How to make Rs 4,000 monthly investment in SIPs to Rs 4 crore for secured retirement life?

Generally, if you look at the pay structure of a salaried class person, during the initial point of career, it is often low, most of the time between Rs 25,000- Rs 35,000. 

Once you start earning, expenses follow. From paying house rent to electricity charge, the bills keep on piling. And above all that, you need to think about short and long term goals. Short term goals could be buying a house or a car and at the same time, long term goal could be post retirement life. 

Amid all the expenses, it is important to start saving early. The simple formula of saving is out of your total monthly earning, keep one-third amount as savings. Supposedly, your salary is Rs 100, save atleast Rs 33 every month and spend Rs 99 on your expenses. What is important here to save and build a habit of saving.

Enter Systematic Investment Plan (SIPs) through Mutual Funds. This is how it works. 

Foremost thing which needs to be understand is, the investment amount should also increase yearly with the hike in salary.

Now, for instance you have just started earning say at the age of 27 years after completing your higher studies. You want to buy a house and at the same time want to have a secured post retirement life and your present salary is Rs 35,000. How much should you invest monthly?

As you have still 33 years for retirement, you can right now start with Rs 4,000 monthly investment in SIPs. Which means your total investment amount over the years will Rs 15,84,000 (Rs 4000* 33 years). 

Considering the rate of return at 13%, your total amount at the time of maturity will be Rs 2.62 crore. Clearly, your earnings on investment will be Rs 2.46 crore (Rs 2.62 crore- Rs 15,84,000). 

Invest monthly to avoid "month-end" nightmares