New Delhi: Systematic Investment Plans (SIPs) can be a great way to gradually accumulate wealth over time. It allows you to invest a fixed amount of money at regular intervals, taking advantage of rupee-cost averaging and the power of compounding. It’s important to have a long-term perspective and stay consistent with your investments to potentially achieve your goal of becoming a Crorepati without directly buying products or investing in the stock market. Always remember to do thorough research and consult a financial advisor to make informed investment decisions.

Compounding your money

Indeed, the power of compounding through SIPs allows you to accumulate a substantial sum with regular small investments. Investing even a modest amount like 1000 rupees per month can lead to a considerable fund over time. SIPs can provide attractive returns, especially when they benefit from the compounding effect. It’s important to remain patient and committed to the investment plan to reap the rewards in the long run. Keep in mind that while SIPs have the potential to generate impressive returns, they are subject to market fluctuations, so diversification and a long-term perspective are crucial.

Investing in Mutual Funds through SIPs can indeed be a viable strategy to work towards accumulating a significant sum over time. If you consistently invest 1000 rupees per month and the mutual fund generates an average annual return of around 20 per cent, the power of compounding can help you reach a substantial corpus over the long run.

Remember, while mutual funds have the potential for attractive returns, they also carry risks associated with market fluctuations. It’s important to do thorough research, diversify your investments, and consider consulting a financial advisor before making any investment decisions.

Generate more than 2 crores by investing over 30 periods of time

To help get a better understanding of the calculation, let us take an example, suppose an individual invests Rs 1,000 every month, after which through an annual return of 20 per cent, the investor will get a fund of Rs 86.27 lakh on maturity. In the case of 30 years, with a 20 per cent return, the investor will get Rs 2 crore 33 lakh 60 thousand in total at the time of maturity.

Compounding on mutual funds is what highly benefits investors.

Disclaimer- News24 does not provide any kind of financial assistance through this article. Always consult your financial advisor before investing)

(Written by – Mahek Nigam)