The way inflation has increased for some time, people have also become very alert about financial planning. Now people do financial planning in advance for everything from marriage, children to old age.
If you also want to secure the future of your child, want to deal with the responsibilities ranging from higher studies to marriage without any tension, then start financial planning with his birth. If you start investing even 5,000 rupees every month in his name, then by the time your child is 20 years old, you can easily create a fund of up to 50,000,00 for him. Know how?
Money will be made from SIP
In today’s time, SIP i.e. Systematic Investment Plan is very popular among the people. Through this you invest money in mutual funds. However, due to being linked to the market, it cannot be assured of fixed interest rates. But SIP is considered less risky than investing money directly in the market. Experts believe that in the long run, SIP works for wealth creation for you as it gets the benefit of compounding interest. Generally, an average return of up to 12 per cent is available in SIP. If your luck is good then the returns can be even better.
know the calculation
Suppose you start a monthly SIP of Rs 5,000 with the birth of a child and invest in it continuously for 20 years. In this case, your total investment in 20 years will be Rs 12,00,000, but according to 12 percent, you will get Rs 37,95,740 interest on this invested amount. In this way, in 20 years, including the invested amount and interest, you will get a total of Rs 49,95,740 i.e. around 50 lakhs.
On the other hand, if you continue this investment for 5 more years i.e. for 25 years, then you will get Rs 94,88,175. This is such an amount that you cannot get in any scheme. If you get a return of around 15 percent, then the profit can be even better. You can invest this amount anywhere from your child’s career to his marriage.
(Disclaimer: Investments in Mutual Funds are subject to market risks. Do your own research or consult your advisor before investing.)