Do you want to Invest Rs 50000 ? Since you are thinking of investing, we assume you are first able to save Rs 50000 per month.
If you save money, but leave it idle in your savings bank account, it will earn just 4-6% interest and will lose value over time because of inflation.
Start A SIP in Equity Mutual Funds. Over the years you can create significant wealth with the power of equity and compounding.
Here is how much your money can grow at the rate of ~15% per annum if you invest Rs 50000 per month.
- After Year 1: ~ Rs 6.9 lakhs
- Year 3: ~Rs 24 lakhs
- Year 5: Rs 46 lakhs
- Year 10: ~ Rs 1.4 crores
- Year 20: ~ Rs 7 crores
- Year 30: ~ Rs 30 crores
The longer you invest for, the more your money grows.
However, unlike your life insurance policies or PPF, there are NO lockin periods for Mutual Funds – You are free to withdraw your money anytime you want.
If you don’t invest it in Equity SIPs and instead put it in a Recurring Deposit or Public Provident Fund, your returns will be much lower as their returns are only about 7 – 8% per annum.
Here is a comparison of how much more, SIPs in Equity Mutual Funds can grow compared to RD / FDs and PPF.
While the difference is small in the initial years, the gap really widens over the long term – And if you don’t invest in Equity, you are basically leaving a lot of money on the table.
Start with a mix of large, mid and small cap funds to have a diversified portfolio to grow your money better.