Winning Bizness Desk

Mumbai. Diwali bonus has already been announced this year by central and state government employees. Investment experts say that although most people spend bonus money on festive purchases, if this amount is invested in the right place, then by retirement you will become a millionaire. It sounds quite shocking to hear, but the figures themselves tell its truth.

Invest in right schemes

Usually most people make extra purchases on festivals with the bonus money, but if you are a savvy investor then you can put this money to work instead of spending it unnecessarily. That is, you can invest in such a scheme, which can give you huge profits in the long term. Investment advisors say that whether it is a festival or any other occasion, we should avoid spending unless it is necessary. However, it happens that most of the people spend the bonus money on festivals for fun and shopping. But, investing this money in schemes that give better returns in the long run will help you build a bigger corpus on retirement.

Who bonus will reap incredible return

For instance, all railway employees are being given a maximum bonus of Rs 17,951. If an employee invests directly in equity mutual funds for 25 years instead of spending this amount, he will still get huge returns on maturity. Equity mutual funds offer an average return of 12 per cent over a long period of time. If we proceed on this calculation, then the same bonus money will become Rs 3,05,168 after 25 years.

Second calculation

The second calculation is that if an employee invests an amount equal to the amount of his bonus for the next 25 years in equity mutual funds today, then his total investment amount will be Rs 4,48,775. If this amount is invested in mutual funds for the maximum investment period i.e. 30 years, which is giving an average annual return of 12 percent, then on maturity, you will have a fund of Rs 1,34,25,264. That is, by investing only the bonus money, you have created a corpus of Rs 1.34 crore till your retirement.

If you invest bonus money through SIP

The third scenario is that even if an employee invests this amount received as bonus through SIP for the next 25 years, he can build a large corpus on maturity. In fact, in 25 years, there have been a total of 300 months and if the current amount is considered constant, then you will get a total bonus of Rs 4,48,775. Now dividing this amount by 300 gives Rs 1,495.91. That is, you have to invest Rs 1,495.91 every month for the next 25 years through SIP. In this way, in 25 years, you will have a huge fund of Rs 28,36,964.