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Each of us wants to become wealthy in the long run by investing small amounts of money. Mutual fund houses realized the need of common people and introduced SIP (Systematic Investment Plan), a monthly investment plan. A huge retirement fund can be generated by middle-class and lower-middle class, in the long run. Investing Rs 9,000 per month or Rs 8,000 per month will earn you Rs 1.7 crore or Rs 1.51 crore according to the Mutual Fund Calculator.
“In equity mutual funds, one can expect at least 12 per cent returns, if the investment horizon is more than 15 years. When the investment horizon is over 20 years, one may expect up to 15 per cent, depending on the kind of mutual fund plan chosen”.
Based on the annual return of 12 percent on a mutual fund SIP, a person investing Rs 8,000 per month for 25 years will have a maturity value of Rs 1,51,81,081. As part of this investment, the investor will invest Rs 24,00,000 and earn Rs 1,27,81,081 in interest.
However, “it is recommended to invest between Rs 500 and Rs 1,000 more if one wants to have a much higher return after 25 years”, stated Jhaveri. The mutual fund investor who wants to invest Rs 1.5 crore should invest Rs 9,000 per month while remaining assured about his or her maturity amount.
According to the mutual fund calculator, if you invest Rs 9,000 per month for 25 years as a SIP in a mutual fund yielding 12 percent, your maturity amount will be Rs 1,70,78,716. A total of Rs 27,00,000 will be invested from this net maturity amount, while Rs 14,378,716 will be earned in interest over the investment period.
If you are investing every month for 25 years, your monthly contribution should be Rs. 10 crores
Investing in a variety of options will not make an investor rich. Investing differently will make it rich. The tax and investment experts agree that mutual funds SIPs (systematic investment plans) are suitable for those investors who don’t have a large amount of cash to invest but want to accumulate a considerable sum in the long run. In order to increase a mutual fund investor’s investment in sync with its annual income growth, experts say “investors should invest through monthly SIPs. As a result, they can maximize long-term compounding benefits”.
Transcend Consultants’ Director of Wealth Management, Kartik Jhaveri, commented on how mutual funds SIPs can be used to get higher maturity amounts when compared to other mutual fund investors, his words were, “Mutual fund SIP is suitable for those earning individuals who are in the nascent phase of their career and they don’t have a lump sum amount for investing. Such investors can choose the monthly SIP using annual step-up trick. As one needs to increase one’s investment in sync with increase of one’s income, it’s advisable to use annual step-up trick while investing in mutual fund SIP in monthly mode.”
If a person earning $15,000 a year is looking to accumulate $10,000 in 25 years, how much stepup will be sufficient for them; SEBI registered tax and investment expert Jitendra Solanki said, “Generally, a mutual fund SIP investor uses 10 per cent annual step up but they invest for 30 years or till they retire. Here, the individual wants to accumulate ₹10 crore in 25 years only, in that case he or she is advised to use 15 per cent annual step-up.” Also, he proposed investing in equity mutual funds since the investor must take on some risk to build up a corpus of *10 crores in 25 years.
Both experts agreed that if one invests in mutual funds SIPs for 25 years, they can expect at least a 12 percent return.
Therefore, the mutual fund calculator suggests that starting with a monthly investment of *15,000 should be done for an individual investing for 25 years using a 15 per cent annual step-up and a 12 per cent annual return.
In the next 25 years, this investor will invest $3,832,743 while earning $6,36,52,376 in interest. If this is true, the mutual fund calculator states that the investor will invest $3,832,743.
A mutual fund calculator is the simplest way to see what your future returns would be
Every Indian wants to invest in a mutual fund or an annuity plan. But what if you got Rs 1.7 crore after 25 years in mutual funds? The only thing you have to save each day is Rs 300. Imagine how your life would change in the next 25 years.
Mutual funds are a great way to invest your money and accumulate wealth. However, you may not be aware of how much time it will take for you to reach your goals. Mutual funds are also great because you don’t have to be very patient. This calculator is meant to give you an idea of how much time it will take to get the money that you want. It will show you what percentage of your savings you need to put away each day in order to make your goal in 25 years.
