Business News Desk – Do you want to retire early? Don’t you want to work long hours? If yes, then for this you will have to invest only Rs 10,000 every month. This investment will have to be made in mutual fund schemes through SIP. After investing continuously for 15 years, you will have so much money that you will not need to work. Let us know about this in detail.
Benefits of compounding in long term investing
Long term investment through SIP in mutual fund schemes can make you a millionaire in just 15 years. Investing for a long period through SIP provides the benefit of compounding as well as rupee cost averaging. If you invest Rs 10,000 every month through SIP for 15 years in a fund whose annual return is 15 percent, then your money will grow to Rs 1 crore.
These schemes made millionaires
There are many such schemes of mutual funds which have made investors rich. A big fund can be created by investing in these for a long period. SBI Small Cap Fund, DSP Small Cap Fund, Axis Growth Opportunities Fund are examples. The historical XIPR of SBI Smallcap Fund has been 24.03 percent. This fund has created a corpus of Rs 1.35 crore by investing Rs 10,000 every month for 15 years. The historical XIPR of DSP Smallcap Fund has been 22.33 percent. In this scheme, a fund of Rs 1.16 crore has been created by investing Rs 10,000 every month through SIP for 15 consecutive years.
Know the risks before investing
Experts say that if you want to make a big fund then you will have to start investing soon. Secondly, you have to select the fund carefully. You can choose from funds that have an excellent long-term track record. However, it has to be kept in mind that smallcap funds have higher returns but they also have higher risks. Therefore, you have to be prepared to take a little risk. The good thing is that when you invest for the long term the risk is relatively less.
Benefits of increasing SIP amount every year
If you are able to increase your SIP amount every year or two, it will have a big impact. With this, you will be able to raise a fund much larger than Rs 1 crore by investing every month for 15 years. Another thing to keep in mind is that there will be many big ups and downs in the market during the last 15 years. If there is a decline, the value of your investment will decrease. You don’t need to worry about this. As soon as the market bounces back, not only will the decline be compensated, but the value of your investment will also increase.
