Forming a corpus of Rs. 4 crore in 15 years is a formidable financial goal and SIPs (systematic investment plans) serve as an effective and disciplined means to do so. SIPs in mutual funds allow you as an investor to periodically invest a specific amount over the long term. Besides offering flexibility and affordability, the SIP route even endows the power of compounding and rupee cost averaging. All these benefits make this an ideal financial route for long-term wealth generation.
How to invest in mutual funds using the SIP method?
Follow these four steps to efficiently build a corpus of Rs. 4 crore through SIPs in 15 years –
Create a specific goal
The first step in the financial planning journey is to carefully create your goals. Here, the goal is to amass a corpus of Rs 4 crore in 15 years. Why is this important? Creating a defined goal helps in being dedicated and focused. It is the same as preparing for a trip – Knowing where you are heading permits you to choose the best route. In this case, your goal will help in directing you towards the appropriate mutual funds that have the highest potential of attaining your objective within the specific time frame.
Make use of an online SIP calculator
Use an online SIP calculator as it allows you to establish a proper road map for your investing journey. Through this tool, you become aware of the monthly investible required to achieve your financial objective. For example, suppose you seek a yearly return of 13%. Inputting this, together with your aim of Rs. 4 crore in 15 years into the online SIP calculator results in a monthly investment requirement of Rs. 72,000. Your total investment over 15 years would roughly be Rs 1.29 crore. So, with this online SIP return calculator, you can simplify difficult calculations and know exactly what you need to do to reach your goal.
Choose the appropriate mutual funds
Every mutual fund scheme is unique. Some funds are riskier but provide higher returns such as equity funds while others are safer but offer lower returns such as debt mutual funds. You must choose the scheme that best matches your needs, risk appetite level, and investment time frame. Diversifying or disseminating your investments throughout distinct mutual fund schemes is equivalent to not placing all your eggs in a single basket. It assists in balancing risk and maximises the chances of earning higher returns.
Keep a close eye on your investment holdings
It is essential to keep a close watch on your finances. Evaluating your SIP investments periodically permits you to see if they are functioning as anticipated. If the market changes, you might need to alter your investment figure. Here’s where you can again use an online SIP calculator. This tool can help you recalculate and make the required changes to attain your corpus goal.
Ending note
To summarise, investing in SIPs is a prudent long-term approach towards wealth creation. Using online instruments like SIP calculators streamlines the process and allows for well-informed investing decisions. Do keep in mind that reaching Rs. 4 crore in 15 years through the SIP mode would require disciplined investments and regular monitoring.
