How to Make 1 Crore in 10 Years by SIP

• SIP is a flexible and affordable investment unit that allows you to start from low amount and then you can increase the investment amount slowly.

• The investment type allows free entry and exit without imposing any charges. You can withdraw the amount, and there is no penalty for it

• If you have a low-risk appetite, SIP is an ideal choice to get decent returns, and it is not affected by the ups and downs of the market

• The investment in SIP is managed by an expert who has knowledge about the market tactics and switches your fund

• The Power of Compounding effect makes your money grow exponentially as the tenure increases.

Now that you’re aware of the benefits, you can start investing in SIP by following the below steps:

• Gauge Your Risk Appetite:

  The foremost rule of any investment depends on your risk tolerance level. The higher the age and financial commitments lower is the risk appetite. However, you need to have high-risk taking ability to get high returns for a period of time. Along with the risk, you need to identify what is your ultimate goal – it can be marriage, funding your child’s education, a vacation, buying a car, etc.

• Selection Of Funds:

  After you have identified risk tolerance and personal financial goals, the next step is to know which mutual fund scheme, is suitable for you. While selecting the scheme, you should inspect the past performance of the fund.

• Suitable Date For Payment In SIP:

  For Systematic Investment Plan, you can make payments weekly, monthly or quarterly. The mutual fund company directly deducts the fee by auto-debiting from your saving account. You can choose a payment date as per your convenience.

• Duration Of Investment:

  The length of the SIP period ranges from 3 to 5 years. It is the best way to build wealth in long-term investments. You do not need to check the price of mutual fund schemes. It lets you to stay worry-free until the end of the investment period.

  Building corpus of Rs. 1 crore in 10 years through SIP can be tempting. Making a lumpsum investment can help in accomplishing the target in just a few years. Let’s get to know how to become crorepati by SIP.

Assuming an average return of 12%, you need to invest around Rs. 11,600 per week or Rs. 50,000 monthly to build a corpus of Rs. 1 crore in 10 years. Here we would recommend a word of caution; such a large amount will not be enough to take care of your financial goals. Make sure you find out your long-term goals and set a realistic target to build enough corpus for future.

Projected SIP returns for various time durations:

What factors slow down your target?

• The fund you have chosen could underperform consecutively failing to meet the 12% target

• GDP growth that goes below 7% due to war, recession or political turmoil

• Increase in tax slabs of equity units by future governments

Investment in SIP is an excellent way of building a corpus for the future, but you need to set realistic targets. The plan is all about systematic saving that helps you achieve your goal in the long-run.