State Bank of India (SBI) has started one such SIP scheme. Investment in SBI’s Jan Nivesh SIP can be started with just Rs 250. This scheme has been designed to encourage first-time investors and low-income earners to invest.

The most important thing in your investment journey is to keep investing continuously. It does not matter whether your investment amount is small or big, as long as you keep investing, your corpus will keep growing and this investment can give you manifold returns in the future. You must be wondering how such a huge amount can be raised by investing just Rs 250 every month. So let us tell you that just like a pot fills drop by drop, your portfolio also fills up. It is important to keep investing continuously.

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In such a situation, if you are already planning for a long vacation, then start collecting funds for it from today itself. If you do not want to invest directly in the stock market, then you can invest money in SIP. Let us tell you, generally long term investment is advised in SIP and through this you can add big fund with small savings.

In this series, we have brought a powerful SIP plan for you. In this plan you will have to save Rs 222 daily. You can earn more than Rs 15 lakh by long term investment in SIP for 10 years. Know the complete calculation of this SIP plan here.

SIP Calculator: Save ₹222 daily and get ₹15 lakh in your pocket!

You will have to invest Rs 222 daily in this SIP plan. Suppose you do this for 30 days of the month, that means you will invest ₹ 6,660 in a month and ₹ 79,920 in a year. Keep in mind that you have to do this SIP investment for 10 years. During this period you would have invested a total of Rs 7 lakh 99 thousand 200 in SIP. Generally, long term investment through SIP gives a return of 12%.

According to 12% return, you will get total interest of only ₹ 7,48,178 in 10 years. Let us tell you, on maturity of SIP, the amount of investment (₹ 7,99,200) and interest (₹ 7,48,178) is given together. According to the calculation, you can earn a total of ₹ 15,47,378 through this SIP plan.

Disclaimer: Keep in mind, stock market fluctuations have an impact on SIP. You must take advice from a financial advisor before investing. The maturity amount may change if the returns are more or less.

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You can invest in SIP in case of financial crunch in future or to meet your expenses. SIP means Systematic Investment Plan. If you do not want to invest directly in the stock market then SIP is the perfect option for you. In SIP a fixed amount has to be deposited at every regular interval. Know here how a fund of Rs 20 lakh can be deposited through SIP with a monthly deposit of Rs 25 thousand.

How to make Rs 20 lakh, this is the calculation

According to the calculation, you will have to invest Rs 25,000 every month. This means you will invest Rs 3 lakh in 1 year. You will have to make this monthly investment for 5 years. That means you will invest a total of Rs 15 lakh in SIP for 5 years. Now suppose you get 12% annual return on investment. Keep in mind, you also get the benefit of compounding on interest. That means you can earn interest on interest also.

According to the calculation

You will get a total interest of Rs 5,62,159 on SIP investment. At the time of maturity, you will get the investment amount and interest amount together, which will be ₹ 20,62,159.

Keep in mind, to earn profits in SIP, you are advised to invest for a long time. Stock market fluctuations can affect your SIP returns. Before following this plan, please consult your financial advisor.

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Everyone must have read and known about Compound Interest in childhood. When you start managing personal finance after becoming an adult, then the reality of Power of Compounding is revealed. Financial experts say that the benefit of the power of compounding makes sense in the long term. If an investor does SIP for the next 10-15-20 years without withdrawal, he will get proper benefit of compounding.

Double returns are available in Power of Compounding

The investor gets double returns in the power of compounding. One return is received on principal and the other return is received on interest income. Since, the interest portion is not deducted in this, it works to give compound returns. If you want to create wealth for yourself in the long term, then it becomes easy with the help of Power of Compounding.

SIP of Rs 5000 and returns of 12%

If an investor is doing retirement planning and does a SIP of Rs 5000 every month. He is investing in a fund whose average annual return (CAGR) is 12 per cent. How much money he will get on retirement depends on the age at which the retirement planning was done.

A fund of Rs 3.25 crore will be ready

According to SIP Calculator, if the investor plans retirement at the age of 25, then after completion of 60 years, he will have Rs 3.25 crore. If he starts saving for retirement at the age of 30, he will have a total corpus of Rs 1.8 crore. If he would have started it in 35 years, then his fund would be only 95 lakh rupees. It is obvious that the returns received by starting investment only 5 years back almost double. This is possible because of the Power of Compounding.

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The return received in this is equal to the market index. According to the latest data of AMFI, most of the index funds have given an average return of more than 25% in the last 3 years. In the January-March 2023 quarter, a total inflow of Rs 39285.7 crore was recorded in index funds.

Very low expense ratio for index funds

However, there are many index funds which have given lower returns than their benchmark index. In such a situation, it is important to understand some things before investing. Index funds are passively managed. There is no role of fund management in this. Due to this the expense ratio is very low. If an index fund is following Nifty 50, then all the stocks of Nifty 50 in that fund will be in the same proportion as their weightage in the index.

Top 5 Index Funds

Ankush Pahuja, Business Head, Complete Circle Capital and Arihant Bardia, CIO, Valtrust, have selected the top-5 index funds based on their performance in a special program of Money Guru. The names of the five funds are given below and the returns are based on 3 years.

Made a millionaire in 3 years

Among the funds selected by experts, Motilal Oswal Nifty Smallcap 250 Index Fund has given the highest returns in 3 years. According to the SIP Calculator, if an investor had started a SIP of Rs 10,000 in this scheme three years ago and had made an upfront investment of Rs 10,000, then today his fund would have been Rs 5,7,000. The total amount of investment in three years would have been Rs.3.7 lakhs. The annual average return is 20.71 per cent.

Minimum SIP of Rs 500

However, past performance in a mutual fund does not guarantee future performance. Despite this, if the performance of this scheme remains the same, then by starting a SIP of Rs 10,000 from today, you will become a millionaire in the next 3 years and you will have a fund of about Rs 5 lakh ready. Minimum SIP of Rs 500 and minimum Rs 500 can be invested in this scheme. The size of the fund is Rs 315 crore, while the NAV is Rs 21.

(Disclaimer: Mutual Fund investments are subject to market risks. Past performance should not be considered as a measure of future returns. This does not constitute investment advice. Consult your advisor before making any investment decision .)

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Investing is easy but, it is important to know where and how much to invest to reach your target. If you work with the right direction and strategy, you will definitely become a millionaire in time. For this, it is also necessary to have age-match. There is no shortcut way to become a millionaire. There is only one way to make money from money. Whether the salary is less or more, the continuity of investment will take you to the goal and will help in creating a big corpus. 

You can invest with a small amount, not a big one.

There is no need of huge amount for investment. A large fund can be created even with a small amount. Every month you have to choose how much money to save everyday and invest it regularly. You must have often seen in advertisements that mutual funds are right. But, how much is right for whom decides on the sustainability of your investment. Understand the power of SIP and save Rs 100 per day and travel up to Rs 1 crore. For this a 
trick has to be used.

Saving of only Rs 100 will give more than 1 crore

Make it a habit to invest Rs 3000 in mutual funds every month through Systematic Investment Plan (SIP). Meaning you have to save 100 rupees daily. Invest this money for 21 years. Meaning you have to invest monthly for a total of 250 months. Mutual Funds have given strong returns over a long period. There are many funds which have given returns of up to 20% and look very good for earning further. Do a thorough study before choosing funds. If there is a financial planner, then invest only on their advice.

How 1 crore rupees will be made from 100 rupees in 250 months

Suppose you save 100 rupees daily, then this amount will be 3000 rupees in a month. Invest it in mutual funds through SIP. According to 20% annual return, you will have Rs 1,16,05,388 (1.2 Crores) in 21 years. It is to be noted here that during 21 years you have invested only Rs 7,56,000. The remaining Rs.1,08,49,388 (1.1 Crores) has earned you wealth. Meaning compounding has given tremendous advantage here.

How much will you earn with inflation?

Keep in mind that this calculation is only an estimate. If we also add inflation for 21 years, then the figures will be different. Suppose you started investing with Rs 3000 and got an annual return of 20%, then you would have Rs 45,77,647 (45.8 Lakhs). The investment amount will remain the same at Rs 7,56,000 (7.6 Lakhs) and the wealth gain will be Rs 38,21,647 (38.2 Lakhs). Here the annual inflation rate has been taken as 6%. With this your investment amount has been adjusted.

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