How to become crorepati: Genius doesn’t do different things; they do things differently. Similarly, a smart investor becomes a millionaire or a billionaire by investing wisely. For example, if a normal investor starts a monthly equity of ₹9,000 and keeps doing it religiously for 35 years, it will accumulate ₹55.88 crore. However, like a smart investor, if someone increases their monthly SIP in sync with their annual income, they can accumulate a substantial amount in retirement.
To achieve this, an investor needs to start investing early in their career. To start a ₹9,000 monthly , the investor needs to save ₹30 a day ( ₹9,000/30), which can be achieved by cutting down on unnecessary expenses.
How to become rich via a mutual fund SIP?
Speaking on how a smart investor accumulates much more than a normal equity mutual fund investor, Pankaj Mathpal, CEO & MD at Optima Money Managers, said, “Equity offer a monthly SIP with an annual step-up offer. However, a few people choose an annual step-up. This leads to almost half of the amount which they could have accumulated by opting for the annual step-up.”
On how much annual SIP step-up an investor can opt for, SEBI-registered tax and investment expert Jitendra Solanki said, “In normal conditions, an investor takes a 10% annual SIP step-up. However, it is advised to opt for a 15% annual step-up SIP. This has a significant impact on one’s net sum at the time of redemption because in a long-term time horizon of 35 years or more, one can expect at least 15% annual return on one’s money.”
Mutual fund SIP calculator
Assuming a 15% annual return on a mutual fund SIP of ₹9,000 per month, with an annual step-up of 15%, the SBI Securities mutual fund calculator suggests that one would accumulate ₹55.88 crore after 35 years.
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Mutual fund plans you may look at
On mutual funds that one can look at for whopping returns through SIPs, Pankaj Mathpal of Optima Money Managers listed out the following plans:
1] HDFC Flexi Cap Fund;
2] Nippon India Multicap Fund;
3] ICICI Prudential Value Fund;
4] Kotak Multicap Fund; and
5] Invesco India Large & Midcap Fund.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.