Winning Bizness Desk
Mumbai. Everyone dreams of becoming a millionaire, but very few get success in it. If you belong to a middle class family and want to become a millionaire in the future, this dream can come true through Systematic Investment Plan (SIP). Investment in mutual funds has to be done through SIP. Although SIP is market linked, most experts say it is the best investment option today. The longer you invest in SIP, the better returns you will get. In this you get the benefit of Compound Interest. In such a case, the amount you invest grows exponentially in the long run.
Average return on SIP 12%
The average return on SIP is considered to be 12 percent. This return is several times higher than any scheme or fixed deposit that exists today. In this way, you can definitely make yourself a millionaire by investing in SIP for the long term. If you increase the investment amount a bit and invest Rs 8000 per month, you will have to invest for at least 22 years to become a millionaire. In 22 years your total investment will be Rs 21,12,000 but, at 12 percent return on this investment you will get Rs 1,03,67,167. If you have a good monthly salary and can invest Rs 10,000 per month in SIP excluding all your expenses, then your dream of becoming a millionaire can come true soon. In such case you have to invest for 20 years. If you invest Rs 24,00,000 over 20 years, earning a return of 12 percent, that would be Rs 99,91,479 (around Rs 1 crore). If you continue the same SIP for 21 years, you can get Rs 1,13,86,742 as return.
How is SIP beneficial?
The best thing about SIP is that you can increase or decrease your investment anytime. Economists say that everyone should invest a small amount every year for better returns. Even if you raise only 500 rupees, the returns are definitely higher. It is not that difficult because your income also increases with time. This is easily possible with a little frugality and planning. Apart from this, the average return in SIP is 12 percent, but if you get more than this, your money will grow in even less time. Also, you can also stop SIP midway if need arises and resume from there as per time.
