Turn Rs 33.33 per day investment into Rs 3,94,967! Check smart way to make money
If someone chooses to invest Rs 33.33 per day regularly over a period of time, he or she will get, after compounding, a sum of Rs 3,94,967 and perhaps even more!
Ho to turn a small amount of money into a big sum? That is a question on every man's mind and here is a solution that will create great wealth. While bank fixed deposits or Post office schemes are still popular investment options, Mutual Fund investment has emerged as one of the most preferred investments over the last decade for people to make great profit on their money. As a result of this, according to the Association of Mutual Funds in India (AMFI), Mutual Fund investments has reached Rs 24.51 trillion by 30th September 2019. Over the next decade, the Mutual Fund industry aims to grow four times this amount. This is possible because now mutual fund investors have started to realise the importance of long-term investment and how it helps to increase the returns through compounding.
Elaborating upon the compounding benefits investors avail Poonam Rungta, Mutual Fund expert at LJ Business School said, "You may choose to invest Rs 1,000 every month in a mutual fund for the next ten years and at a rate of 8 per cent per annum. So, you will notice that your investment of Rs 1,20,000 in 10 years gave you a return of Rs 1,82,946. Now if you choose to invest it further for say another ten years, the money now reinvested will grow even faster and give you Rs 3,94,967. This is the unique thing about compounding where the existing investment, along with the returns on this investment and the new investment each month, all contribute towards further gains." Means, if you invest Rs 33.33 per day in SIP, you can turn your Rs 1.2 lakh per year into Rs 3,94,967 in the above-mentioned time period.
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On how does mutual fund compounding helps an investor Kartik Jhaveri, Manager — Wealth Management at Transcend Consultants said, "In mutual fund compounding, money that is generated in the form of capital gains is reinvested to create additional returns." However, Jhaveri said that for a long-term mutual fund investment i.e. more than 10 years, an investor would easily get a double-digit return on his or her investment. He said that in ten years, a mutual fund investor would get at least 12 per cent returns on his or her mutual fund SIP.
So, this small investment has the potential of giving you a much higher profit than the sums mentioned above.
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