₹50,000 MF SIP can get you a Mercedes-Benz. But what is the tenure of investment?

But what if an investor wants to buy Mercedes-Benz and is willing to invest with discipline? how long a Will it take 50,000 SIPs to reach the target fund?

First of all, let’s understand the Mercedes-Benz C-Class (C 200 Variant 1496 cc, Petrol, Automatic (TC), 201 bhp) Price. The ex-showroom price of this car as on date is around 55 lakhs. However, by the time this car hits the road, you will have overpaid including the registration fee Insurance premium of 5.75 lakhs 2.25 lakh, and Tax Collected at Source (TCS). 55,000. So the on road price of this luxury car in Delhi will be around 64 lakhs.

Suppose you can invest SIP in any mutual fund 50,000 monthly, you can buy a Mercedes worth Rs. 64 lakh in seven years. This is assuming that investments in equity mutual funds grow at approximately 12% rate of return.

a moving target

The important thing you should consider here is inflation. The cost of the Mercedes-Benz C-Class (C 200 variant) may increase over the next seven years due to inflation. Hence, by the end of the seventh year, you may be unable to buy the same model by investing 50,000.

Amol Joshi, Founder, Plan Rupee Investment Services said, “A Will make a corpus of 50,000 SIP per month for seven years at 12% CAGR 65 lakhs. However, the price of a luxury car is also likely to increase over the years. If car price inflation is 5%, the price will be closer to 90 lakhs in 7 years. To meet this expense, your SIP should be 70,000 instead of 50,000.”

“Just like the way we account for inflation while calculating the retirement corpus, inflation needs to be accounted for for any major purchase or multiple year goals. And finally, remember that buying a luxury car is only one of the financial goals. Make sure you have other important goals like; Education fund for children and for your retirement kitty,” Joshi said.

Vishal Dhawan, Certified Financial Planner and Founder, Plan Ahead Wealth Advisors, said, “There is a possibility that when you are planning to buy a high-value property, there will be inflation on the cost as well as the price of the property. upkeep and maintenance, so it’s important to keep that in mind when you’re investing to buy that high-value property.”

take peppermint

Like any other car, a luxury car is also a depreciating item. Buying a luxury car is a matter of status. Also, such investments may require a large investment commitment. As mentioned earlier, there are routine maintenance and upkeep costs that also need to be factored in.

Allocate for such costly purchases only after taking care of other financial goals like retirement corpus, housing requirements, children’s education, their marriage, your medical and health care fund, etc.