SIP in Mutual fund:The trend of investing in mutual funds through Systematic Investment Plan (SIP) is increasing rapidly, and in December 2024, SIP inflows crossed the Rs 26,000 crore mark for the first time, where investors invested a total of Rs 26,459.5 crore. In November 2024, this figure was Rs 25,320 crore.This shows that people are giving importance to regular and systematic investments. Investing has become very important in today’s times, and people have started planning their future from an early age. Starting with a small amount and increasing it regularly can lead to a large sum in the long run.If you want to create a fund worth crores by retirement, then you can adopt the 25/2/5/35 formula, in which start investing from the age of 25, increase the investment by 2% every month, assume an average return of 5% and Maintain discipline for 35 years. This formula can prove to be absolutely suitable for investing in mutual funds through SIP.
What is 25/2/5/35 formula?
25: Start investing from the age of 25. 2: Start SIP of at least Rs 2000 every month. 5: Increase your SIP amount by 5% every year. 35: Continue this investment for 35 years. Through this formula you can create a big fund in the long run. This planning can be done easily through SIP in mutual funds. With this, you will have enough money at the time of retirement and you will be able to live your life comfortably.
Understand calculations in easy language with examples
Suppose, you start a SIP of Rs 2,000 every month. After this, it will increase by 5% every year.
This investment will work like this:
First year: For the first year you will invest Rs 2,000 every month. Second year: In the second year, 5% of Rs 2,000 i.e. Rs 100 will be added. Now we will invest Rs 2,100 every month. Third year: In the third year, you will invest 5% of Rs 2,100 i.e. Rs 105 to Rs 2,205. Every Year: Will keep adding 5% of the existing investment amount every year.
invest for 35 years
Continue this process continuously for 35 years. This way when you turn 60, you will have a good retirement fund. This simple approach helps your investments grow over time, creating a bigger corpus through compounding.
Disclaimer: Investing in mutual funds through Systematic Investment Plan (SIP) is subject to market risks. The information given in this article is for informational purposes only.