How to give you an investment of ₹ 5000 every month, know how to give you a fund of more than 1 crore

News India Live, Digital Desk: Magic of SIP: In today’s era, everyone dreams of becoming a millionaire, but many people feel that millions have to be invested for this. But it is not true! If you are a smart investor and invest in a disciplined manner, then you can make a fund of more than Rs 1 crore even with an investment of just ₹ 5000 per month. Yes, we are talking about Systematic Investment Plan (SIP), which is the most popular and effective way of investing in mutual funds. Let’s know how SIP can make you a millionaire!

What is SIP and how does it work?

SIP (Systematic Investment Plan) is a way of investing in mutual funds, in which you invest a fixed amount (eg ₹ 5000) every month in a mutual fund scheme. It works exactly the same as the recurring deposit (RD), but the return is connected to the equity market. SIP has two big advantages:

1. Rupee Cost Average (Rupee Cost Averaging): When the market is down, you get more units, and when the market is up, less units are available. This average your investment cost and reduces the risk of market fluctuations.

2. Power of Compounding: This is the magic that makes your small investment a big fund. Returns on your investment also get returns, which increases the money rapidly.

How will the fund of more than ₹ 1 crore be made from SIP ₹ 5000 per month?

Let’s understand mathematics:
Suppose you have an average on SIP 12% per year return Get (this is a realistic estimate in equity mutual funds for a long time).

• Investment: ₹ 5000 per month

• Duration: 20 years

• Estimated return: 12% per year

  
  

total investment: ₹ 5000/month * 12 months/year * 20 years = ₹ 12,00,000 (twelve lakh rupees)
Estimated Corpus (Money on Maturity): About ₹ 49,95,744 (About 50 lakh rupees)

Now you must be thinking that it did not become 1 crore! So comes here the matter of magic – Period and power of returns!

If you extend the duration a little or the return is a little better then see what happens:

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