Public Provident Fund, SIP investment: Here's how you may become crorepati
How to become crorepati with Public Provident Fund (PPF), Mutual Fund SIP: Everyone wants to become rich. But it is not something that can be done overnight.
How to become crorepati with Public Provident Fund (PPF), Mutual Fund SIP: Everyone wants to become rich. But it is not something that can be done overnight. Just like students, who try to mug up the entire book a night before the exam, don't become toppers, getting rich also does not have a quick fix. Even a multi-billionaire like Warren Buffet took years to reach where he is now. Not many know that once upon a time, the legendary 'Oracle of Omaha' used to deliver newspapers of The Post in Washington, earning $175 a month. The money was enough for Buffet to figure initially he didn't have to go to college.
What is interesting about Buffet's journey is that he started developing a knack for earning money and growing it at a very early age - almost in his teens. In this story, also lies the key to creating wealth - Start Early, Save, Invest Wisely and See Your Money Grow!
In India, becoming a crorepati is on almost everyone's mind. In a country where salaries are low, jobs uncertain, and new earning opportunities rare for most of the population, no financial pundit can give you a magic wand to become a crorepati. Nevertheless, there are some humble, risk-free products that can help you reach the goal over a period of time.
CEO of Hum Fauji Initiatives Col. Sanjeev Govila (retd) recently told Zee Business TV that patience is the key to becoming a crorepati. One can reach the financial goal by making small investments in products like FDs, PPF, SIPs with patience over a period of time. He said that an investor should never let his/her emotions interfere as problems start the moment this happens.
Take for example PPF and SIP:
Currently, PPF offers an interest rate of 8% per annum, which is compounded annually. If the interest rate remains the same, you can accumulate Rs 4,398,642 in 15 years, and over Rs 1.1 crore in 25 years. The PPF account comes with a lock-in period of 15 years and offers tax benefits on the deposited amount, interest earned and the amount accumulated. The PPF account can be extended in blocks of five years each.
Watch this Zee Business video
Similarly, with SIP, one can generate Rs 1 crore by investing Rs 10,009 per month in 20 years, shows SBI online SIP calculator. To get the same amount in 15 years, one would have to spend Rs 19,819 per month.