SIP investment: With research, planning, and strategic investing, anyone can build a substantial corpus and make their post-retirement life financially secure. There are many options available in the market for short-term and long-term investments. If you are looking for an investment option, mutual funds may be a good choice for you. It is a market-linked, long-term investment that earns interest on interest using the power of compound interest. Investors can invest small amounts from time to time instead of a lump sum amount.
But how does it work? How much money does one need to invest? Let’s understand with an example –
Suppose you want to build a corpus of around Rs 1 crore by investing in SIP mutual funds. Assuming an average annual return rate of 12 per cent, you are investing for 10 years to build this corpus.
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Now, can you guess how much money you would need to invest in SIP every month? Let’s calculate and find out –
What is the monthly SIP needed to retire with Rs 1 crore?
According to the calculations, to build a corpus of over Rs 1 crore, you would need to invest at least Rs 44,640 in SIP every month for 10 years.
How to Invest in SIP: Calculating total investment
In these 10 years, you will invest a total of Rs 53,56,800.
SIP Plan to Create Rs 1 Crore Retirement Corpus: Calculating average capital gain
In terms of capital gain, a total of Rs 46,44,162 will be received. It should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.
Long-term Investment Options: Final corpus received
As a result, at the end of 10 years, including the principal investment and capital gains, you can reach your target of Rs 1,00,00,962.
Full Calculation: You may become the owner of over Rs 1 crore after 10 years
- Total Investment Amount: Rs 53,56,800
- Capital Gains: Rs 46,44,162
- Total Approx. Return: Rs 1,00,00,962
(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.)