Turn your Rs 100 per day into Rs 10.72 crore! Here is how to become a crorepati
Mutual Funds SIP: A small sum of just Rs 100 per day can turn you into a crorepati. The trick is to do it in a way that gets you maximum profit.
Mutual Funds SIP: Investing in the early phase of your career leads to the accumulation of wealth. This helps in setting up a financially secure life post-retirement or even during emergencies. For instance, coronavirus has cost many people their jobs, others' salaries have been cut and more people may lose their employment going forward. So, in this day and age, preparing for the worst is teh best strategy. Also, there can be chances when people start thinking of retiring around 55 years of age with a satisfactory amount of money in their bank.
The best way forward is Systematic Investment Plans (SIP of mutual fund houses. This has emerged as the most attractive investment tool among the earning individuals who are around 25 years of age who lack a lump sum amount to invest at one point in time.
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Speaking on the reason for the rise in mutual funds SIP among the earning individuals who are around 25 years of age, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "When you are young and in the early phase of your life, you have little savings. But, if you are sure about your long-term investment goal, then mutual funds SIP can help you achieve that long-term investment goal without requiring any professional help. These days, mutual funds SIP calculator is easily available via Google search. So, people can easily find out the monthly mutual funds SIP required to meet their long-term investment goals."
Asked about the mutual funds SIP returns they can expect in the long term, Jhaveri said that if the mutual funds SIP is for 10-15 years, at least 12 per cent return can be expected. However, if the period is for 25 to 30 years, then the return can go up to 15-17 pct even, depending upon the last 2-3 years of stock market performance before the maturity of the mutual funds SIP.
However, SEBI registered tax and investment expert Jitendra Solanki said that just sticking to the basics will give you returns that others are also getting. To become rich one should be able to get more returns with the same investment pattern. For that, you need some adaptation like stepping up your monthly SIP annually. Solanki was of the view that in general, one gets around 10-15 per cent annual increase in one's salary and hence he or she needs to increase one's mutual funds SIP as well. Increasing 15 per cent mutual funds SIP annually is an ideal way of getting a bigger maturity amount after the investment period.
Assuming 15 per cent mutual funds SIP returns in 30 years, suppose one starts a SIP of Rs 3,000 per month, one's maturity amount after 30 years will be Rs 2,10,29,461. In this without step-up technique, the mutual funds SIP of Rs 3,000 per month will grow up to Rs 2,10,29,461. In this Rs 2,10,29,461, the net investment done by the mutual funds SIP investor is Rs 10,80,000 while the wealth gained is Rs 1,99,49,461.
However, if someone adopts the annual step-up technique in one's mutual funds SIP, as per the mutual funds calculator, the same Rs 3,000 SIP for the period of 30 years giving the same 15 per cent returns will grow up to Rs 7,74,73,568. In this mutual funds SIP investment, net investment of the mutual funds SIP investor is Rs 1,56,37,884 while the wealth gained in 30 years of investment is Rs 6,18,35,684 that adds up to Rs Rs 7,74,73,568.
However, there are chances of the investor getting higher returns of up to 17 per cent if the stock market behaves normally in 3-4 years before the maturity fo the mutual funds SIP investment. In that case, the net maturity amount will be to the tune of Rs 10,72,57,314.
So, your Rs 3,000 per month or Rs 1,00 per day can grow up to Rs 10.72 crore provided you stick to the basics and follow the above-mentioned trick as suggested by the mutual funds investment experts.
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