Starting investments at an early age can help you achieve financial stability closer to the time of your retirement. In fact, investing only a small amount over a long period of time can help you reap amazing returns. Once you’ve set your financial goals, it’s time to work on how to achieve those investments. Diwali can be the best time for you as most of the employees of private and government organizations get annual bonus during this time of the year. Instead of spending your Diwali bonus on those extra purchases, you can invest it to become a millionaire in a little over two decades.
every year Indian Rail Bonus is given to the employees during Diwali. The maximum bonus given to him for 2022 is Rs 17,951. This amount, if invested with proper planning, can yield more than Rs 25 lakh.
If Rs 17,951 is invested directly in equity mutual funds for 25 years, they can have returns of more than Rs 3 lakh. Some equity mutual funds offer an interest rate of 12 per cent for investments above 3 years and a total investment of Rs 17,951 for 25 years at this rate can return a total of Rs 3,05,168.
However, if you invest an amount equal to the bonus every year for 25 years under Systematic Investment Plan (SIP) in equity mutual funds, it can make you a millionaire. An investment of Rs 17,951 for 25 years, at an annual interest rate of 12 per cent, can create a corpus of Rs 26,80,693.
You can split the total bonus amount into smaller installments and invest it in mutual funds for a good return on investment. For example, Rs 17,951 divided into monthly installments for one year (12 months) would be approximately Rs 1500. If you continue to invest Rs 1500 every month under the SIP scheme in mutual funds, for 25 years at 12 per cent per annum interest rate, the small amount can turn into 25,56,000.
However, equity mutual funds are exposed to market volatility and investments can be risky. Choose mutual funds carefully as per your investment horizon and financial goals before investing your money. It is wise to consult a professional investment advisor before making any investment.
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