Business News Desk, Mutual Fund SIP is considered an effective investment tool for the long term. AMFI data shows that investors who invest in SIP for a long period have made a lot of money. The special thing about SIP is that you can create crores of rupees in the long term even from a small amount. Today we will know here how a fund of Rs 2.60 crore can be created by starting SIP with Rs 5000.
The goal will be achieved easily with the help of step-up formula
If you start SIP with Rs 5000 and increase your SIP by 5 percent every year i.e. step-up, then the target can be achieved easily. Let us now understand how the step-up formula will help you reach the target. For example, Ravindra started SIP with Rs 5000 at the age of 25. Ravi is now also increasing his SIP by 5-5 percent every year i.e. step-up. According to this, if Ravi continues SIP for 30 consecutive years, then his total investment will be Rs 39,86,331.
How much fund will be ready in 30 years
If Ravindra gets an average estimated return of 12 percent per annum on this investment, then in 30 years he can create a fund of Rs 2.63 crore. If Ravindra is lucky, the Indian markets perform well and he gets an average return of 15 percent per annum, then in 30 years he will have a huge fund of Rs 4.89 crore. Before investing in mutual funds, you have to keep in mind that it involves the risk of the stock market. If the market falls for a long time, then it is sure to have a bad effect on your returns.
