New Delhi: Nowadays, people are realising their dreams of becoming crorepatis through various hassle-free methods. If you are currently unemployed but aspire to become wealthy, do not worry; we are here to share a golden opportunity with you. Investing in mutual funds via a Systematic Investment Plan (SIP) is one of the best ways to build a substantial corpus over the long term.
Instead of making a lump-sum investment, depositing a fixed amount every month allows investors to benefit directly from rupee-cost averaging and the power of compounding. For instance, if you invest ₹5,000 monthly in a mutual fund SIP, an estimated average annual return of 12% could help you become a crorepati over a few decades.
You can see how much your capital can grow from a small investment over a 10-year period. A detailed calculation of this 10-year investment is provided below.
Find out: How much of a corpus will be created in 10 years?
If you invest ₹5,000 monthly in an SIP for 10 consecutive years, the calculation of your total investment and returns is detailed below. The monthly SIP amount is ₹5,000, the investment tenure is 10 years, and the estimated annual return is 12%.
Over 10 years, your total deposited amount will be ₹6,00,000. The total estimated return will be ₹5,61,696, bringing the total value after 10 years to ₹11,61,696. Notably, the returns earned on your deposits over these 10 years will almost equal your principal amount.
Rapid capital growth
Financial advisors recommend starting mutual fund investments as early as possible because the sooner you begin an SIP, the more time compounding has to work its magic. Additionally, when the market falls, you acquire more units; when the market rises, the value of your NAV (Net Asset Value) appreciates rapidly.
Important Points for Investors
Please note that investments in mutual funds via SIP are subject to market risks. The 12% return figure is calculated based on historical averages; actual returns may vary depending on market conditions. Therefore, you should periodically review your portfolio and select the right funds aligned with your goals, preferably in consultation with a financial advisor.
Government Schemes Prove Beneficial
People are earning substantial returns by investing in schemes run by the central government. By opening accounts under various schemes offered by banks, individuals invest their money and eventually receive a large lump-sum amount. You, too, can build a substantial corpus by investing in SIPs.
