SIP Investment: When your monthly salary is low, your excuse for not investing money can be what I will get in return, even if I save some money from my low salary and invest it in a scheme. But investment doesn't mean you need deep pockets and a lot of money to invest. Even if you save Rs 500 a month, make it a habit to invest it somewhere. Little investments made over the years can do wonders.

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To understand it more precisely, if you earn Rs 30,000 per month, you have a good chance to make Rs 1 crore through regular monthly SIP investments in a few years.

The golden rule of investment, 50:30:20, says that you should save 20 per cent of your monthly earnings.

But let's cut it down to just 13.33 per cent, which for a person earning Rs 30,000 salary a month will be Rs 4,000.

Even investment through that little saving of Rs 4,000 a month will be sufficient to build a retirement corpus of Rs 1 crore. We will tell you, how?

SIP can create a fund of more than Rs 1 crore

Though there are many retirement options available in the market, systematic investment plans (SIPs) have emerged as one of the most popular investment choices.

In the last few years, SIPs have given an average return of up to 12 per cent.

Since SIP investment also provides the benefit of compound interest, investing in it for a long time can help you get good returns.

"With SIPs, you can invest for your preferred time horizon – long, medium, or short-term – and you can invest in your preferred asset classes – equity, debt, gold, or a suitable combination of all of these," said Adhil Shetty, CEO, BankBazaar.com. 

 

Know how to make Rs 1 crore through SIPs 

If you invest Rs 4,000 every month in an SIP for about 30 years, on maturity, your total investment in SIPs will be Rs 14,40,000, and you will get Rs 1,26,79,655 as capital gains at a return rate of 12 per cent. You will get a total of Rs 1,41,19,655 on maturity.

Whereas if you invest Rs 4,000 every month for 25 years, at the rate of 12 per cent, your total investment will be Rs 12 lakh, your capital gains will be 63.91 lakh, and you will get Rs 75,90,540 on maturity.

However, if you invest Rs 4,000 a month for 27 more months, which means for a total of 27 years and three months, your total investment will be Rs 13.1 lakh, capital gains will be Rs 88.07 lakh, and you will get Rs 1.01 crore on maturity.

 This calculation is of the average return; if you get better returns than 12 per cent, you can make even more profit.

One of the best things about investing in SIPs is that you can increase your investment at any time with an increase in your monthly income.

The better the investment and the longer it is for, the better the benefit you can get.

"Use the step-up SIP function and increase the size of your SIPs as your income grows. It will help you achieve your goals faster. For example, if you invest Rs 5,000 per month in an equity fund returning 12 per cent over 20 years, you get a corpus of Rs 50 lakh. But with a 10 per cent annual step-up, you get a corpus of Rs 93.55 lakh with the same investment. This helps you achieve your financial goals faster," said Shetty.

(Disclaimer: SIP investments are subject to market risks. Do your own research or consult your advisor before investing.)