SIP Investment / A fund of 50 lakhs will be deposited by investing 10 thousand rupees, know how?

SIP Investment: In today's era, inflation is increasing rapidly, due to which it has become very important to plan in advance for future financial security. If you do not add money in time, then you may have to face many difficulties in the coming time. But with a little understanding and discipline, you can create a big fund by saving a fixed amount every month. The easiest and most effective way to do this is to invest in mutual funds through SIP (Systematic Investment Plan).

What is SIP?

SIP i.e. Systematic Investment Plan, is an investment option in which you invest a fixed amount in mutual funds every month. It is ideal for those who cannot invest a large lump sum amount, but want to gradually increase their wealth. The specialty of SIP is that it promotes disciplined investment and helps you deal with market volatility.

How to create a fund of ₹ 50 lakh with SIP?

Let's understand with an example. Suppose you start a SIP of ₹10,000 every month and you get an average annual return of 12%. If you continue this for 15 years, your total accumulated capital can be around ₹50,45,760. This means that by investing a total of ₹18 lakh (₹10,000 × 12 months × 15 years), you can create a fund of more than ₹50 lakh. This calculation is based on the principle of compounding, which is the biggest advantage of SIP.

The magic of compounding

• The biggest advantage of SIP is compounding. In this, not only do you get a return on your original investment, but you also get the next return on that return. This is the reason why investing for a long period can increase your wealth manifold. For example:
• If you start a SIP at the age of 25, you can have a large fund ready by the time you retire.
• If you start at the age of 40, you may have to invest a larger amount to achieve the same goal.
• So, the sooner you start investing, the more benefits you will get.

Benefits of SIP

• Disciplined investing: SIP makes you get into the habit of saving regularly every month.
• Flexibility: You can start SIP with a small or large amount according to your income.
• Rupee cost averaging: In market fluctuations, SIP gives you an opportunity to buy more units at a lower price, which keeps the average cost low in the long run.
• Long-term benefit: The longer you invest, the more you get the benefit of compounding.

What can you achieve with SIP?

• Through SIP, you can fulfill many of your big financial goals, such as:
• Buying a house: Raise the down payment or the full amount to buy your dream home.
• Children's education: Create a large fund for children's higher education.
• Retirement Planning: Ensure financial independence after retirement

The right time to start

If you start a SIP at the age of 25 or 30, you will get long-term benefits and can build a large corpus with a small amount. Starting late may require you to invest more to achieve the same goal. So, don't waste time. Get in touch with a financial advisor today and start your SIP.