SIP Calculation: SIP means investing a fixed amount every month, if you want to create a fund of 3.5 crores, then you will have to invest ₹5000. The most special thing about this SIP investment is that it is a cost averaging investment, meaning even if the market falls, you are given the facility to buy more units and even if the price of the unit rises, there is still profit. This SIP investment is a long term investment, due to which the power of compounding interest also works very well.
In today’s article, we will tell you about such a SIP scheme where if you start doing SIP of ₹5000, then you can collect a fund of 3.5 crores by retirement. Yes, this is not fake news but the principle of power of compounding interest. According to this principle, if you invest ₹5000 every month today, then after disciplined investment, you will get a fund of 3.5 crores by the time of retirement.
SIP Calculation – Earn 3.5 Crores By Investing 5000 Per Month
If a person invests ₹5000 every month in SIP at the age of 30 and continues to invest till the age of 60, then he will have to invest ₹60,000 annually on the basis of ₹5000 every year. ₹60000 annual investment means an investment of 18 lakhs for 30 years. If we assume a 15% return on this 18 lakhs, then by the age of 60, a fund of 3.5 crores gets accumulated in the investor’s account. Although sometimes this return rate can be higher and sometimes lower, but in long term investment the average return comes around 3.5 crores.
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What Is Important To Keep In Mind Before Starting SIP Investment?
Before starting SIP investment, it is important to see the performance of the fund, for which you can check the track record of the last 5 to 15 years. Apart from this, you will have to explain the market so that you can go deeper into the performance of the fund. After all these decisions, you will have to choose the category of the fund such as large cap, mid cap, small cap, flexi cap etc. After choosing the fund option, you will have to choose the fund keeping in mind the expense ratio and return.
Precautions To Be Taken Before Starting SIP Investment
If you invest in SIP, then first of all you have to keep in mind that do not stop investing even if the market falls because it is a long terminvestment which is beneficial in the long term. There is an opportunity to buy more units in the fall, so never stop SIP in between. During SIP, always increase the contribution under the enhanced structure i.e. increase the contribution amount by some percentage every year. And always set a target for your investment so that the motivation remains intact and long term benefits are definitely achieved.