whether you dream of a beach house, a luxurious sports car, or a piece of land on the moon - all of these goals can be achieved if you invest regularly through a disciplined and systematic investment plan (SIP). but to generate a huge corpus and achieve your big dreams you need to have a little patience and specific investment planning.
if you are consistent and disciplined in your investment approach, you can easily generate wealth over time with small investments per month. let’s see what are the important points that you should keep in mind to generate wealth over time:
#1. start saving smartly
as the famous phrase says, a penny saved is a penny earned, the habit of saving is the first step towards wealth creation. but most of us are unable to save every month as we wish due to unseen/unplanned expenses. the smart way of saving every month is to keep the predetermined investment amount aside as soon as you receive your monthly income. so, instead of waiting till the end of the month to plan your investment, fix an amount and invest it monthly as soon as you receive your income, and, manage your other expenses with the rest of the amount.
for example, say your monthly income credited into account is ₹50,000, and you want to save ₹15,000 every month. so as soon as you receive your monthly income, put ₹15,000 away as investments, and then manage your monthly expenses with the rest of the money, i.e. ₹35,000. also, as your income increases, so should your investment amount.
in order to create wealth, it’s very important that you are consistent and disciplined with your savings and investment.
#2. invest your monthly savings to generate wealth
saving is good but not enough to create a strong corpus. to build wealth, you need to channel your monthly savings into different types of investment tools. there are different types of investment tools available in the financial market, each with a specific feature. as an investor, you need to select the right investment tool for yourself based on your investment goal.
here’s a step-by-step guide to planning your investment and selecting the right investment tool for it:
#3. increase your investment periodically
whenever your income increases, you should increase your investments as well. also, note that you should increase your investment in the same proportion as the rise in your level of income. for example, if your income increases 10 percent at the end of year 1, then in year 2, you should increase the proportion of investments by 10 percent. likewise, if you get a 20 percent hike at the end of year 2, then in the year 3, increase your investment by 20 percent. it will help you multiply your investment over a period of time.
#4. invest lumpsum amount when possible
whenever you receive a bonus, a maturity amount, or a lump sum in hand, instead of spending the entire amount, invest a part of it in your existing mutual fund. it will help you grow your money faster. also, if you add a lump sum amount into your mutual fund, you can achieve your goal before time; or if you want to keep the tenure fixed, then your maturity corpus will be more than the expected target amount.
the final word
wealth creation requires patience and time. if you are consistent and disciplined in your savings and investments, you can create a strong corpus over time to live a comfortable life all through. you can use the CRED SIP calculator to plan your monthly investment and create a regular and disciplined investment schedule. it will help you find out how much corpus you can generate by investing a certain amount for a specific tenure.
CRED SIP calculator is an easy-to-use financial tool that can help you find out the right amount, tenure, and returns rate to achieve your goals. you just have to open the CRED SIP calculator, and select the investment amount, expected rate of interest, and investment tenure. once you enter all these details, the CRED SIP calculator will automatically display the maturity amount along with the amount invested and interest accrued.
use the CRED SIP calculator now