SIP is the digital piggy bank of your dreams. Just like you put some money in a piggy bank every day or every month, similarly through SIP you invest a fixed amount in mutual funds every month.

Age 30… This is the time when career is gaining momentum, responsibilities are increasing and a question arises in the mind – “Is it too late to start investing now?” If you are also thinking the same, then the answer is – absolutely not! Rather this is the right time to give wings to your financial planning. Today we are going to tell you about a superhit SIP plan, which is no less than a lottery especially for those in their 30s. You do not have to invest lakhs, just save ₹3000 every month. If you maintain this discipline for 30 years, then on retirement you will have a huge fund of ₹4.50 crores in your hand. And the most amazing thing? Out of this, ₹3.91 crores will be earned only as interest! Let’s understand this entire calculation layer by layer.

Equity mutual fund is good option

According to investment advisors, if you want a big fund, equity mutual funds can be a good option. If an investor makes his first investment of Rs 3000 at the age of 30 and invests regularly for 30 years, a big fund will be ready. Investing in the Systematic Investment Plan (SIP) of equity mutual funds is beneficial

What is sip

First of all, let’s make it simple for those who are unaware of SIP (Systematic Investment Plan). Imagine, SIP is the digital piggy bank of your dreams. Just like you put some money in a piggy bank every day or every month, through SIP you invest a fixed amount every month in a mutual fund. This is not rocket science, but a disciplined and automatic way of investing. This gives you an average benefit of market fluctuations and gradually builds a huge wealth.

According to the advisor, one should invest in mutual funds for 30 years. If one gets an estimated 15% return, then the path to becoming a millionaire becomes easy. The biggest advantage is compounding. This means that in 30 years, along with 15%, one will also get the benefit of compound interest. But, more important than this is the most accurate formula, which will make SIP even more successful. This formula is of Step Up SIP. You just have to keep a step-up rate of 10% every year.

The real magician: What is this Step-up SIP?

Now let’s come to that magical formula which will take your earnings to the skies. Its name is Step-up SIP.

Ordinary SIP

In this you invest a fixed amount (eg. ₹3000) every month for 30 years.

Step-up SIP

In this you start with ₹3000, but every year you increase your investment amount a little (eg. 10%). As your salary increases, so should your investment. This is its basic mantra. Starting with ₹3000, next year you will invest ₹3300, then the next year you will invest ₹3630. This small change makes a huge difference in the results.

Maha Muqabla: Normal SIP vs Step-up SIP
Let’s see from a table how a small change can make a big difference in 30 years.

Parameter Normal SIP Step-up SIP (Winner)
Initial monthly investment ₹3,000 ₹3,000
Investment period 30 years 30 years
Estimated annual return 15% 15%
Annual increase (Step-up) 0% 10%
Total investment ₹10,80,000 ₹59,21,785
Total amount (Maturity) ₹2,11,87,839 (₹2.11 crores) ₹4,50,66,809 (₹4.50 crores)

You see, a mere 10% annual increase more than doubles your final amount. This is the real power of step-up SIP.

The complete calculation of ₹4.50 crore
Now let’s come to the calculation we promised in the headline.

Your age: 30 years
Starting monthly investment: ₹3,000
Investment period: 30 years (when you turn 60)
Annual step-up: 10%
Estimated return: 15%

Result
Your total investment: ₹59,21,785
Wealth gain: ₹3,91,45,025
Total amount on maturity: ₹4,50,66,809
This is the magic of compounding and discipline. The money you invested is only about ₹59 lakh, but that money has earned you about ₹4 crore

Conclusion
To make money, you don’t have to be rich, but you have to be smart. The age of 30 is a great stage to start investing. Starting small with ₹3000 a month and increasing it little by little every year with your increasing salary can take you to the position you have only dreamt of. So don’t think, talk to your financial advisor today and climb the first step of your journey to becoming a millionaire

Frequently Asked Questions (FAQs)

Q1. What is SIP?

A: It is a method of investing a fixed amount every month in mutual funds.

Q2. Is a 15% return guaranteed?

A: No, the return of mutual funds depends on the market, it can be more or less than 15%.

Q3. Can I start SIP with less than ₹3000?

A: Yes, you can start SIP with ₹100 or even ₹500 per month.

Q4. What is a step-up SIP?

A: In this, you increase your SIP amount by a fixed percentage every year.

Q5. Can one really become a millionaire using this method?

A: Yes, it is absolutely possible to achieve this goal with disciplined investment over a long period of time and the right strategy.

The master stroke swp plan

An SWP (Systematic Withdrawal Plan) is a facility offered by mutual funds that allows investors to withdraw a fixed amount of money at regular intervals (e.g., monthly, quarterly, or annually) from their mutual fund investment. It’s essentially the reverse of a Systematic Investment Plan (SIP).
How an SWP Works:

• Lump Sum Investment: You typically start an SWP by investing a lump sum amount into a mutual fund scheme.
• Choose Withdrawal Details: You decide:
• Withdrawal Amount: The fixed sum you want to receive at each interval.
• Frequency: How often you want to receive the payments (monthly, quarterly, etc.).
• Date: The specific date of the month/quarter/year on which the withdrawal should occur.
• Unit Redemption: On the chosen date, the mutual fund house (AMC) redeems a certain number of your mutual fund units equivalent to the withdrawal amount.
• Credit to Bank Account: The redeemed amount is then credited directly to your registered bank account.
• Remaining Investment: The remaining units in your mutual fund scheme continue to stay invested and have the potential to grow.
  Benefits of an SWP:
• Regular Income Stream: Provides a predictable and steady cash flow, which is highly beneficial for individuals like retirees who need regular income to cover their expenses.
• Flexibility: You have the flexibility to choose the amount, frequency, and date of withdrawal. You can also stop, pause, or modify the SWP at any time. You can also withdraw additional amounts beyond the fixed SWP.
• Capital Appreciation: While you are withdrawing a fixed amount, the remaining portion of your investment continues to be invested in the mutual fund, allowing it to grow and potentially appreciate in value.
• Tax Efficiency (compared to FDs):
• Unlike traditional fixed deposits where the entire interest earned is taxable, in an SWP, only the capital gains portion of your withdrawal is taxed.
• For resident individual investors in India, there is no TDS (Tax Deducted at Source) on SWP amounts from mutual funds.
• Long-term capital gains (LTCG) from equity mutual funds (units held for more than one year) are taxed at a lower rate (10% over ₹1 lakh in a financial year, without indexation benefit). For debt funds, if held for more than three years (for investments before July 2024), LTCG with indexation benefit was applicable. For investments made after July 23, 2024, gains from debt funds are taxed at your slab rate.
• Rupee Cost Averaging (in reverse): When market NAVs are low, more units are redeemed to meet the fixed withdrawal amount, and when NAVs are high, fewer units are redeemed. This can be beneficial in managing market volatility.
• Disciplined Approach: Helps maintain a disciplined approach to withdrawals, preventing impulsive large redemptions.
  Who can benefit from an SWP?
• Retirees: A popular choice for retirees who need a regular income to manage their post-retirement expenses.
• Individuals seeking secondary income: Anyone looking to supplement their existing income from their investments.
• Those with a lump sum looking for regular payouts: If you have received a lump sum (e.g., gratuity, inheritance) and want to convert it into a regular income stream while keeping the principal invested.
  Before starting an SWP, it’s always advisable to consult with a financial advisor to determine the most suitable plan for your individual financial goals and risk tolerance.

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