Often we think that investing with small amount is not a big benefit. But do you know that if you invest a lump sum of 1 lakh in mutual funds, then how much amount can it turn?
And the biggest thing is that this amount can also give you regular income of about 17,500 rupees every month for 30 years. Let’s understand its complete calculation,
How can a monthly income of ₹ 17,500 possible up to 30 years?
Suppose you invested 1 lakh rupees in a lump sum equity mutual funds where you get 12% annual return. After 30 years your investment will reach about 30 lakhs. Even after tax, you will have about ₹ 26.5 lakhs. Now you transfer this amount to a hybrid or date fund through SWP, where you get a safe return of about 7%.
With this, you can get regular income of Rs 17,500 every month and this income will continue for 30 years continuously. Overall, you must have withdrawn about ₹ 63 lakh with an investment of Rs 1 lakh and in the end you will have some savings left.
When and how to invest?
First of all it is important to know how important the choice of the right time and right place is for investment. If you start investing in mutual funds from today, especially in equity mutual funds, then your small amount can also be made in a long time. Its secret is that the formula to earn interest on compounding i.e. interest, the more time you give to investment, the more it will increase.
SIP and Lumpsum Investment: What is the difference?
There are two ways to invest in mutual funds SIP (Systematic Investment Plan) and lump sum investment. In SIP, you invest a little money every month, which gradually makes your big fund. At the same time, in lump sum investment, you invest a large amount at a time.