Mutual fund calculator 2022: Rs 1 to Rs 5 crore for retirement in 12 years at 12% interest. Should you invest?

The Mutual Fund Calculator shows that the power of compounding in mutual fund investments begins to show its effect slowly, but over time it picks up speed, multiplying your wealth in surprisingly fast times. Although there are certain risks and hundreds of investment options in mutual funds, you can quickly reach all of your financial goals if you can identify a winning fund. This is possible with the help of our own research and professional advice.

Now suppose you have already identified a good fund that can give annual returns of 12% and you want to accumulate millions of rupees for your retirement. How long will it take to reach this retirement goal?

While in general, investments like bank term deposits can take years or a very large initial investment to reach the Rs 1 crore mark, mutual funds can help you reach Rs 5 crore in less than 25 years, provided you are willing to invest Rs 30,000 per month as an SIP and the annual return of the fund is 12%. Interestingly, the journey from Rs 1 to Rs 5 crore will take about 12 years. You can do the math yourself using a compound interest calculation.

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At 12% annual interest and Rs 30,000/month SIP, it will take you around 12 years to reach the first crore. The journey from Rs 1 to Rs 2 crore will take another 5 years, and thereafter your mutual fund earnings will be turbocharged with the power of compounding. It will take you about 3 years to reach 3rd crore while the journey from Rs 3 crore to Rs 4 crore will be completed in just 2 years and 3 months. A bigger surprise will come later as you will reach the Rs 5 crore mark in less than 2 years. (Learn more about why you should start MF investing early)

Should you invest in mutual funds?

Mutual funds are considered safer than stocks because they allow you to diversify your investments in multiple companies or stocks through single funds.

“With a good understanding, mutual funds are the safest investment strategy at all times. Even in a high inflation and bear market environment, it is prudent to invest in mutual funds as investments are long-term and short-term fluctuations should not worry investors,” says Rachit Chawla , CEO of Finway FSC.

“While inflation may negatively impact those who have money in their bank account, it will not affect those who have made smart long-term investments. Although high inflation can lead to greater market volatility in the short term, it is certain to open up new opportunities in the long term; this is where mutual fund investments become profitable,” he adds.

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“Mutual funds as an investment option for wealth building can be compounded, average cost in rupees, easy liquidity, professional management, diversification, variety, convenience as well as regulations Strict government regulations and full disclosure are handled by experts and require a relatively small amount to start an investment,” says Palka Arora Chopra, senior vice president of Mastertrust.

“In the current scenario where central banks are tightening their balance sheets and raising rates due to rising inflation and rising commodity prices, investors need to maintain their Systematic Investment Plans (SIPs) and if As the market continues to decline, with valuations falling below historical averages, they should gradually increase their equity allocation in a controlled manner,” she adds.

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Chopra suggests that an underinvested stock investor should take advantage of the current market correction and start rebalancing their portfolios to include more stocks.

(Mutual funds are subject to market risk. You should always read the offering document carefully and consult your financial adviser before making any investment decision)

Eleanor C. William