Mutual Funds are one of the better investment options when it comes to earning comparatively higher returns than FDs. For the same reason Mutual Funds are preferred by a lot of investors for long term financial planning. One can invest in mutual funds one time (lumpsum investment) as well as in small amounts periodically through Systematic Investment Plans, better known as SIPs. One can invest through SIP and target a big amount overtime, for example if you want to build a corpus of 1 crore you can reach that amount by consistently investing through SIPs.
The frequency of investment under SIP can be weekly, monthly, quarterly, or semi-annually, depending on the investment capacity of the investors. Furthermore, SIPs help to attenuate market volatility as you get the benefit of buying more units for the same investment amount when markets are down and hence give you rupee cost averaging. You can decide the amount of investment, and it’s horizon and reach the target of 1 crore over a period of time.
Here are a few examples pointed out by ETMONEY which can help you reach 1 crore by investing a certain amount on a monthly basis:
1. Investing Rs 45,000 a month in an equity based fund offering an assumed annual returns of 15% consistently for nine years will turn your investments to 1 crore. Here you invest around 48.6 lakhs while your returns stand at a whopping 53.4 lakhs. However, given the mounting expenses which are growing by the day, setting aside a high sum of Rs 45,000 a month would be a gargantuan task for many investors.
2. Investing Rs 30,000 a month in an equity-oriented fund at an assumed annual return rate of 15% for 11 years will touch your worth to 1.01 crore. Here you are investing 39.6 lakhs and earning 61.34 lakhs, which is quite impressive.
3. The next option is investing Rs 15,000 a month for a period of 15 years in a fund, which offers returns at an assumed rate of 15% to accumulate 1 crore. As per this calculation, you would be investing around 27 lakhs while earning 74.53 lakhs in return. This option is relatively feasible as investing Rs 15,000 a month would not be a tough task for many investors.
To calculate accurate amounts needed to accumulate 1 crore through SIPs we have ETMONEY’s SIP Calculator which is one of the most preferred Mutual Funds SIP Calculator in India and gives investors easy SIP Calculator Formula used to project the returns on your investments.