Starting investments at a young age can help you to gain financial stability as you near your retirement time. In fact, investing even just a small amount over a long period can help you gain amazing benefits. Once you have set your financial goals, it is time to work on how to get those investments going. Diwali might be the best time to get you going as most of the employees across private and government organisations receive annual bonus during this time of the year. Instead of spending your Diwali bonus on making those extra purchases, you can invest it to turn into a millionaire in just a little more than two decades.
Every year Indian Railways employees are given the bonus during Diwali. For 2022, the maximum bonus given to them is of Rs 17,951. This amount, if invested with proper planning, could fetch more than Rs 25 lakh.
If Rs 17,951 is directly invested in equity mutual funds for 25 years they can have over Rs 3 lakhs in return. A few equity mutual funds offer interest rate of 12 percent for investments above 3 years and at this rate the total investment of Rs 17,951 for 25 years could return a total of Rs 3,05,168.
However, if you invest an amount equal to the bonus every year for 25 years under the systematic investment plan (SIP) in equity mutual funds it could make you a millionaire. Rs 17,951 invested each year for 25 years, at the annual interest rate of 12 per cent, could create a corpus of Rs 26,80,693.
You can also divide the total bonus amount into small installments and invest the same in mutual funds for a good return on investment. For instance Rs 17,951 divided into monthly installments for a year (12 months) would be nearly 1500. If you continue to invest Rs 1500 every month under the SIP plan in mutual funds, at 12 per cent annual interest rate, for 25 years, the small amount can turn into 25,56,000.
However, equity mutual funds are exposed to market volatility and the investments could be risky. Before investing your money carefully choose the mutual funds as per your investment horizon and financial goals. It’s wise to seek a professional investment advisor’s suggestions before making any investments.
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