children For a better future, every parent saves a part of their income and invests. If you also want to fund your children’s education, marriage and buy your dream house and are looking for a better investment option, then SIP mutual fund can be a great option for you. You can make a lot of money with SIP in the long run. Here we will know how by starting SIP with Rs 5000, you can accumulate crores of rupees after 25 years.
The longer you run SIP, the higher the profits.
The longer the SIP runs, the more profits you will make. In fact, the benefit of compounding available in SIP generates more profits in the long run. You can start SIP even with just Rs 5000 to accumulate funds worth crores of rupees in 25 years. But in such a situation, you will have to increase your SIP every year. Step-up means that you will have to increase your SIP amount every year.
10 per cent hike will create fund worth crores of rupees
After starting SIP with Rs 5,000, if it increases by 10 percent every year, you can earn crores of rupees in 25 years. Suppose you earn an estimated return of 12 per cent, 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.
Taxes must be paid on the returns received from the SIP.
If an average expected return of 15 per cent is earned every year during this period, then in 25 years a corpus of Rs 3.29 crore can be created. But while investing in SIP, you have to take special care of some very important things. First of all, one must keep in mind that there is a lot of stock market risk in SIP. Along with this, you will also have to take into account that you will also have to pay taxes for the returns you obtain.
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