Systematic Investment Plans are the most popular mode of investment in India. In December 2023, the total SIP inflow stood at ₹ 17,610 crore, taking the overall SIP inflow in the year to ₹ 1,83,741 crore. Employees who work in the private sector can benefit from the flexibility and convenience offered by SIPs to steadily grow their wealth by investing at regular intervals. SIPs and mutual fund investments can help private sector employees earn ₹1 crore and more in a span of twenty years through their investments.
SIP investment strategy for a private sector employee to earn ₹ 1 crore in 20 years:
A private sector employee can earn a sum of ₹1 crore in twenty years by following an SIP investment plan that helps them invest regularly to meet their financial goal. Here is a plan that a private sector employee can follow to earn this sum:
- The investor must assess and note down their financial goals: Noting down one’s financial goals is the first step that investors must follow before making any investment decision. In this case, the private sector employee’s financial goal is earning ₹1 crore in 20 years.
- They must conduct a risk assessment and plan their asset allocation: Every investment scheme poses a certain level of risk to the investor. The private sector employee must analyse their risk-taking capacity and determine the percentage of capital that they will invest in debt securities and in equities.
- The investor must select the right mutual fund investments: While choosing mutual fund schemes to earn ₹1 crore in twenty years, the investor must analyse a variety of mutual fund features such as the fund’s NAV (Net Asset Value), investment horizon, and past performance.
- They should use an SIP calculator to know their investment amount: An SIP calculator is an online tool that can help investors plan for their SIP investments in advance. The investor must enter three fields while using this tool – the monthly SIP amount, the expected rate of return (in %), and the time period (20 years, in this case). An SIP calculator can help a private sector employee know the exact investment amount that they must invest monthly for 20 years to earn ₹1 crore. A monthly SIP calculator can help an investor plan for their long-term SIP investments in this way.
- They must regularly assess their SIP investment: After investing in an SIP, a private sector employee must constantly assess their SIP investment to check if it is in alignment with their investment goals. If required, the investor must change the asset allocation and develop another investment strategy.
Systematic Investment Plans or SIPs can help private sector employees steadily grow their wealth and achieve their short- and long-term financial objectives. A private sector employee who invests regularly and assesses their investment on a regular basis can earn ₹ 1 crore in 20 years simply through SIP investments. Investors must use an SIP calculator to plan their SIP investment in advance.