SIP Investment: If you start your SIP journey at the age of 30 with a monthly SIP of ₹16,500 and get an average annual return of 12%, you can create a fund of over ₹5 crore by the age of 60.
SIP Calculator: If you are 30 years old and want to create a fund of ₹ 5 crores by the age of 60, then you have to plan your money wisely from now on. With the habit of saving and right investment, even big financial goals can be achieved easily.
In such a situation, investing in mutual funds through SIP (Systematic Investment Plan) is an easy and good way. But the question is, how much amount will have to be invested in SIP every month to achieve this goal?
The answer to this can be found in a simple calculation, through which you can know how a fund of ₹ 5 crore can be created in 30 years.
SIP Calculator: SIP can create a fund of ₹ 5 crore in 30 years; know how
If you want to start investing in mutual funds, then first understand that the return in it is not fixed. But if an average return of 12% per annum is assumed (which can be obtained in good equity mutual funds), then you can accumulate a large amount from it. For example, if you invest ₹ 16,500 every month in mutual fund SIP and get an average return of 12% per annum, then in the long run a large fund can be created from it.
Suppose you make this investment continuously for 30 years. During this time your total investment amount will be ₹ 59,40,000. If the return is 12% annually, then after 30 years you can get a total interest of ₹ 4,48,96,058 on your investment. That is, the total fund will be ₹ 5,08,36,058.
It is clear from this calculation that in the long term, a fund of crores of rupees can be created from SIP, all you need is regular investment every month.
Why is SIP better for long term? Know in simple words
According to Sushil Jain, CEO of Personal CFO Consultants, SIP is an excellent option for long term investment. Its biggest advantage is the effect of compounding, which gradually makes the fund bigger over time.
By doing SIP for a long time, you can take advantage of market volatility and reduce the cost of investment on average. Also, you do not need to invest a large amount at once. You can gradually create a large fund by investing a small amount every month, that too with low risk.
For whom is SIP beneficial?
SIP is a good option for those:
- Those who do not have a lump sum amount, but want to create a large fund in the future.
- Those who have regular income every month and want to invest a part of it.
