Time is money… if you invest more than 5 years your profit will be 20 years.

New Delhi. Every person wishes to have a lot of money one day, so that he can fulfill his future needs. But, you will have to wait for a long time to do so. If you believe that time is money, you will spend more time to make more money. If you want to save money for your child’s education or your daughter’s marriage, starting SIP in mutual funds can be a good option.

Suppose you start investing with a small amount in SIP i.e. Systematic Investment Plan, how much money can you earn from it in 20 years? The first rule of any investment is to determine your expenses and see how much you can save each month. What most people do is spend first and then invest what’s left over. But, it should be done in such a way that first create a goal and invest and then proceed with the expenditure.

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How much return on an investment of 5 thousand rupees?
Assuming you can save only Rs 5,000 from your expenses, how much can you save for 20 years with this small investment? Now if you earn 12% annual return on SIP and invest Rs 5,000 every month, the total investment amount will be Rs 12 lakh only. According to 12% return on this you will get profit of Rs.38 lakh and after 20 years your total amount will be Rs.50 lakh.

If you return 10 thousand rupees, you will become a millionaire.
Let’s say you have saved 5 thousand more from your expenses and can open a SIP of Rs 10 thousand every month, how much will you save? Obviously, if you have doubled your investment, the profit will also be doubled. That is, on a SIP of Rs 10,000, your total investment will be Rs 24 lakhs over 20 years, while you will get a profit of Rs 76 lakhs and the total amount will reach Rs 1 crore.

If you invest time instead of money…
Let’s assume you don’t have a lot of money to invest and what if you could just extend the time. As we mentioned above time is money…obviously, if you spend time instead of money on investments, you can still earn huge profits. Suppose you stay on the SIP of Rs 5000 for 25 years instead of 20, you will get Rs 95 lakh instead of 50, meaning your money will increase by Rs 45 lakh in just 5 years. Similarly, if you stay on a Rs 10,000 SIP for 25 years instead of 20 years, the amount will become Rs 1.90 crore, giving you a profit of around Rs 9 lakh in just 5 years.

Tags: business news, Investment Tips, Mutual fund