Let you money work for You! Can you spare Rs.1,000 per month for yourself and see how it helps you build a corpus?

Let your money work for you!

Can you spare Rs.1,000 per month for yourself and see how it helps you build a corpus???

Investment through a Systematic Investment Plan is an excellent mode of regular saving. The amount can be as low as Rs.500 per month. Let’s first see a simple illustration on how it works:

Making my Money work for ME!
	SIP for 10 Yrs	SIP for 15 Yrs	SIP for 20 Yrs
Monthly Investment	Rs.1,000	Rs.1,000	Rs.1,000
No. of Years of Investment	10 years	15 years	20 years
Interest on Investment	12% p.a.	12% p.a.	12% p.a.
Total Invested Amount	Rs.1,20,000	Rs.1,80,000	Rs.2,40,000
Fund Value	Rs.2,30,039	Rs.4,99,580	Rs.9,89,255
Absolute Return	92%	178%	312%

The figures above might look ambitious but it is a true picture. Of course, the calculation above is based on the assumption that the investment earns an interest of 12% per annum. The fact is, for an SIP investment in a fairly good equity diversified mutual fund scheme, certainly has the potential to generate this kind of return in the long term. One needs to have the patience and ignore the day-to-day rise and fall in the market.

In a nutshell, following are the benefits of investing in an equity diversified Mutual Fund Scheme through SIP:

ü Inculcates a regular saving habit

ü Helps to build a corpus without putting a onetime burden of a lump-sum investment

ü Staggered (Monthly) investment averages out the cost of per Unit purchase

ü Power of compounding helps earn better return

ü Profits, if realized, is tax-free for all the units held for 1 year or more

ü The fund is professionally managed by Fund Managers.

The best thing that I like about SIP is that we can link our investments directly through our bank account. As such, every month, our account is automatically debited by the amount we choose and we don’t even realize it.

And the mantra really works here:

If you don’t see it – you don’t spend it! – Start an SIP today – it’s never too late!!!

Hope you all like the post. Suggestions and comments will be appreciated.

Thanks!