Mutual Fund SIP The real fun of mutual fund investment is only when it is invested for a longer period of time. SIP proves to be very helpful in making big money in the long term. This is the reason why mutual fund SIP has helped many people fulfill their dreams. AMFI data shows that mutual fund SIP has given tremendous returns to investors in the long term. Here we will know how a fund of Rs 5 crore can be collected from a SIP of Rs 10,000.
You can achieve the target of Rs 5 crore by using the step-up formula
To start a SIP with Rs 10,000 and make Rs 5 crore in a short time, you will have to use the step-up formula. Increasing the money invested in SIP every year is called step-up. If you start a SIP with Rs 10,000 and increase this investment by 5 percent every year i.e. step-up, you can achieve your goal. If you get an estimated annual return of 12 percent with this investment strategy, then in 30 years you can create a fund of Rs 5.27 crore.
Capital gains tax will have to be paid on the profit earned from SIP
Following this investment strategy, if you get an estimated annual return of 15 percent every year, then you can create a corpus of Rs 5.25 crore in 26 years. If you continue your investment for a few more years, then your money can grow even more and faster. While investing in mutual fund SIP, keep in mind that it involves stock market risk. The fluctuations in the market have a direct impact on your returns. Along with this, you also have to pay capital gains tax on the profit from SIP.
