Last Updated on 16/08/2024 by Arun jain
Everyone saves some amount from their income and wants to invest it in a place where they get huge returns. In this case, Mutual Fund SIP has emerged as the best option. In the long term, this investment option has showered money on investors and is also helpful in fulfilling the dream of becoming a millionaire. However, to achieve this goal, SIP investment has to be done under a special formula. This formula is 10X21X12, let’s know how it works?
You get the benefit of compounding
First of all, let us talk about SIP i.e. Systematic Investment Plan (SIP), let us tell you that it is a long term investment process and the most important thing in this is that along with strong returns on investment, there is also the benefit of compounding on maintaining it for a long period, due to which a huge fund is collected. By adopting the formula mentioned above, you can fulfill your dream of becoming a crorepati by depositing just Rs 10,000 every month.
Strong returns on SIP in the long term
Before investing in the stock market or mutual funds, it is important to understand that these markets are subject to risks and returns may fluctuate, that is, your actual return may be more or less. However, if we look at the history of SIP, it has given investors a return of 10-15 percent or more. Not only this, the return of many SIPs has been up to 18-20 percent in the long term.
How to work out the 10X21X12 formula
Now let us tell you about this 10X21X12 formula, the first digit i.e. 10 means that you have to save 10000 rupees from your monthly income. Now let’s talk about the second digit i.e. 21, the 10 thousand rupees you have saved every month, you have to invest it regularly in SIP for 21 years. The next digit is 12 and it is for average return, although in the long term, 18-20 percent return is also available on SIP investment, but here we are assuming an average return of 12 percent, but even this much return can make this saving a fund of more than 1 crore rupees.
This is the complete calculation to become a millionaire
If we calculate through SIP calculator, then if you save Rs 10,000 per month and invest in SIP for 21 years, then at an average annual return of 12 percent, you will invest a total of Rs 25,20,000 in this period. But with compounding, the return you get will be Rs 88,66,742. In this way, your total fund will become Rs 1,13,86,742. On the other hand, if you apply it for just 15 years instead of 21, then you will get a fund of Rs 50,45,760 on an investment of Rs 18,00,000.
SIP accounts reached close to 9 crores
If we look at the data released by the Association of Mutual Funds in India (AMFI) in June 2024 this year, Mutual Fund investors had invested Rs 21,262 crore in Systematic Investment Plan (SIP) during June, which was more than the investment of Rs 20,904 crore in the previous month of May. Along with this, AMFI had told that the number of SIP Accounts has also increased to 8.98 crores.
(Note- Before making any investment in mutual funds or stock market, please consult your market experts.)
Source (PTI) (NDTV) (HINDUSTANTIMES)