Story of a boring investor who would add Rs 50 lakh/year without increasing the SIP amount!

financialexpress.com:

In the mutual fund investment journey, boring investors, who can do the same thing month-on-month for several years, have more chances of having the last laugh compared to investors who get excited by everyday happenings in stock markets.

Excited investors often get swayed by market performance and short-term returns of funds while making their investment choices. However, boring investors tend to stick to a fund for the long term.

This boring investor does not chase market returns. He doesn’t even chase the performance of various funds but for several years, he does the same thing. Money comes to his bank account every month either in the form of salary or from other sources and he keeps on investing a part of his income in the fund of his choice for several years. Is this strategy good for this boring investor?

A recent report suggests yes, this boring investor can generate a massive corpus in the long run by simply continuing the SIP.

According to a calculation done by FundsIndia in its monthly Wealth Conversations Report, it will take around 8 years for this boring investor to reach his first Rs 50 lakh if s/he is investing Rs 30,000 per month in a scheme which is giving 12% annualised returns.

However, it will take just another 4 years to add the second Rs 50 lakh to his corpus. The next Rs 50 lakh will be added in just 3 years. By the time, this investor reaches his 20th year, he will be adding Rs 50 lakh almost every year by investing just Rs 30,000 a month if the return remains 12% per annum.

The moral of the story is that even boring Investors can generate a big corpus by investing regularly through SIP in a good mutual fund scheme over the long term. While investments in mutual funds are subject to market