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When will you become a millionaire with SIP of ₹10000?

In today's era, every person has a dream, financial freedom. The magical figure to fulfill this dream is considered to be a corpus of Rs 1 crore. Many people believe that this goal can be achieved through Systematic Investment Plan (SIP) in mutual funds. But the question arises whether investing just Rs 10,000 every month can make you a millionaire in 10 to 12 years? Let us understand.

The truth of becoming a millionaire with SIP of ten thousand

If you are one of those investors who believe that a monthly SIP of Rs 10,000 will take you to the magical figure of Rs 1 crore in a decade, then you need to pause and understand the calculations. According to Ravi Kumar, co-founder, Gaining Ground Investment Services, this target is almost impossible with this investment amount and time frame. His analysis says that even if you assume an annual return of 12% to 15%, to create a corpus of Rs 1 crore, you will have to invest at least Rs 25,000 to 30,000 every month. If you cannot increase the investment amount, you will have to test your patience and increase the investment period to about 18 years.

If the goal is big then the effort is also big

For small investors, Ravi suggests a practical route – 'Step-up SIP'. He suggests that you start with Rs 10,000 per month, but increase your SIP amount by at least 15% every year as your income increases. This small change combined with the power of compounding can bring you much closer to your goal.

Where to invest?

Another common dilemma is whether to invest Rs 10,000 in a single fund or divide Rs 5,000 each into two different funds? Experts believe that the quality of funds is more important than their number. However, investing in two different funds diversifies your portfolio. This reduces the risk to some extent and allows you to take advantage of different market caps and investment styles. For better results, it can be a wise move to choose a good multi-cap or flexi-cap fund, which can take advantage of future prospects by investing in all sectors of the market.

Get complete horoscope in one statement

Now let's talk about the second big problem. Many people forget to invest in SIP or lump sum years ago. They do not remember how much money is invested in which fund and what is its value today. The simplest and easiest way to track this is through the 'Consolidated Account Statement' (CAS). In a way, it is a log of all your investments (mutual funds, shares, bonds etc.), which your depository (NSDL or CDSL) sends every month to your registered email ID.

Apart from this, you can also get complete information about your investment by visiting the website of Registrar and Transfer Agent (RTA) of Mutual Fund. CAMS and KFintech are two major RTAs in India, which handle the work of almost all mutual fund companies. All you have to do is create an account on their portal with your registered mobile number or email ID and your entire mutual fund portfolio will be in front of you. As far as investment in shares is concerned, you will get the information about it from your demat account. Overall, CAS is the master key that can consolidate your scattered investments at one place.

Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.