SIP in Mutual Funds: Why to wait till retirement to become a millionaire, nowadays the trend is of Early Retirement.
SIP in Mutual Funds:Â Why wait till retirement to become a millionaire, nowadays the trend is of Early Retirement.
The young generation of the present day are very conscious about savings and retirement planning, they do not want to work till the age of 60, but want to accumulate enough money by 45 or 50 years to leave their job and enjoy the rest of their life comfortably. Get cut.
how to become a millionaire at the age of 45Â
If this is your thinking too, then you should start investing in mutual funds from today and from now on, because you will not be able to achieve your aggressive goals with traditional small savings schemes, for this you will have to take a little risk.
If you want to retire at the age of 45 instead of 60, then you also need a higher return on investment, for this Equity Mutual Funds can be a better option. Because when you are young you can take more risk.
If you want to collect corpus of 1 crore or 2 crores at the age of 45 or 50 then you have to do two things
1. You have to start investing at the age of 20-30 yearsÂ
.When you are young, you have more risk taking ability. Most of us start working or earning at the age of 20. You can start SIP in mutual funds from the same age as Rs.500. Keep increasing it slowly.
Since this will be a long term investment, you will not be affected by the volatility in the stock market. Generally, equity mutual funds give returns of 12-15 per cent over a long period of time.
Example No. 1
So let us tell you that if you have started SIP at the age of 25 and aiming to get Rs 1 crore at the age of 45, then you will have to invest Rs 11,000 per month in SIP i.e. Rs 367 per day. You have to save and invest it. Suppose you get an average return of 12 per cent over a period of 20 years.
Age 25 Years
- Retirement 45 Years
- Investment Tenure 20 Years
- Monthly Investment Rs 11,000
- Estimated Return 12%
- Investment Amount Rs 26.4 Lakh
- Total Return Rs 83.50 Lakh
- Total Amount Rs 1.09 Crore
Example No. 2Â
Suppose you are 30 years old and want to retire at the age of 45, then you have to deposit Rs 663 per day i.e. Rs 19900 per month in SIP. So when you are 45 years old, you will have an amount of Rs 1 crore in your hands.
Now since you are starting investment in 30 years instead of 25 years, your investment amount has also almost doubled but the final amount is only Rs 1 crore. The late you start, the less you will get the benefit of compounding.
Age 30 Years
- Retirement 45 Years
- Investment Duration 15 Years
- Monthly Investment Rs 19,900
- Estimated Return 12%
- Investment Amount Rs 35.82 Lakh
- Total Return Rs 64.59 Lakh
- Total Amount Rs 1 Crore
Example No. 3
Now suppose you start investing only at the age of 20, what will happen? In such a situation, you will have a long time of 25 years to invest, you will be able to take advantage of compounding fiercely.
To get Rs 1 crore at the age of 45, you have to do a monthly SIP of Rs 5300 i.e. save Rs 177 per day. That is, the longer you delay, the more money you will have to spend to achieve your goal.
Age 20 Years
- Retirement 45 Years
- Investment Duration 25 Years
- Monthly Investment Rs 5300
- Estimated Return 12%
- Investment Amount Rs 15.90 Lakh
- Total Return Rs 84.67 Lakh
- Total Amount Rs 1 Crore
