SIP Investment: Every parent wants their children to have a safe and bright future. For this, SIP i.e. Systematic Investment Plan is an easy and reliable way. In this, you can create a big fund by investing a little money every month. In this article, we will explain to you in simple language how you can create a fund of Rs 1 crore in the name of your children by saving Rs 5000 every month.
What is SIP and how does it work
SIP is a method in which you invest a fixed amount every month in a mutual fund. In this, you get the benefit of compounding on your money, due to which your investment grows over time. With SIP, you can gradually accumulate a large amount, and its biggest advantage is that it is easy and safe.
Benefits of starting SIP early
- The sooner you start investing in SIP, the more benefits you will get. This happens due to compounding. For example:
- If you start SIP at the age of 25 and get a return of 15%, your money will become Rs 1 crore in 21 years.
- If you start SIP at the age of 35, then this money will become Rs 1 crore in 29 years.
How to make Rs 1 crore from SIP of Rs 5000
If you invest Rs 5000 every month in SIP, it depends on the fixed time and returns that your money will reach Rs 1 crore. Mutual funds give an average annual return of 12% to 15%. Below is a table showing the time taken to reach Rs 1 crore on a monthly SIP of Rs 5000.
| Return (%) | Time (years) | Total Investment (Rs) | Maturity Amount (Rs) |
|---|---|---|---|
| 12% | 25 | 15,00,000 | 1,02,39,676 |
| 15% | 21 | 12,60,000 | 1,03,29,763 |
Why do SIP in the name of children
- Education Expenses: Nowadays the expenses for children’s education are increasing rapidly. With SIP, you can create sufficient funds for them.
- Wedding expenses: Weddings require a large sum of money. SIP can help you deal with this expense.
- Legacy: With SIP, you can create a secure future and wealth for your children.
Benefits of SIP
- Easy way: SIP teaches you the habit of investing regularly every month.
- Small investment, big profit: In this you can start with a small amount and create a big fund in the long run.
- Flexibility: In SIP you can increase or decrease your monthly amount as per your need.
- Low risk: In the long term, the risk of SIP reduces and the returns are higher.
Easy tips to start SIP
- Set a goal: First, decide how much money you need and by when.
- Choose the right mutual fund: Choose the right fund as per your needs and risk appetite.
- Set up automatic investments: Automate SIP so that your money gets invested on time every month.
- Be patient: Let the investment last long enough so that you get the full benefit of compounding.
Conclusion
SIP is a great and easy way to secure children’s future. By saving just Rs 5000 every month, you can create a fund of up to Rs 1 crore. Start on time and make your children’s dreams come true. Start SIP today and lay the foundation for their bright future.
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