How much of my salary should go into SIPs? (2024)

FAQs

How much should I put in SIP? ›

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.

Generally, experts recommend investing around 10-20% of your income. But the more realistic answer might be whatever amount you can afford. If you're wondering, “how much should I be investing this year?”, the answer is to invest whatever amount you can afford!

SIP interest rates for various market linked funds may vary. On average, for large cap equities, a return of 12-18% can be expected whereas from mid-cap equities, a return of 14-17% is expected. However, in the case of a long-term debt-based fund, one can expect a return of 6 – 9 % p.a. Why we need your mobile number?

If you invest ₹30,000 per month in a Systematic Investment Plan (SIP) for a period of 5 years, assuming an average annual return of 12% on your SIP investment, using the SIP calculator, your returns will be: Your invested amount will be: ₹18,00,000. Estimated Returns will be will be: ₹6,74,591.

While the majority of your SIP investments are spread across multiple funds, the 7-5-3-1 rule suggests setting aside a portion for a one-time lump sum investment. This allows you to capitalize on specific opportunities or market conditions.

The most common way to use the 40-30-20-10 rule is to assign 40% of your income — after taxes — to necessities such as food and housing, 30% to discretionary spending, 20% to savings or paying off debt and 10% to charitable giving or meeting financial goals.

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

Although that percentage can vary depending on your income, savings, and debts. “Ideally, you'll invest somewhere around 15%–25% of your post-tax income,” says Mark Henry, founder and CEO at Alloy Wealth Management. “If you need to start smaller and work your way up to that goal, that's fine.

SIPs offer the potential for higher returns over the long term compared to FDs, which typically offer fixed returns but lower potential growth. But it it important to note that there are potential risks involved while investing in mutual funds via SIP as well, since they are market linked.

What is a good SIP return? ›

Minimum Investment: Rs. 5,000 for lump sum and Rs. 1,000 for SIP. Expense Ratio: 0.62% (Direct plan) 5-Year Returns: 21.22% 10-Year Returns: 11.15%

How much is Rs. 5,000 for 5 years in SIP? If you invest Rs. 5,000 per month through SIP for 5 years, assuming 12% return. The estimate total returns will be Rs. 1,12,432 and the estimate future value of your investment will be Rs. 4,12,431.

For example, the total interest on a $30,000, 60-month loan at 4% would be $3,150.

By the time you're 25, you probably have accrued at least a few years in the workforce, so you may be starting to think seriously about saving money. But saving might still be a challenge if you're earning an entry-level salary or you have significant student loan debt. By age 25, you should have saved about $20,000.

If you were to invest Rs 1,000 per month into an equity SIP over a span of 30 years at 12 per cent per annum, you would have invested only Rs 3.6 lakhs. However, your portfolio's value would have grown to an impressive Rs 34.9 lakhs.

With the help of compounding, your monthly investment of 10000 can help you accumulate Rs 1 crore, Rs 1.9 crore, and Rs 3.5 crore in 20, 25, and 30 years, respectively, even if you manage to get 12 per cent annualised returns from your mutual fund investments.

It is an automatic monthly education process, which starts with 100 Rs per month. You can decide your SIP amount as per your income. It is a long-term investment for the optimal return. SIP is based on the “Start Early, Invest Regularly” mantra.