SIP: How can you make Rs 10 lakh from a SIP of Rs 2,000? Understand the calculation here..

Let's understand what is SIP, how it works, and how you can create a fund of up to Rs 10 lakh with a SIP of just Rs 2,000.

SIP i.e. Systematic Investment Plan, is a method in which you invest a fixed amount in mutual funds every month. This amount can be Rs 500 or even more.

The biggest advantage of SIP is that it makes investment easy, regular, and disciplined. Also, it gives the benefit of compounding. That is, interest on your investment, and interest again on that interest.

When you invest money in a mutual fund through SIP, you get units based on the net asset value (NAV) of that day. For example, if you invest Rs 1,000 and the NAV is ₹ 20, then you will get 50 units.

As the NAV increases, the value of your fund also increases. Regular investment in SIP also gives the benefit of rupee cost averaging, which helps you deal with market fluctuations in a better way.

Monthly investment Rs 2,000
Total tenure 15 years
Total investment Rs 3.6 lakh
Estimated return Rs 6.49 lakh
Total fund value Rs 10.09 lakh

Now let's talk about the real question, how can you make Rs 10 lakh with just Rs 2,000 per month's SIP? Suppose you are getting an average return of 12% every year, Monthly investment of Rs 2,000 Total tenure of 15 years Total investment of Rs 3.6 lakh Estimated return of Rs 6.49 lakh Total fund value of Rs 10.09 lakh

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