Sip
SIP (Systematic Investment Plan) is a long -term best investment medium. Small investors across the country are putting money in mutual funds through SIP. If you also want to make a fund of Rs 1 crore in the next 20 years, then you will have to invest Rs 11000 per month. On this investment, it is necessary that you get returns at the rate of 12% annually. If you do this, then you will definitely become the owner of 1 crore rupees in 20 years. But have you ever wondered what will be the real value of that 1 crore rupees after 20 years?
Understand by example, in 2010, the price of gas cylinders was Rs 350, but now it is about 1000 rupees. Similarly, in 2009 you could buy 2 liters of petrol for Rs 100, whereas today, with the same money you can buy only 1 liter. This shows that inflation during this period has reduced the strength of money about half. In such a situation, what will be a real value of 1 crore after 20 years? Let’s know.
How will inflation earn?
If average inflation is considered 6% per year, then after 20 years the value of 1 crore will be ₹ 31 lakh. At the same time, if inflation is considered 5% per year, then the value of 1 crore will be ₹ 37.7 lakh after 20 years. If inflation was high, such as 7%, then the value of Rs 1 crore will be reduced to only 25 lakh rupees after 20 years. You can wonder how inflation eats your hard earned money. Therefore, when investing, never forget to calculate the effect of inflation.
10% step-up every year
If you want to eliminate the effect of inflation, then do not forget to step-up 10% with SIP every year. If you do this for 20 years, then you will start a sip of Rs 11000 and deposit Rs 2,04,94,522 after 20 years. You can understand how you can submit funds for your retirement or other needs by defeating inflation.
Disclaimer: This article has been written only for the purpose of information. Before any type of investment or before taking financial risks, consult your financial advisor. India TV will not be responsible for any type of risk.
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