Are you able to save, and do you want to invest Rs 25000 per month ?

There are many ways to invest Rs 25000 per month, and if done right, over the years you can create significant wealth with the power of equity and compounding.

However, you can also end up significantly destroying your wealth if you just end up saving and not investing it in the right way.

**The first Question to ask yourself is…**

Why are you investing your money ?

Is it to meet a particular goal like retirement or child’s education or just to grow your money

### The second question is…

When will you need the money back ?

This is because there are many different ways in which you can invest your money – Recurring Deposits, PPF, Equity Mutual Fund SIPs, Real Estate etc

They all have different risks and returns while some like PPF have lockin periods.

### How much can Rs 25000 per month grow ?

**If you save Rs 25000 per month for let’s say, 30 years your total savings of Rs 90 lakhs ( 3 lakhs per year x 30 years ) can grow as per the chart below.**

Basically, Rs 25000 per month or Rs 90 lakhs over 30 can grow as follows:

**1.) In a Savings Account earning 4% interest: Rs 175 lakhs ( Will about just double )**

**2.) In a Recurring or FD earning 6% interest: Rs 2.5 crores**

**3.) In a PF or Public Provident Fund at 8%: Rs 3.7 crores**

**4.) In a Equity MF SIP earning 15% return: Rs 15 crores.**

As you can see, there is a wide variation – And different risk associated with different products.

### So How Should One Invest Rs 25000 per month ?

The simplest method is to follow the time horizon or when you will need the money.

If you need the money in

- Less than 1 year, leave it in your savings account or create a recurring deposit or Liquid Mutual Funds
- 1 to 3 years: Start a Recurring Deposit / SIP in Ultra Short Term Debt Mutual Funds
- 3 to 7 years: A mix of Debt + Large Cap Equity Mutual Funds SIPs
- 7 to 15 years: More of equity and less of Debt assets
- 15 to 30 years: Mix of PPF and Equity SIPs

Don’t just look at the returns of a product – Evaluate the risk and liquidity ( lockin periods if any ) and more importantly focus on how much you will need for your goal.