Who doesn’t like the pleasure of evening tea? The tiredness of the day goes away with hot tea and biscuits. But have you ever thought that by saving just Rs 20 daily you can become a millionaire? It may sound a bit strange, but it is true. The only difference is in changing the direction of thinking and habits.
small savings, big thinking
Suppose you spend about ₹20 on evening tea every day. This expenditure becomes ₹ 600 in a month and ₹ 7,200 in a year. Now if you invest this amount in a Systematic Investment Plan (SIP) and consider an average annual return of 13%, then this small saving can do wonders in the long run.
How to make crores
If someone does an SIP of ₹600 every month for the next 40 years starting from the age of 30, he will invest a total of ₹2.88 lakh. Now if he gets 13% annual return, then this amount can be more than ₹ 78 lakh by the age of 70 and if the same person saves ₹ 30 daily and invests ₹ 900 in SIP in a month, then after 40 years he can get up to ₹ 1.17 crore.
There’s magic in compounding
The specialty of SIP is that it gives the benefit of compounding i.e. interest on interest. The sooner you start, the more your money grows. An average return of 12-15% is possible in SIPs done through mutual funds, although it depends on the market conditions.
Risk along with return
Let us tell you that mutual fund SIP is an investment related to the stock market and there is risk in it due to market fluctuations. Therefore, before investing, diversify your portfolio and take advice from a financial expert.
How to invest in SIP
SIP i.e. Systematic Investment Plan is a means of investing in mutual funds. You can create your account on any trusted investment platform or mobile app (like Zerodha, Groww, Kuvera, Paytm Money etc.) and then start investing by setting the monthly SIP amount as per your convenience. Once you activate auto-debit, money will be deducted from your account on the scheduled date every month and invested in the chosen mutual fund.