There is a way to become super-rich, and experts believe that everyone can become rich! The way to the richness, contrary to popular belief, is not difficult but is simpler than we thought. The simple mantra is “Make your money work for you, rather than you are working for money!”, in other words, become a smart investor! Smart investors have been known to grow their investments to a much higher scale than ordinary investors. The idea is to do things differently and not to do different things.
Mr. Kartik Jhaveri, director of wealth management at Transcend consultants gave an insight on a smarter way to invest in mutual funds. He says that a SIP investor can grow his investment by 15-17 percent by investing in a plan of choice for 25 to 30 years. He strongly suggested youngsters start investing in the early stages of their careers to gain real benefits of SIP. To highlight the big gains confirming Mr. Jhaveri’s suggestions, a simple calculation on mutual fund calculator shows that one can make Rs. 4.21 crores in 30 years by investing in Rs. 6000 per month SIP. During this period of 30 years, the investor would have invested only Rs. 21.6 lakhs!
Another investment expert Mr. Jitendra Solanki highlighted the difference between a smart and an ordinary investor. He said, a smart investor will step-up his monthly SIP investment by 10% every year, keeping in line with his annual income increment. This will result in compounding benefits on interests on investments.
The mutual fund calculator confirms the theory of Mr. Solanki. It is seen that one can make Rs. 7.61 crores in 30 years, by systematically stepping up investments in Rs. 6000 per month SIP. This return is 80% higher than a similar SIP without stepping up!