Mutual Fund: In this case, mutual funds may be your best investment option.
Mutual Fund: You can also become a millionaire by SIP (Crorepati Formula). However, you have to invest according to the advice of experts, only then will success come. In this case, Mutual Fund can be your best investment option.
How it is possible
Mutual Fund SIP is often preferred for long-term wealth creation due to its compounding power and flexibility. Nowadays, Systematic Investment Plan (SIP) has become a popular and effective way to invest in Mutual Funds as it offers the opportunity to build large funds.
Under the 'Step-up SIP', investors can increase their existing contributions in stages to benefit from the power of compounding, with an average annual return of 12-14%
. Although stock market-linked investments come with high risks, they offer good returns in the long run. There are several popular mutual fund houses that have given investors an average annual return of 12-14%.
How to become a millionaire in 10 years
Even a huge fund target of Rs 1 crore in a short period of time may not be out of reach. Here is how to become a millionaire in 10 years through SIP investment. In this case, the target corpus is Rs 1 crore and the investment period is 10 years. Using a simple SIP strategy in a mutual fund that gives 12% annual returns, here is how the investment will grow:
Tenure: 10 years
Monthly SIP required: 43,500 Taka
Estimated return: 12%
Invested amount: 52,20,000 Taka
Estimated return: 48,86,749 Taka
Total value: 1,01,06,749 Taka
In the above case, a SIP of Rs 43,500 per month may be unaffordable for many. In this case, one can opt for a 'step-up SIP' which will increase the investment over the years as the income increases:
Tenure: 10 years
Monthly SIP Required: 30,000 Taka
Annual Step-up: 10% of investment per year
Estimated Return: 12%
Invested Amount: 57,37,472 Taka
Estimated return: 43,85,505 taka
Total value: 1,01,22,978 taka
Although the initial SIP seems low in the 'step-up SIP' option, the overall investment amount is higher. Therefore, it depends on the investor's choice whether he wants to pay a large amount upfront and reduce the cost of the investment or be more flexible in terms of contributions.
(Note: The information provided here is for informational purposes only. It is important to mention here that investing in the market is risky. As an investor, always consult an expert before investing money. ABPLive.com never advises anyone to invest money here. This share market related news is provided here for educational purposes only. We do not call or tip about any shares.)
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