While making any investment, an investor's major goal is to become rich as soon as possible. Some of them do achieve their investment goal with the available limited investment tools.
"Successful investors don't do different things, but they do things differently."
Let's take mutual fund investments. A person who is in the nascent phase of career generally chooses a systematic investment plan (SIP), which is one of the most popular parts of mutual fund investment. According to my experience over last 30 years, a mutual fund investment will give at least 10 to 12 per cent return if the investment is for long-term.
However, I am with opinion that after one begins an SIP, one should think of increasing the SIP amount annually in sync with one's salary hike. It will help him or her maximise returns.
Speaking on the mutual fund SIP investments, "Mutual Fund is subject to market risk and one should have the appetite to take risk."
In the long-term Equity market linked mutual fund sip will give at least 12 per cent return but when I say long-term, then it should be an investment for not less then 15 years."
let's assume that we starts a mutual fund SIP of Rs 6,000 for 25 years and return for the same period is 12 per cent. Then as per the mutual fund calculator, future estimated amount will be Rs 1,13,85,811.
Let's see how mutual funds SIP step-up plan will impact future estimated amount after 25 years if the same Rs 6,000 SIP is increased 10 per cent per annum. As per the mutual fund calculator, future estimated amount after 25 years at 12 per cent returns will be Rs 2,36,92,246.
So, this 10 per cent step up in the Mutual Funds SIP will jump from Rs 1,13,85,811 to Rs 2,36,92,246, which is more than double from the normal mutual funds SIP investment.
Call me for detailed discussion and information about schemes for achieving such future values.
Ritesh Sheth
Chartered Wealth manager CWM®
9930444099
E-mail: riteshdsheth@gmail.com
