The Systematic Investment Plan (SIP), a mutual fund investment mechanism, provides for periodic fixed-amount investments in a specific equities or debt-oriented scheme.
Nevertheless, before investing in a mutual fund scheme, a person should be aware of his risk tolerance and designate himself as an aggressive, moderate, or cautious investor based on how much risk he is ready to take on. Hence, as an illustration, A is an ambitious investor who is willing to take large risks, yet his objective is to earn 10 crores in 20 years with an equity-oriented mutual fund SIP; how much should he spend every month to attain this goal? Let us hear from our experts.
According to Manish P. Hingar, Founder of Fintoo, the amount to invest for ambitious investors seeking to develop a corpus of 10 crores over a period of 20 years would depend on the annualized rate of return on their investment.
To acquire 10 crores at a 15% annualized rate of return, an investor would need to begin a monthly SIP (Systematic Investment Plan) of around 66,000 for 20 years.
It is crucial to remember, however, that the rate of return on investment can vary based on a variety of factors, including market circumstances, investing strategy, and the sort of investments undertaken. As a result, before making investment selections, investors should thoroughly investigate and assess various investment possibilities, as well as speak with a financial counselor.
If you merely put in 1.3 lacs each month for 20 years and it grows at 10% per year, you may end up with 10 crores. Many combinations are therefore conceivable based on the desired amount, projected returns, and form of investing.
Nevertheless, there is no assurance that the projected return will be realized, thus continuous portfolio monitoring in line with market and asset class performance would be necessary, according to Abhishek Dev.
