SIP is an effective way of investing in mutual funds. Since SIP investment provides compound returns, staying in investment for the long term can help you build a sizeable corpus. Even if your monthly investment is Rs 999, you can accumulate wealth worth Rs 999,999. Know how it is possible and how you can achieve that goal.
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SIP investment: There is some charm around the magic number ending in 99. Retailers often use it as a psychological pricing strategy to make customers think the item is cheaper. The strategy works on the idea that customers are more likely to focus on the first two digits and consider a Rs 99 price much lower than Rs 100, even though the difference is just Rs 1. Similarly, when we think in terms of investment, we think about round numbers such as Rs 1,000, Rs 5,000, or Rs 10,000; we never think of investing Rs 99, Rs 999, or Rs 9,999. What if some invest with the magic number of Rs 999? What if you choose the popular method of systematic investment plan (SIP) and invest this amount in a mutual fund?
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Investments through SIP give you compound returns.
The figure of Rs 999 for monthly investment looks small, but even with that investment, you can get a huge corpus of Rs 999,999, another all-nine number magic figure, which is actually a corpus of Rs 10 lakh.
Since SIP offers compounding, one needs to stay in their investments for a long time.
If one invests a small amount for 15 years or more, their small contribution can do wonders in the form of a huge corpus.
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SIP investment: How Rs 999 SIP can help you get Rs 999,999 corpus
If you invest Rs 999 in a month, your investment in a year will be Rs 11,988. In 10 years, it will be Rs. 119,880.
If you invest this amount for 20 years and get a 12 per cent return on your investment, your investment in that period will be Rs 2.40 lakh, while your long-term capital gains will be around Rs 7.60 lakh, the sum of which will help you touch the figure of Rs 999,999.
However, if you continue your investment for five more years, i.e., for a total of 25 years, your invested amount will be Rs three lakh, capital gains will be Rs 15.96 lakh, and the total amount will be Rs 18.96 lakh.
Invest it for another five years, i.e., for a total of 30 years, invested amount will be Rs 3.60 lakh, the long-term gains will be Rs 31.67 lakh, and the corpus will be Rs 35.26 lakh.
This is where your Rs. 999 investment can get you.
(Disclaimer: Investments in mutual funds are subject to market risks. Do your own research or consult your advisor before investing.)
