SIP Investment: Typically, individuals aim to set aside a portion of their monthly earnings as savings to secure their future. However, due to increasing inflation, not everyone can manage to save money each month. Nevertheless, by creating a budget and adhering to it diligently, even saving Rs. 5,000 monthly can help you realize your aspiration of becoming a millionaire over time.
How a mutual fund can help you
Mutual funds generally offer an average return of 12 percent per annum. If you consistently invest in a Systematic Investment Plan (SIP) every month for 27 years at this rate, you could accumulate Rs. 1.08 crores. Throughout this period, your total investment would amount to Rs. 16,20,000, while the returns would be Rs. 91,91,565, resulting in a total of Rs. 1,08,11,565 (1.08 crores) in your account.
Understand the calculation
Conversely, if you increase your monthly savings to Rs. 10,000 instead of Rs. 5,000, you could achieve millionaire status in just 21 years. In this scenario, your total investment would be Rs. 25,20,000, with returns amounting to Rs. 79,10,067, leading to a total of Rs. 1,04,30,067 (1.04 crores) after 21 years.
The earlier you begin investing, the greater your benefits will be; thus, many financial experts advise starting to save at a young age to fully leverage the advantages of compounding over the long term.
But it is necessary to remember that Mutual Funds are subject to market risk. So read all the documents, terms and conditions carefully before make any investment.