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SIP: Do you need a fund of Rs 10 crore for retirement? Then start SIP of this amount at the age of 25, 30 and 40..

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If you want to create a fund of Rs 10 crore for retirement, then the most important thing is to invest at the right time and regularly. One such good way is the Systematic Investment Plan of Mutual Fund, i.e., SIP.

The magic of SIP: Small amount, big dream
The biggest feature of SIP is that you can start it with a very small amount. Nowadays, it is possible to start with just Rs 250. But if your target is to raise Rs 10 crore by retirement, then for this, you will have to invest a decent amount from the beginning. If you are young, you can start small, but it is important to increase the amount gradually. SIP not only inculcates the habit of investing, but also helps in accumulating a good amount of money in the long term.

Always remember three things while investing in SIP
Start early: The sooner you start investing, the more you will get the benefit of compounding.
Invest for the long term: Have a perspective of at least 1520 years.
Increase the amount every year: Make sure to increase the SIP amount by 510% every year.

The magic of compounding
The great scientist Albert Einstein called compounding the eighth wonder of the world. When you reinvest your earnings, your money automatically starts earning more money. The same magic happens in SIP as well. Regular investment and long time together give tremendous benefits of compounding.

Fund of Rs 10 crore
According to a report by FundsIndia, if you assume a compound return of 12% per annum, then to create a retirement fund of Rs 10 crore, SIP will have to be done in this way. If you start early, then a large fund can be created even with a very small amount. For example, if you start SIP at the age of 25, then an SIP of about Rs 14,600 every month is enough. But if you start at the age of 40, then to achieve the same target, you will have to do a SIP of about Rs 91,500 every month.

Keep these things in mind while investing in SIP.

Don't be afraid of market fluctuations: The whole purpose of SIP is that you keep investing every month; this keeps reducing the average purchase price.

Separate SIPs for different goals: Retirement, children's education, buying a house. Keep a separate SIP for each goal.

Choose a step-up SIP: Keep increasing your SIP amount by 10% every year. This will keep your investment increasing as your income increases.

Starting early is the real power.

A retirement fund of Rs 10 crore may seem like a dream, but if you invest regularly and with discipline through SIP, then this dream can also become a reality. The magic of compounding works only when you give it time. So start investing as early as possible and continue it for a long time.

Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
 

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