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News India Live, Digital Desk: Do you think that to become rich one has to start investing with a huge amount? If yes, then you are wrong. In today’s time, there are many great ways of investment, where you can create a big fund even by making small savings. One of the best ways is Systematic Investment Plan (SIP)which is also called SIP in common language.
If you can save even just ₹2000 from your salary or earnings every month, then this small amount can make you the owner of more than ₹7 lakh in future. Let us know everything about this scheme.
What is this magic of SIP?
SIP is not rocket science, rather it is a disciplined way of investing in mutual funds. In this, you invest a fixed amount every month, say ₹ 2000, in the mutual fund scheme of your choice. This is exactly the same as when you make a Recurring Deposit (RD) in your bank, but here you have the possibility of getting much higher returns than the bank.
The biggest advantage of SIP is Power of CompoundingThis means that you not only get returns on the money you invest, but also the returns on that return, Over time, these small returns add up to a huge amount,
How will ₹2000 per month become ₹7 lakh?
Let us now calculate how this is possible. Investing in mutual funds for a long term can yield an average annual return of 12% to 15% (depending on market performance and not guaranteed).
- Investment: ₹2000 per month
- Estimated Returns: 12% per annum
- Duration: 12 years
Now let’s look at the calculations:
- Your total investment in 12 years will be: ₹2000 x 12 months x 12 years = ₹2,88,000
- But with an expected return of 12%, this amount will grow to approx. with the power of compounding. ₹7,53,195 It will be done.
This amount is more than Rs 7 lakh. If you continue this investment for a few more years, this fund will grow even faster.
Where and how to invest this?
You can start SIP in equity mutual funds of any good mutual fund company (AMC). If you want, you can take the help of a financial advisor or you can easily open your SIP account through many trusted online apps these days (like Groww, Zerodha Coin, Upstox etc.). For this you have to complete the KYC process, in which your PAN card and Aadhar card are required.
Then what are you waiting for? Take the first step towards turning your small savings into big wealth today. Investing just ₹2000 every month can make your future financially secure.