The longer the time period for which SIP is run, the more profit it has. Actually, the benefit of compounding in SIP gives more profit in the long run. To collect a fund of crores of rupees in 25 years, you can start SIP with just Rs 5000.
For the better future of children, all parents save a part of their income and invest it. If you also want to buy your children’s education, marriage and your dream house and are looking for a better investment option, then mutual fund SIP can be a great option for you. A lot of money can be made from SIP in the long term. Here we will know how to start SIP with Rs 5000 and collect crores of rupees after 25 years.
The longer the SIP is run, the more profit it will give.
The longer the SIP is run, the more profit it will give. Actually, the benefit of compounding in SIP gives more profit in the long run. To collect a fund of crores of rupees in 25 years, you can start SIP with just Rs 5000. But in such a case, you will have to do step-up in your SIP every year. Step-up means you will have to increase the amount of your SIP every year.
A fund of crores of rupees will be created with a step-up of 10 percent
After starting SIP with Rs 5000, if you do a step-up of 10 percent every year, then you can make crores of rupees in 25 years. Suppose if you get an estimated return of even 12 percent, then in 25 years you will have a fund of Rs 2.13 crore. This includes your investment of Rs 59 lakh and an estimated return of Rs 1.54 crore.
You will have to pay tax on the returns from SIP
If you get an average estimated return of 15 percent every year during this period, then in 25 years you can create a corpus of Rs 3.29 crore. But while investing in SIP, you have to take special care of some very important things. First of all, you have to keep in mind that there is a lot of stock market risk in SIP. Along with this, you also have to keep in mind that you will have to pay tax on the returns you get.
