Dear Friends
Every common man in India wants o be a crorepati. How a Systematic Investment
Plan (SIP) in Mutual Funds equity scheme can fulfill the dream of every common
man.
Illustration :
Mr. Sunit is a 25yrs old married man. He works as a junior assistant in a
private firm in Mumbai. His salary is Rs.15000/-per month. Although he could
not save much but always dreams of becoming a crorepati. If u think that he is
day dreaming and cannot fulfill his dream then you are certainly wrong. Let's
find out that how he can use Systematic Investment Plan (SIP) to fulfill his
dream.
Sunit will opt for Yearly Growing SIP.
WHAT IS GROWING SIP ?
Growing SIP means the investor will increase the monthly SIP amount by a
certain percentage every year.
For example : If the initial SIP Amount is Rs.1000/- per month & grows 20%
every year, that means :
1st Year the SIP amount is Rs.1000/- per month
2nd Year the SIP amount is Rs.1200/- per month
3rd Year the SIP amount is Rs.1440/- and continues this way every year.......
WHY SUNIT IS OPTING FOR GROWING SIP ?
Sunit has a very long term planning of creating wealth. He knows that the way
inflation is growing; a Rs.1000/- SIP amount will have hardly any value after
10 or 15 years later. As he is expecting growth in his salary with time,
therefore he is opting for a Growing Yearly SIP.
Sunit - Age 25 Years
Wants Rs.10,000,000/- in 25 Years
When he will attain the age of 50 Years
Annual % increase is investible amount : 20%
Sunit Expectations of returns 12%
RESULT : Sunit will need to start an SIP of Rs.759/- per month
NON GROWING SIP (FIXED YEARLY SIP) :
Non Growing SIP is a normal SIP where monthly SIP amount remains fixed for the
entire term of the investment.
Expected Number of Years of SIP
Returns (%) 5 10 15 20 25 30
10 129,581 49,638 24,899 13,812 8,044
4,809
12 123,299 44,636 21,011 10,871 5,875
3,246
15 114,492 38,020 16,224 7,535 3,628
1,776
20 101,313 29,044 10,466 4,038 1,597
638
SUMMARY :
To get Rs.1crore in 25years Mr. Sunit will require to start a monthly SIP of
Rs.759/- only and will have to increase the same by 20% every year i.e. he will
start a monthly SIP of Rs.759/- in the 1st year, monthly SIP of Rs.910/- in the
2nd Year and so on.... (with assumed market return of 12%)
If Mr.Sunit wants to invest a fixed SIP amount for the entire tenure (Non
Growing SIP) then to get 1crore in 25 years he will need to do monthly SIP of
Rs.5875/- for 25 years (with assumed market return of 12%) OR Rs.3628/- (with
assumed market return of 15%)
With Best Regards
SHENOY INVESTMENT AND FINANCIAL
CONSULTANTS PRIVATE LIMITED
11-A, KASHI NIKETAN, 2ND ROAD,
CHEMBUR, MUMBAI - 400 071
TEL : 6797 3433 / 2521 2111
EMAIL : [email protected]
[email protected]
Dealing in Mutual Funds, General & Life Insurance Products, Post Office
Schemes, Fixed Deposits, I.P.Os., and Capital Gains Bonds
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