SIP Quick Guide
SIP (Systematic Investment Plan) lets you invest fixed amounts monthly into mutual funds. Your money buys more units when prices are low and fewer when prices are high—automatically reducing risk through "rupee cost averaging."
Key Concept: Compounding Power
Invest ₹5,000/month for 20 years at 12% return: ₹12,00,000 invested becomes ₹44,50,000. Your returns earn returns. Starting 10 years earlier can mean ₹1.5 crore more at retirement.
Quick Tips
- Start with what you can afford—even ₹500/month compounds significantly over 20+ years
- Invest 15-20% of monthly income for optimal wealth building
- SIP works best for 10+ year goals; let compounding work without panic selling
- Never stop during market crashes—that's when your money buys the most units
- Equity funds average 12-15% returns; balanced funds give 8-12% with less volatility
The Formula
FV = P × [((1 + i)^n - 1) / i] × (1 + i)
- P = Monthly amount | i = Monthly rate | n = Total months | FV = Final value