With financial awareness increasing in young earning individuals, several investment schemes are buzzing in the market. One of them is the Systematic Investment Plan (SIP). SIP is an investment vehicle offered to investors by mutual fund companies. People put in small amounts over a period of time instead of lump sums in mutual fund SIP. It is very attractive among young professionals since it only requires monthly or quarterly small investments with a huge maturity amount.
People can get huge returns in these mutual fund schemes since they receive compounding interest. In compounding interest, people get interest on their accumulated interest over the years as well as on their principal amount.
Financial experts believe that people who are serious about investment should start their journey with a mutual fund SIP calculator. The second step should be to identify the best mutual fund scheme which suits their investment limit, and give them desired returns.
Through mutual fund SIP, people can get returns of as high as Rs 10 crore when they turn 50, given that they started their investment early on. “To get ₹10 crore at the age of 50 is an ambitious target and for that the investor has to start investment as early as possible say at 25 years of age,” Transcend Consultants’ Kartik Jhaveri was quoted as saying by Mint.
Kartik suggested equity mutual funds for this, noting that it maximises the profit as one can receive at least 12 percent return during the investment period.
The mutual fund calculator, if one assumes the return to be 12 percent, shows that one needs to start with Rs 15,000 monthly investment at 25 and increase it by 15 percent annually to reach the target of Rs 10 crore. According to the mutual fund SIP calculator, a person will get Rs 10.19 crore when he/she turns 50 years old.
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