Nowadays SIP in mutual funds is a medium of investment that is being liked a lot. Given the current market situation, the concerns of investors have increased, but a large fund can be created by regular investment in it. However, it is also important to know which mutual fund will be good to invest in according to your needs. If you too are dreaming of becoming a millionaire in 10 years, then this information is very important for you.
An equity fund is the best option
SIP in equity mutual funds is the best way to achieve long-term goals. The thing to keep in mind is that a large fund will be created only when you maintain the habit of investing. Discipline is very important in investing. Let us know how much you have to invest every month to create a fund of Rs 1 crore in 10 years. This scheme is ideal for those who want to achieve long-term financial goals.
12% annual return
If you want to create a fund of over Rs 1 crore in 10 years by investing every month without any lump sum amount, you will have to save Rs 45,059 every month. This means you will have to do a SIP of this amount in equity mutual funds every month. With an expected annual return of 12% on this investment, you will reach your goal in 10 years. This strategy demands patience and determination.
The magic of compounding
Investing in SIPs over a long period gives compounding a chance to show its magic. The results of compounding are sometimes so spectacular that it becomes hard to believe. Compounding means earning returns on the returns received earlier.
It is also called compound interest. Compounding helps to generate gradual returns on both principal and accumulated interest over time, which contributes to faster growth in the long term. Therefore, the power of compound interest sometimes gives such results that it becomes hard to believe. It is a powerful engine of financial growth.
This is how you will reach your goal
According to the SIP calculator, by investing Rs 45,059 every month for 10 years, the total investment amount will be Rs 54,07,080, the estimated return will be Rs 50,61,886 and the total value will be Rs 1,04,68,966. This means that you will be able to create a fund of more than Rs 1 crore in 10 years. To get the maximum benefit of SIP and compounding, there should be a long-term objective. Also, the sooner you invest, the more time your money will have to grow. This strategy is the perfect combination of time and patience.