SIP: Higher education is becoming increasingly expensive in today’s world, particularly at esteemed universities like Ivy League colleges. It’s essential to make thoughtful and early plans for your child’s future education if you want to prevent future financial strain. Systematic Investment Plans (SIPs) are an organised and disciplined method of creating wealth and are one efficient strategy to accumulate a sizeable school fund.
Understanding the Power of SIPs
Systematic Investment Plans (SIPs) are investing techniques that enable you to invest a predetermined amount into mutual funds on a monthly or quarterly basis. Compound interest is used in this strategy, which is key for long-term financial goals.
SIP Expected Returns Over Time
Considering a 15% yearly return, let’s examine the projected returns from SIP investments over different time periods:
| Duration | SIP Amount (₹) | Future Value (₹) |
|---|---|---|
| 5 years | 15,000 | 13.5 Lakhs |
| 8 years | 15,000 | 27.9 Lakhs |
| 10 years | 15,000 | 41.8 Lakhs |
| 12 years | 15,000 | 60.5 Lakhs |
| 15 years | 15,000 | 1 Crore |
| 18 years | 15,000 | 1.7 Crores |
| 20 years | 15,000 | 2.3 Crores |
- 5 Years: Investing ₹15,000 monthly for 5 years can yield approximately ₹13.5 Lakhs.
- 10 Years: Your investment could grow to around ₹41.8 Lakhs in a decade.
- 15 Years: By investing consistently for 15 years, you could accumulate a substantial sum of ₹1 Crore.
- 20 Years: Planning ahead for 20 years could result in a significant corpus of ₹2.3 Crores.
Wealth Projection for SIP
Let’s consider a specific scenario:
- Expected Amount: ₹2.3 Crores (₹23,739,325)
- Amount Invested: ₹36 Lakhs (₹3,600,000)
- Wealth Gain: ₹1.9 Crores (₹19,139,325)
This implies that your investment might increase to ₹2.3 Crores if you invest ₹15,000 each month for 20 years at a 15% yearly return. This would be an incredible ₹1.9 Crores in wealth increase, which would be the growth on your original investment.
SIP Financial Planning Tips
- Your investments have more time to grow the sooner you start investing.
- With SIPs, consistency is essential. Make a commitment to make monthly payments despite changes in the market.
- Spreading your investments across several asset classes will help you control risk through diversification.
- Regularly assess your investment portfolio and make necessary adjustments in light of evolving objectives and situations.
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)
