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Mutual Fund SIP: It is wise to start retirement planning right from the beginning while working in a private job. This way you get a good amount of time for investing and you can easily fill your coffers for old age. Today, there are many schemes in which you get the benefit of compounding. In such a situation, the longer you invest, the more money you will be able to save.
Mutual fund SIP is one of those schemes. Despite being market linked, this scheme has become quite popular. The risk in this is less as compared to investing money directly in shares. Also, the benefit of rupee cost averaging is available in the long term. The average return of SIP is considered to be 12 percent. In such a situation, with the help of this scheme, wealth creation of investors happens rapidly. If you want, you can start with just Rs 2000 and add crores of rupees through SIP.
know what to do
If you are investing in SIP, then you have to start investing in it along with the job. Suppose you start investing at the age of 25, then you will get 35 years to prepare a retirement fund because you will invest till the age of 60. Apart from this, one thing you have to do to make money fast is that you have to put a top-up of 10 percent on the investment amount every year. For example, if you start investing with Rs 2000 at the age of 25, then you have to deposit Rs 2000 for one year and increase the amount by 10 percent next year. In this way, as your salary increases year after year, you will have to increase the investment amount by 10 percent every year.
Understand with an example
Suppose you start a SIP of Rs 2000 at the age of 25. After starting, you will have to deposit only Rs 2,000 in this account for the whole year. Next year you will have to increase it by 10 percent of Rs 2000 i.e. Rs 200. In this way, next year this SIP will become Rs 2,200. Next year you will have to increase it by Rs 220 at the rate of 10 percent of 2,200, in this way your SIP will become Rs 2,420. In this way, every year you will have to increase 10 percent of the existing amount and you will have to do this continuously for 60 years.
This way ₹3,55,33,879 will be added
If you invest in a SIP starting from Rs 2000 by making an annual top-up of 10 percent for 35 years, then your total investment will be Rs 65,04,585. If you assume an average return of 12 percent, then you will get Rs 2,90,29,294 from interest alone. After 35 years, you will have a total of Rs 3,55,33,879 including the amount invested and the interest. On the other hand, if you get 15 percent interest on this investment, then the profit will almost double and you will have a total of Rs 6,70,24,212.