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SIP investment formula : Every parent starts worrying about the future of their child as soon as it is born. Nowadays lakhs of rupees are spent on a child's education and marriage. This expense will increase even more in the future. In such a situation, arranging so much money is a big responsibility. However, if you do financial planning for the future of the child as soon as it is born, then you can fulfill this responsibility very easily and well.
Know here the way by which you can save not lakhs but crores of rupees for your child. If you start this work as soon as your child is born, then your child will become a millionaire by the age of 18 years. For this you will have to invest in mutual funds with a formula. Let us tell you about it-
This formula will do wonders
This investment formula is 18x15x12. Under this formula, you have to start investing in mutual funds as soon as the child is born. You can easily invest in mutual funds every month through SIP. According to the formula, 18 means years, that is, you have to start SIP as soon as the child is born and continue it till he turns 18. 15 means SIP of Rs 15,000 and 12 means return. The average return of SIP is considered to be 12 percent.
How to add fund more than Rs 1 crore
Applying this formula, if you start a monthly SIP of Rs 15,000 in the name of your child as soon as he is born and continue it for 18 years, then you will invest a total of Rs 32,40,000 in 18 years. If we calculate the average return of SIP at 12 percent, then in 18 years you will get Rs 82,41,589 as interest on this amount. In this way, after 18 years, you will get a total of Rs 1,14,81,589 including the invested amount and interest. In this way, when your child turns 18, he will be the owner of Rs 1,14,81,589. In such a situation, you can easily fulfill all his needs with this amount.
Benefits of SIP
The benefit of compounding in SIP is tremendous. The longer the SIP is for, the greater will be the benefit of compounding. Its average return is 12 percent which is not available in any other scheme. Sometimes the returns are even higher than this. Apart from this you get the benefit of rupee cost averaging. Due to this, your expenses remain average even in case of market fluctuations. At the same time, there is flexibility in investment through SIP regarding investment period and amount. You can opt for monthly, quarterly or half yearly investment period as per your convenience. You can withdraw money from your SIP by stopping it whenever you need and increase the investment in SIP whenever you want.