How to become rich: Your ₹5000 monthly SIP can help you grow ₹5.22 crore. Mutual fund calculator explains
SIPs offer a pathway to long-term wealth accumulation and the attainment of financial goals. Kartik Jhaveri, Director of Wealth at Transcend Capital, emphasises the potential for long-term wealth accumulation through mutual fund Systematic Investment Plans (SIP). “SIPs provide investors with the opportunity to tap into the average returns offered by the equity market.
Through disciplined investing via SIPs, investors can gradually build a significant corpus over time," explained Jhaveri. He underscored the compounding benefits of long-term SIPs, wherein investors earn interest on their interest, making the duration of investment crucial for maximizing these benefits. Money experts suggest that investors who commit to a 15-year or longer investment horizon can anticipate returns of 15 percent or more on their investment.
Regarding the strategy to amass wealth and become rich through SIP investments, Pankaj Mathpal, MD & CEO at Optima Money Managers, emphasises the efficacy of the SIP step-up tool. “Under this monthly step-up plan, mutual fund SIP investors are advised to incrementally increase their monthly SIP contributions in line with their annual salary increments or income growth," said Mathpal. To attain the desired outcome, maintaining a 15 percent annual SIP step-up rate is crucial.
For instance, by initiating a monthly SIP of approximately ₹5,000 and maintaining an annual SIP step-up of 15 percent, coupled with a 15 percent annual mutual fund return, investors could potentially accumulate around ₹5.22 crore over 25 years. Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.Milestone Alert!
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