Mutual Fund SIP | Mutual fund SIP is considered an effective long-term investment tool. According to AMFI data, investors investing in SIP in the long term have earned a lot of money. The special thing about SIP is that you can earn crores of rupees in the long term with a small amount. Today we are going to know how a fund of Rs 2.60 crore can be created by starting a SIP with Rs 5000.
Help with step-up formula
This target can be easily achieved if you start a SIP with Rs 5000 and increase your SIP by 5% every year. Now let's understand how the step-up formula will help you reach your target.
What is the return on investing Rs 5,000?
For example, a person started SIP with Rs 5000 at the age of 25. The person is now increasing his SIP by 5-5 percent every year. According to this, if the person continues SIP for 30 years, then his total investment will be Rs 39,86,331. If the average annual return on this investment is 12%, then he can create a fund of Rs 2.63 crore in 30 years. If the stock market is performing well and the average annual return is 15%, then in 30 years you can have a big fund of Rs 4.89 crore.
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