Mutual funds are among the best investment options today. This is such a great option that you can become a millionaire in a few years by investing a little money through SIP (Systematic Investment Plan) in a mutual fund. SIP is considered the best option for investing in mutual funds. Basically by investing money in mutual funds, you invest in stocks. Mutual funds benefit from the rise in stocks and this is the return you get.However, this happens in equity schemes. In the debt scheme, your money is invested in bonds or government securities. If you follow some tips, you can definitely become a millionaire. Let's know the most important tips for investing in mutual funds.
Do SIP with target in mind:
Experts believe that your investment should be for some or the other target. There may be targets such as children's education or marriage. Financially-informed mutual funds also recommend linking SIP to a similar target. This will keep you informed about how close you are to your target. Also, whether you have to increase investment or not. For example, if you need Rs 20 lakh for downpayment of the house within 2 years, then you have to do a monthly SIP of 30 to 40000 rupees.
Increase SIP on yearly basis:
SIP will continue your regular investment. But do not keep the SIP amount the same, but increase the percentage amount (you can increase more or less) in SIP every year as much as your salary increases. This will mean that you will be able to complete the target ahead of time. Your savings and returns will also increase.
How to decide the date of SIP: The experts recommend that you set different dates for different SIPs. As your three SIPs are deducted, dates 1, 11 and 21 can be set. This will always keep some money in your account. If all the money is invested on a single date, then you can face any problem at any time. Actually, this method is also useful in reducing the risk of timing of the market.
Stopping SIP is also necessary: As much as the mutual fund you consider investing through SIP route, it is also necessary to stop it at one time. If you are investing according to the target, then stop SIP upon approaching it. Then put your FD in options with guaranteed returns. In fact, a sudden drop in the stock market can reduce your investment. Therefore, the risk of needless risk should be avoided.
Be a millionaire like this: To become a millionaire you have to start very soon. If you start investing at the age of 20, then invest Rs 30 every day, ie Rs 900 a month, in a diversified mutual fund through SPI. You will have to invest this continuously for 40 years. Suppose you get 12.5% return every year in these years, then after 40 years your total investment amount will be Rs 1.01 crore. If you are old, then you will have to invest more accordingly.