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Understand the power of compound:
Compounding is such a process in which returns on your investment start earning automatically. It is also called ‘interest on interest’ and for a long time this effect can increase your initial investment qualitatively. The longer the time of investment, the greater the benefits of compound.
How to save and make money through SIP:
Through SIPS, you regularly invest a certain amount in mutual funds. This promotes disciplined investment. This method not only reduces the effect of market volatility, but also helps investors to use the benefits of compound.
Let us understand how ₹ 7,000 monthly SIP can create a fund of ₹ 1 crore. Suppose the annual return rate is 12%, which is a reasonable estimate based on the historical performance of equity mutual funds.
Total investment: ₹ 18,48,000
Estimated return: ₹ 81,52,000
Total Fund: ₹ 1,00,00,000
These figures show that with regular monthly investment and estimated return rate, it is possible to create a fund of ₹ 1 crore in about 22 years.
Awadhi plays an important role in your investment. By starting early, your investment gets more time, which increases the benefit of compounding. For example:
Started at the age of 25: ₹ 1 crore at the age of 47 years
Started at the age of 35: ₹ 1 crore at the age of 57 years
₹ 15,000 monthly SIP: Get ₹ 1 crore in about 12 years
These examples show how the time to reach your financial goals can be affected by adjusting the investment amount. However, keep in mind that mutual funds are subject to investment market risks and real returns may vary. Therefore, it is advisable to spread your investment in different property classes to reduce the risk. Periodically evaluate and adjust your investment portfolio according to changing financial goals and market conditions.
Disclaimer: This article is only aimed at information and does not form financial advice. Investment in mutual funds is subject to market risks. It is advisable to consult a certified financial advisor before taking any investment decision.
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