Mutual Fund SIP: Mutual funds are considered to be an effective and efficient investment tool for creating a huge fund in the long term. If you are a working person and your salary is not high, then even in such a situation, you can start a Mutual Fund SIP with a small amount and make a lot of money in the long term. Here we will know how to become a millionaire by saving only 5 thousand rupees every month.
Advantages of Mutual Funds
Mutual funds are considered to be the most effective investment tool for building a large corpus in the long term because through this you not only get attractive returns from the market but you also get the tremendous benefit of compounding. It should be kept in mind that you will get the huge benefit of compounding only if you continue to invest for a long time.
How long will it take to become a millionaire with a SIP of Rs 5,000
If your salary is not high but you can save Rs 5,000 per month, then you can become a millionaire by investing this amount in mutual fund SIP. On calculation with the online SIP calculator, it was found that if you invest Rs 5,000 every month, on which you get an estimated annual interest of 12 percent, then in 26 years you can create a fund of more than Rs 1 crore.
SIP of Rs 5,000 can make you a millionaire even in 19-20 years
If you get an estimated interest of 15 percent per annum on an investment of Rs 5000, then it will take 22 years to get Rs 1 crore. Apart from this, if you get an estimated interest of 18 percent then you can become a millionaire after 19 to 20 years.
Market Risk in Mutual Funds
Before investing in mutual funds, one must keep in mind that there is market risk in it. Apart from this, the returns received from mutual fund investment come under capital gains and you have to pay tax on it.
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