To achieve financial goals, it is very important to make right investment at the right time. If you are 30 years old and you want to reach ₹ 2 crore at the age of 55, then this dream can be fulfilled through your monthly SIP i.e. Systematic Investment Plan. To achieve this goal, you need to know how much SIP you have to do, and what kind of investment strategy should be adopted for it. Know the answer to this question and how you can make your financial planning smart.
Why invest in SIP?
SIP is a great way of investing, which provides a disciplined and systematic way to invest in mutual funds. Through SIP, investors can invest a fixed amount in a mutual fund scheme at regular intervals, thereby maintaining consistency in their investments and also reducing risk. Investing under SIP can start from as little as ₹100, and investors can decide the investment interval as per their convenience. This could be daily, weekly, monthly or annually.
This method is especially ideal for investors who expect big returns over the long term by making small investments. Another important feature of SIP is the power of compounding and costing average. Over time, your investments grow and help you earn better returns. So, if you are planning to build wealth in the long term, SIP can be an effective and smart approach.
There is no limit on returns in mutual fund schemes.
With how much monthly SIP will the target of ₹ 2 crore be achieved?
First of all, understand here that there is no limit on returns in mutual fund schemes. It depends on the market performance. You can get very high returns also. But let us assume an average return of 12 percent and understand this calculation on this basis. According to angelone SIP calculator, if you invest ₹ 10,540 every month in SIP today at the age of 30 on the basis of 12 percent annual return, then at the age of 55 you will have a total of ₹ 2,00,01,074. That means your target will be accomplished. Here, understand that according to this calculation, you invest a total of ₹ 31,62,000 in 25 years and you get ₹ 1,68,39,074 as return on it, which together comes to ₹ 2,00,01,074.
Some special things related to investing in SIP
SIPs can be structured on any type of fund. You can do SIP in equity funds, debt funds, hybrid funds. When you invest through SIPs, you invest in different market cycles (bullish and bearish), but your monthly investment remains the same. SIP, based on NAV, accumulates more units when prices are low in a bearish market, and buys fewer units when prices are high. This is called rupee cost averaging.
(Disclaimer: This is not an investment advice but just an information. Consult your financial advisors before taking any decision related to money.)
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