SIP better to start with small savings
About 13 lakhs returns in 20 years with 1000/mo SIP
Highlights:- average 15% returns given in last 10 years
- Better for young invester not for aged
- Top performing Gives high return about 20%
SIP (Systematic Investment Plan) is a better option to start with small savings.
SIP is an option to invest in mutual funds (MF). Through this, you can invest a fixed amount every month, three months or at fixed time. If you want to invest Rs 5,000 in a mutual fund and cannot invest this money at one go, then you can invest in 10 installments through SIP for 500 rupees.
How much will you get returns
SIP has given average returns of around 15% in the last 10 years. The top performing SIP has given over 20 per cent returns in the last 10 years. Whereas the returns are close to 10 per cent over a period of five years. At the same time, the returns are close to eight per cent over a period of three years. In a few selected SIPs in the market, it has given 1.60 percent return in two years, it has given eight percent return in three years, 13 percent in five years and more than 18 percent in 10 years. This simply means that SIPs provide higher returns over the long term.
Millionaire with investment of one thousand rupees
If you invest one thousand rupees in SIP every month for 15 years at an estimated return of 15 per cent, then it will become Rs 13.11 lakh. In this you deposit only Rs 2.40 lakh and you get Rs 10.71 lakh as a return. This is due to compound interest in which interest is also received over interest.
Five times earnings in long term
If you invest one thousand rupees in SIP every month at an estimated return of 15 percent, then in 10 years it will increase to about 2.60 lakh rupees. In this you deposit Rs 1.20 lakh and you get Rs 1.40 lakh as profit due to compound interest. At the same time, in 20 years, you get Rs 13.11 lakh. In this way, investing in a 20-year SIP instead of 10 gives you about five times more profit.
SIP reduces risk on investment
If you put a lump sum of 12 thousand rupees in the stock and after one month the market falls by 10 percent, then your investment is reduced to Rs 10,800. After one month, if there is a rise of 10%, then your investment will increase to Rs 11,880. But even then it will be Rs 120 less than the original investment, which is a direct loss. At the same time, if you apply one thousand rupees in the first month, then your investment will be reduced to Rs 900 on a 10% decline. With its investment of one thousand rupees next month, your total investment will increase to Rs 1,900. Now after two months, if the market rises 10 percent, then your investment will increase to Rs 2090. In this way, you will get a profit of Rs 90 i.e. 4.50 percent in Domah. Whereas the lump sum investment in the stock would have suffered. In this way, the risk is reduced by investing in shares through SIP. If you invest one thousand rupees in SIP at an estimated return of 15% every month, then in 10 years it will increase to about Rs 2.60 lakh. In this you deposit Rs 1.20 lakh and you get Rs 1.40 lakh as profit due to compound interest. At the same time, in 20 years, you get Rs 13.11 lakh. In this way, investing in a 20-year SIP instead of 10 gives you about five times more profit.
Millionaire with small savings
- 1000 rupees will be 13.11 lakhs for 20 years at an estimated return of 15%
- Investors got 15 percent average return in SIP in 10 years
- Option to start investment from Rs 500 companies in SIP
- SIP giving less than 0.2 percent return in two years, 18% return in 10 years
Value Sip Mathematics The SIP wherein the investment value has the option of changing the amount according to the condition of the fluctuation is called the value SIP. You are depositing Rs 1,000 every month in SIP. But in case of a fall in the stock market, your investment comes down to Rs 800, then you can deposit Rs 1,200 in it next month. Similarly, due to the boom in the market, the value of your investment has increased to Rs 1,200, so you can deposit Rs 800. Financial advisors say that the objective of this investment option is to make the investment in SIP easier and to take more advantage of the fall in the market.
Top-up and Pause Sip A fixed amount is deposited in a normal SIP. But companies also have the option to increase the current SIP amount in percentage or in a fixed amount. This option is called top-up or step-up sip. If you are a salaried person, then your salary increases a little every year. You can earn more by increasing a part of that increased income through a top-up SIP. The SIP which has the facility to hold the investment for a few days in between is called a Pause Sip. You can opt for a pause sip in case you miss a job or incur a sudden fat expense. It does not entail ending the investment in the middle.
Under the SIP, companies give investors several options, including debt funds and equity funds, among other schemes. In a simple SIP, investors invest in mutual funds of companies that invest the funds in shares. In this, a ratio is determined how much amount will be invested in shares and how much other medium. But in Equity SIP, the investor chooses to buy the shares he chooses.According to data from mutual fund organization, despite the increase in the number of mutual accounts, the number of SIP closures has increased by four per cent in the last six months. Experts say that closing it in the middle is a loss deal because it is very beneficial in the long term. There are many investment options that you can avail by choosing.
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