Why investing in mutual funds through a Systematic Investment Plan (SIP) provides the flexibility to make partial or full withdrawals, pause the SIP, or change the invested amount at any time.
An investment of Rs 5 lakh with an expected annualized compounding return of 20% after 20 years will result in a maturity amount of Rs 1.91 crore?
In simpler terms, assumption ,if land was purchased in 2002 for Rs 5 lakh per Kanal, it would now be worth Rs 1.91 crore (representing a 20% annualized return).
However, it is not logically possible for the current value of Rs 1.91 crore after 20 years with a 20% annualized return to be Rs 73 crore per Kanal. Now the question arises: which asset class can provide a double digit return annually?
Insurance is not the answer, but direct financial assets are – albeit requiring a lot of knowledge. The best course of action is to invest in quality mutual funds and accept short term volatility, as historically, equity funds have more potential.
It is important to carefully choose funds from the 11,000+ schemes available and to invest in a staggered manner.
SIP is the best solution for long term investments, and individuals are encouraged to consult financial professionals, SEBI REGISTERED trusted, experienced service provider.
