Many individuals explore various investment options. Some choose fixed deposits, while others opt for different schemes. The returns from each scheme can vary significantly. However, there’s a method to potentially become a millionaire by saving just Rs 50. This method is known as SIP (Systematic Investment Plan). By investing in mutual funds through SIP, you can build a substantial amount over time. The popularity of SIP investments is on the rise.
SIP Sets New Records
The Systematic Investment Plan (SIP) continues to break records. Investment in mutual funds via SIP has reached unprecedented levels. According to the Association of Mutual Funds (AMFI), SIP inflows in mutual funds hit Rs 26,459 crore in December 2024, marking a new high. This is an increase from Rs 25,320 crore in November. Additionally, investments in equity mutual funds reached Rs 41,155 crore in December, reflecting a 15 percent month-on-month growth.
Long-Term Gains Only
Numerous mutual funds have provided impressive returns to investors over recent years. Experts advise that investing in mutual funds is best suited for the long term. If you’re looking to build a significant fund, consider investing for at least 3 to 5 years. It is widely believed that long-term investments yield favorable returns. Many mutual funds have delivered annual returns ranging from 15 to 20 percent for long-term investors.
Why should you consider investing only in SIP?
A lot of folks don’t have a big chunk of cash to invest all at once. In that case, putting away a small amount each month into mutual funds can be a great option. Plus, you can easily invest online. Right now, there are several schemes that let you start a SIP with just Rs 500 a month, and SEBI is even thinking about introducing a SIP option for Rs 250.
So, what’s the secret to becoming a millionaire?
When you invest in mutual funds, you benefit from compound interest, which means your small investments can grow significantly over time. If you save Rs 50 every day, that adds up to Rs 1500 in a month. By consistently investing that Rs 1500 in mutual funds through SIP each month for 30 years, you can really see the magic happen.
After 30 years, your monthly investment of Rs 1500 could grow to Rs 5.40 lakh. Assuming you earn a 15 percent annual return on that investment, you could end up with around Rs 99.74 lakh in interest alone. In the end, by sticking to that Rs 1500 monthly investment for 30 years, you could build a fund of over Rs 1 crore.
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