In a world where financial planning and wealth creation are essential for a secure future, SIPemerges as a simple yet powerful tool. They enable individuals to embark on their investment journey with ease, harnessing the benefits of compounding and professional fund management. Whether your goal is to retire comfortably, provide your children with the best education, buy a house, luxury items, or achieve any other financial milestone, SIPmutual fund investment can be your trusted companion on the path to financial success. You must invest in SIP to take the first step towards a brighter financial future.
Why choose SIPs for long-term financial goals?
Consistency:SIPs ensure consistent investments, which is key for long-term goals.
Compounding: The longer you stay invested in mutual funds, the more the power of compounding works in your favour, helping your mutual fundinvestments grow exponentially.
Risk Mitigation: Rupee cost averaging and diversification help reduce the impact of market volatility on your portfolio.
Liquidity:when you invest in SIP, it offers liquidity, allowing you to redeem your investments partially or completely when needed.
To make your mutual fund investing journey easier, tools like SIP calculator can be used. Let us see the different types of calculations you can make using the SIPreturn calculator–
Example 1: Goal based investment
Suppose, you have a financial goal to accumulate ₹10,00,000 in 15 years for your child’s education. You decide to invest in SIP for the same. The expected annual return on the investment is 12%.
Investment Amount: ₹5,000 per month
Investment Tenure: 15 years
Expected Annual Returns: 12%
Using a SIPcalculator online, you can calculate the future value of your investments:
The SIP calculator will estimate that your total investment in mutual fundsover 15 years would be ₹9,00,000 (₹5,000 per month * 15 years).
It will then calculate the expected future value of your investments based on the expected annual returns.
The SIPcalculator might provide an estimate that your investment of ₹5,000 per month, with an expected annual return of 12%, could potentially grow to ₹15,51,248 in 15 years.
Example 2: Retirement planning
Let us say that you are planning for retirement and want to know how much you need to invest monthly to accumulate ₹20,00,000 in 25 years. You plan to invest in a mix of equity and debt mutual funds, with an expected average annual return of 10%.
Financial Goal: ₹20,00,000
Investment Tenure: 25 years
Expected Annual Returns: 10%
Using a SIP calculator online-You enter your financial goal of ₹20,00,000 and the expected annual returns of 10%.
The SIP calculator will estimate the monthly SIP amount required to reach your goal in a systematic manner.
The SIP return calculator might provide an estimate that you need to invest approximately ₹2,476 per month for 25 years, assuming a 10% annual return, to accumulate ₹2,000,000 for your retirement.
In the two scenarios above, it is clear that a tool like SIP calculator can help a retail investor in gaining a clear understanding of what he or she can expect from their mutual fund investment journey, over time. It helps them to navigate the path easily and reach their aforesaid goals with ease.
To invest in SIP and remain invested over a long period of time is a wise decision for reaching financial goals. In this read, we discussed how a tool like SIP calculator can help in the process.