SIP Fund Investment: Investment is not only for the upper class or middle class people. Street vendors and laborers can also invest easily. Many people think that a large amount of money is required to invest.
But it is not so. You can invest even by saving just Rs 100 daily. If you want to stay in investment for a long time, then Mutual Fund SIP is also an option. Here you can also create a fund of Rs 66 lakh in a long time. Let’s know.
The formula 3x12x12x20 will work.
If you want to build a fund of Rs 66 lakh in 20 years by investing small amounts, you can follow the formula of 3x12x12x20. In this, you have to start with an SIP of Rs 3 thousand per month. You have to invest this in a mutual fund with an average annual return of 12 percent for 20 years with a 12 percent annual step up. With this, you will have a fund of around Rs 66 lakh.
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What is an annual step up?
SIP has a feature of annual step up. In this, the investor increases the monthly SIP amount by a certain percentage every year. Suppose you started with a SIP of Rs 3000 per month and kept a 12% annual step up. So next year your monthly SIP amount will be Rs 3,360. Next year the monthly SIP amount will be Rs 3,763. Your income will also increase over time, so this SIP will not become a burden on you.
Invest like this
If you save Rs 100 daily, it will be Rs 3000 per month. You can invest this amount in Mutual Fund SIP. An average annual return of 12 percent is easily available in Mutual Funds. Now you use the formula 3x12x12x20. Start with an SIP of Rs 3 thousand per month. Invest in a fund with an average annual return of 12%. Keep the annual step up of 12% and keep investing for 20 years.
A fund of Rs 66 lakh will be prepared.
After 20 years of this investment, you will have a fund of Rs 65,97,288. In this, your investment amount will be Rs 25,93,888. Also, there will be an interest income of Rs 40,03,400.
