Mutual fund calculator: Genius don’t do different thing, they do things differently. This proverb holds well on the smart investors. For example, let’s take mutual fund investment via Systematic Investment Plan or SIP route. It’s well known that in the long-term, mutual fund SIP return helps an investor get compounding benefits and hence, an investor can maximise one’s return if the mutual fund SIP is for long-term. So, majority of mutual fund SIP investors goes for long-term investment, but how many of them increase their monthly investment with the rise in their income? According to tax and investment experts, one should increase one’s monthly SIP amount with increase in annual income. Experts said that step-up SIP is better as it helps an investor achieve its investment goal in much lesser time.
Asked about how much monthly SIP will be needed to accumulate ₹1 crore when an investor turns 40 years old; SEBI registered tax and investment expert Jitendra Solanki said, “Mutual Fund SIP return calculator suggests that if an investor goes for long-term say more than 10 years, then one’s annual return would be 08-12 per cent, depending upon the risk-appetite of the investor. Since, the investor wants to achieve an ambitious ₹1 crore investment goal by the time, he or she turns 40 years old, equity mutual fund will be the best option as the investor will have to take risk for achieving this whopping ₹1 crore investment goal.”
Advising step-up SIP instead of simple flat mutual fund SIP; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, “Simple SIP won’t help an investor to achieve this ₹1 crore investment goal at the age of 40. For that, the investor will have to go for equity mutual fund with annual step-up. Equity mutual fund yields at least 12 per cent return and step-up helps the investor to start the SIP with least possible monthly investment for achieving the investment goal.”
On how much annual step-up would be advisable for the investor to achieve ₹1 crore investment goal at the age of 40, Kartik Jhaveri of Transcend Consultants said, “Generally, 10 per cent annual SIP is advised. But, here the investment goal is highly ambitious. So, the investor should maintain 15 per cent annual step-up and the investor will have to start SIP at 25 years of age. So, that he or she will have 15 years for investing.”
Mutual fund SIP calculator
Assuming 12 per cent annual return with 15 per cent annual step-up SIP, the mutual fund return calculator suggests that an investor will have to start with ₹9,000 monthly SIP at the age of 25. Then the investor will be able to achieve ₹1 crore investment goal in next 15 years.
As per the mutual fund calculator, ₹9000 monthly SIP for 15 years at 12 per cent annual return with 15 per cent annual step-up will help an investor accumulate ₹1,02,35,278 or ₹1.02 crore.
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