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New Delhi. Every person wishes to have big money one day, so that he can meet his future needs. But, to do this you will have to wait for a long time. If you believe that time is money then you will have to spend more time to make more money. If you want to raise money for your child’s education or for your daughter’s marriage, then starting SIP in mutual funds can be a good option.
Suppose you have started investing in SIP i.e. Systematic Investment Plan with a small amount, then how much money can you generate from it in 20 years. The first rule of any investment is to determine your expenses and see how much money you can save every month. What most people do is that they spend first and then invest whatever is left. But, it should be done in such a way that first make a goal and invest and then proceed with the expenses.
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How much return on investment of Rs 5 thousand
Suppose you can save only Rs 5,000 from your expenses, then how much money can you save by this small investment for 20 years. Now if you get 12 percent annual return on SIP and invest Rs 5,000 every month, then the total investment amount will be only Rs 12 lakh. According to 12 percent return on this, you will get a profit of Rs 38 lakh and after 20 years your total amount will be Rs 50 lakh.
If you make a return of Rs 10 thousand you will become a millionaire.
Let us assume that you have saved 5 thousand more from your expenses and can open a SIP of 10 thousand rupees every month, then how much money will you save. Obviously if you have doubled your investment then its returns will also be double. That is, your total investment on SIP of Rs 10 thousand will be Rs 24 lakh in 20 years, whereas you will get a return of Rs 76 lakh on it and the total amount will reach Rs 1 crore.
If you increase time instead of money…
Let us assume that you do not have much money to invest and what if you can only increase the time. As we mentioned above that time is money…obviously, if you spend time instead of money on investment, you can still earn huge profits. Suppose you stay on SIP of Rs 5000 for 25 years instead of 20, then you will get Rs 95 lakh instead of 50, that is, your money will increase by Rs 45 lakh in just 5 years. Similarly, if you stay on SIP of Rs 10,000 for 25 years instead of 20 years, then this amount will become Rs 1.90 crore, which will give you a profit of around Rs 9 lakh in just 5 years.
Tag: business news, investment tips, mutual fund
first published : November 17, 2024, 1:36 pm IST
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