Mutual fund investment: What is 555 formula in SIP? Know how to become crorepati starting with just Rs 2,000 investment per month

The 555 Formula states that you begin your investing journey in mutual funds at the age of 25, invest for the following 30 years, raise your investment money by 5 per cent each year, and retire at the age of 55.

The 555 Formula refers to a plan for growing investment by 5 per cent per year over 30 years.

Everyone wants to become a crorepati to live a better life, but they don't know what to choose for their investment plans. There are several plans and investment strategies in the market, and out of those, the 555 formula is one of the good investment plans.
 
Now, let's see how to become a crorepati by just investing Rs 2,000 per month using the 555 formula.
 
At the age of 25, you must begin investing in mutual funds with Rs 2,000 in SIPs.
 
Every year, you must raise your investment money by 5 per cent and maintain it for the next 30 years.
 
If you earn an average return of 12 per cent over 30 years, your total investment will be Rs 15.95 lakh.
 
Your expected capital gains will be Rs 89.52 lakh, and your total returns over 30 years will be Rs 1.05 crore.
 
It implies that even if you retire at the age of 55, you will have Rs 1.05 crore in retirement savings.

What will you get if you invest Rs 5,000 per month?

If you begin your investment journey with a Rs 5,000 monthly investment and increase your monthly SIP by 5 per cent, your total investment at a 12 per cent return in 30 years will be Rs 39.86 lakh, the estimated capital gains will be Rs 2.24 crore, and the estimated returns at the age of 55 will be Rs 2.64 crore.