Business News / You too can create a fund of Rs 4 crore, with an investment of Rs 100 daily - Jaan

Business News: It is a good habit to start investing early in your career. The sooner you start your financial planning, the sooner you will achieve your financial goals. Market linked returns attract new age investors as they provide good returns as compared to guaranteed return investments where the interest rate is fixed. Mutual fund investing has emerged as a popular investment option in the last five years. If you want to earn money through SIP then long term strategy is the best way.

Exact Formula of SIP

You will have to invest in mutual funds for 30 years. If you get an estimated return of 15 percent, then the path to becoming a millionaire becomes very easy. The biggest benefit is compounding, which means, at the end of each investment cycle, your total amount, including returns, becomes your principal. Since the principal amount changes every year, a return of 15 per cent every year can help you build a bigger corpus. What is more important here is to know about the exact SIP formula, which will add value to the SIP. This formula is known as Step Up SIP. You just have to maintain the step-up rate of 10 percent every year.

Step up SIP will decide the destination

• You are 30 years old. Save Rs 100 daily and invest in mutual funds through SIP.
• Have an investment strategy aimed at 30 years. Keep doing 10 percent step-up every year.
• If you start with Rs 3000, then next year you will have to increase it by Rs 300.
• After 30 years your maturity amount will be Rs 4,17,63,700 (4.17 crore).
• According to the SIP calculator, your total investment in 30 years will be Rs 59,21,785 (Rs 59.22 lakh).
• There will be capital gain of Rs 3 crore 58 lakh 41 thousand 915 here.
• This is the magic of returns in SIP. In this way, with the help of step-up formula, you will have a huge fund of Rs 4 crore 17 lakh.