If you are considering investing in SIP, then this article is perfect for you. Frequently individuals hesitate to begin a SIP despite planning for it, yet have you considered the possibility of gaining wealth through SIP? Yes, it is completely feasible. To do this, you must set up a consistent SIP, which stands for systematic investment plan. Allow us to explain the process of generating a fund worth Rs 2 crore by employing the 12x12x24 SIP strategy.
Familiarize yourself with the SIP formula of 12x12x24
If you are at the age of 25 and you decide to invest Rs 12,000 monthly in a mutual fund offered by a company, then you will need to continue investing the same amount every month for a total of 24 years. You can expect an annual return of 12% from this investment. Investing in mutual funds through SIP typically yields returns between 12% and 15%, but we aim to clarify this equation for you at the most affordable interest rate. If you opt for a long-term SIP plan, you will accumulate a significant amount of funds over a period of 24 years. Your final sum will be Rs 2,00,72,246, which accounts for 12 percent. That means you will receive a sum of approximately 2 crores.
Advantages of putting money into Systematic Investment Plans
A structured investment plan (SIP) in mutual funds enables investors to regularly invest a set amount in mutual funds. In this scenario, a set sum of money must be put into a mutual fund that you select on a specific day each month. Investing in SIP allows you to take advantage of compounding interest, which ultimately boosts your returns. It’s essentially the yield on your investments in equity mutual funds. In addition, you may utilize the monthly deposits as an emergency fund if necessary.
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