How to become rich: Your ₹5000 monthly SIP can help you grow ₹5.22 crore (2024)

How to become rich: To become a crorepati and attain wealth through Mutual Fund Systematic Investment Plans (SIPs), one should start by setting clear financial goals and choosing SIPs aligned with your risk tolerance and investment horizon. Personal Finance experts suggest beginning early, staying consistent, and utilise features like SIP step-up to increase contributions over time. With discipline and commitment, SIPs offer a pathway to long-term wealth accumulation and the attainment of financial goals.

Kartik Jhaveri, Director of Wealth at Transcend Capital, emphasises the potential for long-term wealth accumulation through mutual fund Systematic Investment Plans (SIP). “SIPs provide investors with the opportunity to tap into the average returns offered by the equity market. Through disciplined investing via SIPs, investors can gradually build a significant corpus over time," explained Jhaveri.

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Mutual Fund SIP calculator: The magic of compounding in long-term

He underscored the compounding benefits of long-term SIPs, wherein investors earn interest on their interest, making the duration of investment crucial for maximizing these benefits.

How to become rich through Mutual Fund SIP investments

Regarding the strategy to amass wealth and become rich through SIP investments, Pankaj Mathpal, MD & CEO at Optima Money Managers, emphasises the efficacy of the SIP step-up tool. “Under this monthly step-up plan, mutual fund SIP investors are advised to incrementally increase their monthly SIP contributions in line with their annual salary increments or income growth," said Mathpal.

Mutual Fund SIP calculator

To attain the desired outcome, maintaining a 15 percent annual SIP step-up rate is crucial. For instance, by initiating a monthly SIP of approximately ₹5,000 and maintaining an annual SIP step-up of 15 percent, coupled with a 15 percent annual mutual fund return, investors could potentially accumulate around ₹5.22 crore over 25 years.

SIP calculator

How to become rich: Your ₹5000 monthly SIP can help you grow ₹5.22 crore (1)

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.