ₹2.24 lakh and a SIP of ₹2,000 made ₹4.48 lakh.

20 years of magic: How to increase the difference?
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20 years of magic: How to increase the difference?

Now suppose the time period is increased to 20 years instead of 10. In 20 years, person A (₹1000 / month) will invest a total of ₹2,40,000 and will get a return of ₹6,80,000, taking his total corpus to ₹9,20,000. Whereas Person B (₹2000 / month) will invest ₹4,80,000 and will get a return of ₹13,60,000, taking his total corpus to ₹18,40,000. That is, in 20 years, SIP of ₹1000 makes ₹9.20 lakh and SIP of ₹2000 makes ₹18.40 lakh.

30 years:. The real miracle is seen here
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30 years:. The real miracle is seen here

In 30 years, this gap becomes even larger. Person A (₹1000 / month) will invest a total of ₹3,60,000 and will get a return of ₹27,20,000, taking his total corpus to ₹30,80,000.

Whereas Person B (₹2000 / month) will invest ₹7,20,000 and will get a return of ₹54,41,000, taking his total corpus to ₹61,61,000. That is, in 30 years, SIP of ₹1000 makes ₹30.80 lakh and SIP of ₹2000 makes ₹61.61 lakh.

The most surprising thing is that the total return on SIP of ₹1000 in 30 years is ₹27.20 lakh, while the total investment is just ₹3.60 lakh - that is, the total return is 7.5 times more than the investment!

Retirement plans: What about starting at the age of 30?
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Retirement plans: What about starting at the age of 30?

If you start a SIP of ₹2000 a month from the age of 30, then by the age of 60 i.e. in 30 years, you will have a corpus of ₹61.61 lakh. If you invest this money in FD, you will get ₹5.10 lakh interest every year on the interest of 8.5%. That is, an average of ₹42,500 will be earned every month without any risk - and your principal will be safe.

If you start a SIP of ₹1000 a month, a corpus of ₹30.80 lakh will be created in 30 years, on which 8.5% FD interest will earn ₹21,800 every month.

Early start fund
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Early start fund

The basic fund to get rich from SIP is an early start. The earlier you start, the more funds you'll be able to build - because the magic of compounding gets even more powerful over time. If you start SIP of ₹1000 a month from the age of 20, then in 40 years this amount can be more than ₹1.17 crore. You don't get the same benefit if you start late, even if you put in more money.

You can start with $500.
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You can start with $500.

If you can't invest ₹1000 or ₹2000 a month, you can start with ₹500. A ₹500-month SIP can create a corpus of ₹15.40 lakh at a 12% return over 30 years - which is not low at all. If you invest the same ₹500 from the age of 20, you can become ₹58.56 lakh in 40 years.

Is there a return of 12%?
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Is there a return of 12%?

The 12% annualized return here is just one example. According to the data of the last 15-20 years, good diversified equity mutual funds have given an average return of 12-15%. However, this is not a guarantee -

The market fluctuates and returns can vary from year to year. But in the long run (more than 10-15 years) the market fluctuations become average and the chances of getting good returns increase.

You can start investing at any age
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You can start investing at any age

Even if you are 30, 40 or 50 years old, there is no delay in starting investing. SIP is flexible - You can start at any age, start at any amount, and even stop when you need to.

This is its main feature. SIP of ₹5000 per month at the age of 40 can make ₹46 lakh at 12% return in 20 years, which can come in handy after retirement.

Conclusion
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Conclusion

The biggest advantage of SIP investment is that you do not need a large amount of money. Starting from 1000 rupees a month, you can create a property of more than 30 lakhs in 30 years. This amount doubles from ₹2000 per month.

The magic of starting early and the power of compounding can make you rich, provided you maintain discipline. So why late? Start your first SIP today... Even if it's only $500. Stay tuned to timesbull.com for more such financial information, investment tips and easy ways to save money.

Disclaimer: Mutual fund investments are subject to market risks. Read all the documents carefully before investing. The figures and calculations given in this article are for illustrative purposes only. Any future returns are not guaranteed. Always consult your financial advisor before making any investment decisions.