10 percent step-up will create a fund worth crores of rupees
For the better future of children, all parents save a part of their earnings and invest. If you also want to finance your children’s education, marriage and buy your dream house and are looking for a better investment option, then mutual fund SIP can be a great option for you. A lot of money can be made from SIP in the long run. Here we will know how by starting SIP with Rs 5000, you can collect crores of rupees after 25 years.
The longer you run SIP, the bigger will be your profit.
The longer the SIP is run, the more profit there is in it. In fact, the benefit of compounding available in SIP gives more profits in the long run. You can start SIP even with just Rs 5000 to accumulate funds worth crores of rupees in 25 years. But in such a situation, you will have to step-up your SIP every year. Step-up means you will have to increase your SIP amount every year.
10 percent step-up will create a fund worth crores of rupees
After starting SIP with Rs 5000, if you do a step-up of 10 percent every year, you can make crores of rupees in 25 years. Suppose if you get an estimated return of 12 percent, then in 25 years you will have a fund of Rs 2.13 crore. This includes your investment of Rs 59 lakh and an estimated return of Rs 1.54 crore.
Tax will have to be paid on returns received from SIP
If you get an average expected return of 15 percent every year during this period, then in 25 years you can create a corpus of Rs 3.29 crore. But while investing in SIP, you have to take special care of some very important things. First of all, you have to keep in mind that there is a lot of stock market risk in SIP. Along with this, you will also have to keep in mind that you will also have to pay tax on the returns you get.
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