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Due to the increase in inflation in recent times, people have become very cautious about financial planning. Now people do financial planning in advance for everything from marriage, children to old age.
If you also want to secure the future of your child, want to handle the responsibilities from higher education to marriage without any tension, then start financial planning as soon as his birth. If you start investing even Rs 5,000 every month in his name, then by the time your child turns 20, you can easily create a fund of up to Rs 50,000,00 for him. Technical information?
SIP will make money
In today’s time, SIP i.e. Systematic Investment Plan is very popular among the people. Through this you invest money in mutual funds. However, being market linked, it cannot guarantee fixed interest rates. But SIP is considered less risky than investing money directly in the market. Experts believe that SIP works for you in wealth creation in the long run because it gives the benefit of compound interest. Generally, SIP gives an average return of up to 12 percent. If you are lucky the returns can be even better.
know the calculations
Suppose you start a monthly SIP of Rs 5,000 with the birth of your child and invest in it continuously for 20 years. In such a situation, your total investment in 20 years will be Rs 12,00,000, but at the rate of 12 percent, you will get interest of Rs 37,95,740 on this invested amount. In this way, including the amount invested and interest in 20 years, you will get a total of Rs 49,95,740 i.e. about Rs 50 lakh.
Whereas, if you continue this investment for 5 years i.e. 25 years then you will get Rs 94,88,175. This is an amount which you cannot get in any scheme. If returns are around 15 percent then profits can be even better. You can invest this amount anywhere from your child’s career to his marriage.
(Disclaimer: Investing in mutual funds is subject to market risks. Do your research or consult your advisor before investing.)
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