It’s essential to consider your monthly income and expenses. If you can save some money every month, consider investing it to secure your financial future. Investing in mutual funds through a systematic investment plan (SIP) can help you build wealth over time.
When investing in mutual funds, the frequency of your investments can vary depending on your salary. Whether monthly, once every three months, six months, or once a year, the key is to prioritize investing your surplus money.
This approach can be more beneficial than spending it on other expenses. By calculating the SIP amount, you can estimate how long it will take to reach your financial goals.
For example, let’s say you want to accumulate a crore fund. In this case, Equity Mutual Fund SIP is a good choice. Selecting a fund with a good track record and seeking expert advice is essential.
Once you determine how much you can invest per month and the expected returns, even a tiny amount can be invested through SIP.
For instance, if your salary is Rs. 25,000, and you can save Rs. 4,000 per month, with an annual return of 12%, you can accumulate a crore fund in 28 years or 339 months.
If 40% of your salary is invested at Rs. 10,000 per month, accumulating a crore will take 20 years. As the investment increases, the period decreases.
Additionally, gradually increasing the SIP amount, known as a step-up SIP, can have significant benefits. For instance, if you start with an initial SIP of Rs. 4,000 per month and increase it by 5% annually, you can accumulate a crore fund in 301 months. Increasing the SIP amount by 10% yearly will shorten the timeframe to 264 months.
Therefore, it’s essential to carefully consider how much you can save and invest per month to achieve your financial goals.