Looking to become a crorepati through mutual funds? All it takes is discipline and patience. With a long-term outlook, the power of compounding can transform small, consistent investments into an enviable corpus.
In the past, mutual funds have been known to give around 12% annual returns, making them an attractive investment option. While returns in mutual funds are never guaranteed, having a long-term investment outlook helps to spread the risk over the years. This allows investors to benefit from the power of compounding and ride out market volatility.
For mutual funds, SIPs (Systematic Investment Plans) are a simple and effective way to build wealth over time. By investing regularly, even small amounts can lead to big returns. SIPs also encourage financial discipline and reduce market timing risks.
Here's How:
Monthly SIP amount: Rs 12,000
Investment duration: 19 years
Expected rate of return: 12%
Total invested amount: Rs 27,36,000
Estimated returns: Rs 77,67,905
Total corpus value: Rs 1,05,03,905
It is possible that a monthly SIP of Rs 12,000 can help one turn into a crorepati in 19 years. In order to reduce this investment period, the investor can also opt for ‘step-up' SIP technique. In this method, the investor increases their SIP contributions annually or as per their convenience. This gradual increase in investment boosts the overall corpus and helps achieve financial goals faster through the power of compounding.
Here's How Step-Up SIP Will Work:
Monthly SIP amount: Rs 12,000
Step Up % (annual): 10%
Investment duration: 15 years
Expected rate of return: 12%
Total invested amount: Rs 45,75,237
Estimated returns: Rs 58,45,381
Total corpus value: Rs 1,04,20,619
By using the ‘step-up' technique, one can become a crorepati in 15 years, four years earlier than usual, if they started with a monthly contribution of Rs 12,000.
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