SIP: The 21X10X12 formula of SIP is not a complicated solution. You can understand this easily. Suppose you want to make your child a millionaire, then you will have to invest regularly through SIP for about 21 years in his name.

SIP: Everyone spends most of their hard-earned money on their family to improve the future of their children. Its sole objective is to improve the income of children. But, half of the people of India still do not know SIP for savings and the biggest thing is that they do not know the 21X10X12 formula of SIP. If they know this formula, every child will be seen as a millionaire in the coming days. Come, let us know what is SI’s 21X10X12 formula and how any child can become a millionaire with it.

What is SIP?

Systematic Investment Plan is called SIP in short. SIP is a powerful means of investing in mutual funds. By investing in mutual funds through SIP, the Asset Management Company (AMC) invests the investors’ money in the stock market, due to which they get better returns than fixed deposits (FD) and savings schemes. By investing in mutual funds through SIP, investors get returns with compounding.

What is a mutual fund?

Mutual fund is an investment scheme in which many investors pool their money and invest in stocks, bonds and other securities. These funds are managed by professional asset managers, who are also called portfolio managers. Before investing in mutual funds, it is very important to know some important things. Many people pool their money together to invest in mutual funds. The money of all the people investing in these funds is pooled together and invested in various securities. The profits in these funds are divided among all the investors according to their contributions. To invest in mutual funds, you get information about all the investments made in the fund and the income from them. You may also have to pay some fees to invest in mutual funds.

What is the 21X10X12 formula of SIP?

The 21X10X12 formula of SIP is not a complicated solution. You can understand this easily. Suppose you want to make your child a millionaire, then you will have to deposit around Rs 10,000 regularly every month through SIP in his name for about 21 years. You get about 12% interest annually on this money. The annual interest gets compounded every year. Then in 21 years a fund of Rs 1 crore more will be deposited in the name of your child.

This is how you will make Rs 1 crore through SIP in 21 years

Now suppose that if you deposit Rs 10,000 every month through SIP in the name of your child and deposit it continuously for 21 years. Your total investment amount in these 21 years will be Rs 25.20 lakh. The total amount of interest on this investment amount at the rate of 12% per annum will be Rs 88,66,742. Now if you add the total investment amount of Rs 25.20 and the total interest amount of Rs 88,66,742, then approximately Rs 1,13,86,742 will be deposited in your child’s fund

This is how you will make Rs 1 crore through SIP in 21 years

The formula to calculate the return on a Systematic Investment Plan (SIP) is:

• M = (P * ((1+r)^n -1)/r) * (1+ r)
• Where:
  • M: is the maturity amount 
  • P: is the monthly SIP amount 
  • r: is the monthly rate of interest 
  • n: is the total number of SIP payments

You can use a SIP calculator to help you visualize your long-term financial growth and make informed investment decisions. To use a SIP calculator, you’ll need to provide the following information: Total amount invested, Time frame, and Expected rate of return

The actual amount of money you receive may differ from the calculator’s result due to market volatility

There are many types of Systematic Investment Plans (SIPs), including:

Regular SIP: A common type of SIP where investors contribute a fixed amount of money at regular intervals

Flexible SIP: Allows investors to change the amount they invest based on their cash flow and financial situation

Top-up SIP: Allows investors to increase their SIP amount at predetermined intervals

Trigger SIP: Allows investors to move between allocated schemes based on the index of the mutual fund 

Perpetual SIP: Allows investors to continue their SIP investments without defining an end date

SIP with Insurance: A type of SIP that includes insurance

Multi SIP: A type of SIP 

SIPs are a popular way to invest in mutual funds. They can help investors achieve financial goals by starting with small amounts and benefiting from rupee cost averaging

Which SIP category is best?

Best SIP to invest now:

• HDFC Mid-Cap Opportunities Fund. … 
• Parag Parikh Flexi Cap Fund. … 
• ICICI Pru Bluechip Fund. … 
• HDFC Flexi Cap Fund. … 
• Nippon India Small Cap Fund. … 
• HDFC Balanced Advantage Fund. … 
• ICICI Prudential Equity & Debt Fund. … 
• ICICI

What are the 7 types of investments?

Among the top 7 types of investments are stocks, bonds, mutual funds, property, money market funds, retirement plans, and insurance policies

Can I invest 1000 ₹ per month in SIP?

With SIPs, even small monthly contributions can grow significantly through the power of compounding. In 2024, investing just ₹1,000 per month in the right SIP can be a smart step toward achieving your financial goals, whether it’s for retirement, education, or simply wealth creation

Which SIP gives 30% return?

Equity Mutual Funds: Five-year SIP PerformanceSchemeCurrent value of Rs 10,000 monthly SIP (Rs)XIRR(%)HDFC Small Cap Fund13,24,099.3632.75%SBI Contra Fund13,07,514.4132.21%Motilal Oswal Midcap Fund13,03,586.4832.08%Tata Small Cap Fund12,98,194.3131.90%

Is SIP better than fd?

SIP is generally considered better for long-term wealth creation due to potential higher returns from investing in mutual funds, but it comes with market risk. FD, on the other hand, offers guaranteed returns but tends to have lower returns compared to equity investments over the long term.

Can I withdraw SIP anytime?

Ans: Yes, you can withdraw money from your SIP anytime. However, be aware of potential exit loads and tax implications, especially if you cancel before a year

What is the 15 rule in SIP?

To calculate the 15-15-15 rule, multiply 15% of your monthly income by 12 to get the annual investment amount. Invest this amount monthly for 15 years in a mutual fund targeting 15% annual returns. Use an SIP calculator to project potential earnings based on these inputs.

How to start SIP?

Mutual Funds: How to open an SIP account online? A step-by-step guide

1. Step 1: Collect your documents. … 
2. Step 2: Select your platform. … 
3. Step 3: Fulfill the KYC requirements. … 
4. Step 4: Enroll and establish an account. … 
5. Step 5: Select your SIP. … 
6. Step 6: Configure your SIP particulars. … 
7. Step 7: Connect your bank account.

Who is eligible for SIP?

The investor must be at least 18 years of age. The investor must have a bank account with the required funds. The investor must be KYC compliant.

What are the risks of SIP?

No guarantee of returns: While SIPs mitigate the risk of market timing, they do not guarantee profits or protection against losses. The returns are dependent on the fund’s performance, which can vary. Inflation risk: Inflation can erode the purchasing power of investments

SIP better than PPF?

In conclusion, deciding between SIP and PPF hinges on your financial objectives, risk tolerance, and investment horizon. SIPs offer flexibility and growth potential but with market risk, while PPF provides security and guaranteed returns, ideal for conservative, long-term planning

How do I know which SIP is best?

Look Over The Fund’s Performance:

While choosing the best SIP to invest, it’s important to study the historical performance of the returns of those funds. It would be better to look over the trends for past 5 to 10 years and compare within the funds to understand whether they can withstand market volatility or not

Disclaimer : this is not a investment advice connect your financial planner for your investments

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