👇Table of contents - Reading for fast and time less
👉 1) Power of compounding? And how it works in business field and investment.
👉 2) Power of compounding?
👉 3) What is mutual funds?
👉 4) What is SIP?
👉 5) Which mutual funds plan is more better?
👉 6) Somebody ask if I unable to pay monthly SIP duo to some reasons, then What?
7) Nifty 50 index fund, how much approx can give the returns?
👉 8) Somebody ask the question, any guarantee to get up to 15% returns, in mutual funds investment plan.
👉 9) Most common question to ask about, if I withdraw my investment amount, when markets Is going down, then what?
👉 10) Which platform is best to start investing in mutual funds.
👉 11) How to verify and check my SIP amount investing as I chosen the Nifty 50 direct growth plan or not?
👉 12) Somebody ask why do I pay monthly SIP, If I want to invest my 1 lakh rupees in Nifty 50 index fund, in a single time.Then what?
👉 13) How to know about Market overvalued or undervalued?
👉 14) Is better to invest in SIP, when market in undervalued position?
👉 15) Can I start my SIP on one time Investment?
👉 16) if I have invested in SIP, but my investment amount is going down? Then what I have to do?
👉 17) if I start my investment of Rs.10,000 monthly in SIP, then how much will get the total amount, after investing 10 years or 20 years for a long term investment?
👉 18) if I achieved my goal early, then what should I do?
👉 19) When I withdrawal my investment amount, then how much should I pay tax amount to government?
👉 20) SIP Calculator
👉 21) Compound Interest Calculator
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How To Get Rich With Power of Compounding Using Magic of SIP [ Latest Update 2022 ]
Introduction
How to grow rich with the power of compounding? Can compounding make you Rich? In this digital world, everyone wants to become rich and wealthy people, but majority of people investing his money in different different schemes, like FD, RD, Mutual funds, Share markets, Real state, Trading and more type of schemes available in the markets. But mostly people investing his money in these types of schemes, but they don't have sufficient knowledge about Power of compounding, and maximum people investing his money for short-term not for long term, but power of compounding, it works in long-term investment. everyone wants to get high returns from investment, if you understand the power of compounding, then you can become a rich and wealthy in 5 to 10years investment, and then you don't need to think more about your future, when you will retire from your jobs, then you can enjoy your life accordingly. How do you compound wealth quickly, How do you benifit from the power of compounding, How do I compound my wealth, these all type of questions, I have given the answer in this blog.
Example 2021
2021 initial amount
2021 Growth
Total invested in yearly
Startup
Starting
Initial Investment
Profit percentage 30%
Time of period
2021
Business
100,000
30,000 reinvest in every month
3,60,000
2022
Business
3,60,000
1,08,000 reinvest in every month
32,40,000
2023
Business
32,40,000
9,72,000 reinvest in every month
11,664,000
2024
Business
11,664,000
34,9,9200 reinvest in every month
41,99,0400
2025
Business
41,99,0400
12,579,120 reinvest in every month
151,165,440
Results
Business
Total Investment = Rs. 86,518,000
Total profit in 5 years = 17,188,320
Finally Total profit earnings in Business = 17,188,320
Example 2021
After completing years
No
Schemes
Monthly investment
Period of investing
Rate of interest
Total Investment
Estimated returns
Total value
1
Mutual funds (SIP)
Rs.10,000
10 years
14%
Rs.12,00,000.00
Rs.14,20,914.00
26,20,1914.00
2
Fixed deposit
One time Investment Rs.100,000
5 years
6.60%
Rs.100,000.00
Rs.37,653.00 payout on maturity
Rs.1,37,653.00 maturity amount
3
Recurring deposit
Monthly investment Rs.5000
10 years
7%
Rs.600,000.00
Rs.2,68,512.00
Rs.8,68,512.00
Example |
2021 | 2021 initial amount | 2021 Growth | Total invested in yearly |
|---|---|---|---|---|
| Startup | Starting | Initial Investment | Profit percentage 30% | Time of period |
| 2021 | Business | 100,000 | 30,000 reinvest in every month | 3,60,000 |
| 2022 | Business | 3,60,000 | 1,08,000 reinvest in every month | 32,40,000 |
| 2023 | Business | 32,40,000 | 9,72,000 reinvest in every month | 11,664,000 |
| 2024 | Business | 11,664,000 | 34,9,9200 reinvest in every month | 41,99,0400 |
| 2025 | Business | 41,99,0400 | 12,579,120 reinvest in every month | 151,165,440 |
| Results | Business | Total Investment = Rs. 86,518,000 | Total profit in 5 years = 17,188,320 | Finally Total profit earnings in Business = 17,188,320 |
Example 2021 |
After completing years | ||||||
|---|---|---|---|---|---|---|---|
| No | Schemes | Monthly investment | Period of investing | Rate of interest | Total Investment | Estimated returns | Total value |
| 1 | Mutual funds (SIP) | Rs.10,000 | 10 years | 14% | Rs.12,00,000.00 | Rs.14,20,914.00 | 26,20,1914.00 |
| 2 | Fixed deposit | One time Investment Rs.100,000 | 5 years | 6.60% | Rs.100,000.00 | Rs.37,653.00 payout on maturity | Rs.1,37,653.00 maturity amount |
| 3 | Recurring deposit | Monthly investment Rs.5000 | 10 years | 7% | Rs.600,000.00 | Rs.2,68,512.00 | Rs.8,68,512.00 |
1) Power of compounding? And how it works in business field and investment.
Now first we understand the power of compounding, power of compounding is the best way to become a rich and wealthy. Power of compounding, how it works in business field. Suppose you started your own business of digital marketing, and you invested your 100,000 lakh rupees in digital marketing Business, and after 1 year, your business get you 30% profit in every month. Then You reinvest the profit amount of business, and you continually reinvesting the profit amount in business till 5 years. After 5 years your business will become highly successful and then your net worth it will be millions of dollars in every year. Just because the compounding effects, you can say power of compounding, going duble continuously according to time duration.
Actively managed mutual funds, mutual funds where professionals looking top companies and investing the money to gain high profits and returns. And he looking manually to buy top companies shares, and who spending the daily such of time to looking best companies shares, that companies shares, it will gain high profits and returns for term investment.
Passively managed mutual funds, where no need to invest the money to buy companies shares manually, There are already set the rules to investing the money to buy companies shares automatically, who will return high profits in a long term investment. The best strategy to investing in mutual funds.
Example:
Where expense ratio, exit load and tax.
Expense ratio- 0.79% fees every year charged.
Example:
SBI Nifty index direct plan growth, in this plan you can see the top 50 companies shares holding by professional, and fund management team, a single person, Ravi Prakash Sharma. Where expense ratio, exit load and tax. Expense ratio- 0.17% including of GST.
Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
2) Power of compounding?
Compounding is the process of earning income on your principal investment plus the income earned. For instance, if you invest Rs. 10,000 in a mutual fund (at 10% interest rate per annum), you gain an interest of Rs. 1,000 at the end of the year. Now, you start making interest not just on the original Rs. 10,000 you invested but also on the Rs. 1,000 you have received as interest. Over time, this can grow into a large corpus of money. Consider a situation where you invest Rs. 5,000 in a mutual fund offering annual returns of 12%. If you invest in this fund for 15 years, you will earn a sum of Rs. 25 lakhs. Continue investing for five more years, and you are likely to achieve a corpus of Rs. 50 lakhs. Another five years and your corpus increase to Rs. 95 lakhs! This is the power of compounding. The longer you invest, the better could be your returns.3) What is mutual funds?
Where you can Invest your money, in mutual funds, best way to invest your money monthly wise in SIP term, and get returns upto 14% in mutual funds run by a professional, who investing your money in top companies, and according to gaining profit in mutual funds, he distribute your money in returns with profit, as profits gaining in mutual funds.2) Type of mutual funds?
- Actively managed
- Passively managed
- Actively managed mutual funds
Actively managed mutual funds, mutual funds where professionals looking top companies and investing the money to gain high profits and returns. And he looking manually to buy top companies shares, and who spending the daily such of time to looking best companies shares, that companies shares, it will gain high profits and returns for term investment.- Passively managed mutual funds
Passively managed mutual funds, where no need to invest the money to buy companies shares manually, There are already set the rules to investing the money to buy companies shares automatically, who will return high profits in a long term investment. The best strategy to investing in mutual funds.SBI Nifty index fund plan growth
According to the rule, passively managed mutual fund, here are example and some screenshots for you to understand easily.Example:
Passively managed mutual funds
ICICI prudential Life technology direct plan growth, in this plan you can see top 40 companies shares holding by professionals, and fund management team, Sankaran naren, Ashwin jain, Priyanka Khandelwal, Vaibhav dusad.Where expense ratio, exit load and tax.
Expense ratio- 0.79% fees every year charged.
Example:
SBI Nifty index direct plan growth, in this plan you can see the top 50 companies shares holding by professional, and fund management team, a single person, Ravi Prakash Sharma. Where expense ratio, exit load and tax. Expense ratio- 0.17% including of GST.
4) What is SIP?
Systematic investment plan, once you started your SIP in mutual funds, then whatever you selected your monthly SIP, it will automatically Start the Investing by your bank, automatically every month. Then no need to invest your money manually in SIP, mutual funds. This is best part of SIP in mutual funds.
5) Which mutual funds plan is more better?
Nobody can the answer correct, about which mutual funds is more better. but according to my studies, Index fund, SBI Nifty direct growth plan is the best plan to invest in mutual funds, john Bogle who found the index fund consept in investment, he says, which mutual funds is more best, nobody can the answer correctly, it depends in Markets research, he says, index fund is more better to Start your investment in mutual funds, this plan can give you good returns as compare to other mutual funds. According to Warren Buffett, the most successful investor in the world, he says, in long term period, index fund is the best to Start your investing in mutual funds. Nifty 50 index fund, is the best for long term investment, 2 rules for investment by Warren Buffett, "never lose your money, never forget rule no 1. In short due to volatility your investment amount can up and down in long run, but never become zero in index fund plan, mutual funds.6) Somebody ask if I unable to pay monthly SIP duo to some reasons, then What?
First you understand the Concept of investing, it's not your Bank EMI, if you unable to pay, then you have to pay fine extra, it's your mutual funds, investment plan, whatever you can start and stop the Investing in Mutual funds.
7) Nifty 50 index fund, how much approx can give the returns?
According to past experience, in Nifty 50 index fund, on an average get upto 15% returns in this, mutual funds, investment plan.8) Somebody ask the question, any guarantee to get up to 15% returns, in mutual funds investment plan.
No guarantee, but compare to bank returns, bank returns 4% to 6% P.A But It will give you more than Bank returns.9) Most common question to ask about, if I withdraw my investment amount, when markets Is going down, then what?
Best option for you Markets when going up and down but, if you investing the such amount for long run, then definitely, you will get high returns, at least start your investing for 10years. To get high returns. If you withdrawal your investment amount, when markets down, then it's your totally paper loss, and loss your time and investment.10) Which platform is best to start investing in mutual funds.
You can start your investment in mutual funds, directly visit to the Bank, suppose you visit to the SBI Bank, and you can say, I want to start my investment in Nifty 50 index fund Direct growth plan, you can start your SIP to simply fill the form and start, or you can start online investing in mutual funds, now this time, "groww app" is the best online platform to start your investing in mutual funds. And Also it is more trustable online platform. Good UI and UX design.
11) How to verify and check my SIP amount investing as I chosen the Nifty 50 direct growth plan or not?
Once you started your investment in SIP mutual funds schemes, then you receive the pdf file mail by Bank or online platform which you are using for SIP, and you can check the all the details about your monthly SIP amount and deposite details and through folio number of the Monthly SIP.12) Somebody ask why do I pay monthly SIP, If I want to invest my 1 lakh rupees in Nifty 50 index fund, in a single time.Then what?
Good question, but to get the best and high returns, it depends on compounded annual growth rate, best to start your investing in mutual funds, at least your investment, it should be for 10 years, to start your monthly SIP best option to Start investing. Always remember if you invest your lumsum amount, then returns will not get high, but if you investing for long run for 10 years or 20 years then you can get best high returns upto 15% and more.13) How to know about Market overvalued or undervalued?
To check now market overvalued or undervalued, easy method to check this. P/E ratio dividend yield, beer ratio. Best and powerful method, Buffett indicator by Warren Buffett, to check, Market Cap and GDP ratio. Says by Experts About india 0.5 to 0.75 that means market undervalued, then you can invest your lumsum amount, and you can expect high returns as compare to normal returns. If 0.75 to 0.9 that means now market fairevalued it means you can get as much returns, in this time you can invest in one time, but you will get avarage returns. If more than 0.9 above, Red Flag it means market overvalued, this time never invest all money in a single time, to check Buffett indicator on "gurufocus.com" you can check on Market Cap and GDP Also.14) Is better to invest in SIP, when market in undervalued position?
Yes, this is the best strategy to invest in SIP when market in undervalued position, and then withdrawal your investment amount, when market in overvalued position, and withdrawal amount to invest in FD, some people following the same strategy, and if you investing in SIP for a long term investment at least 10 to 20 years, then maximum chances of High returns, after 10 to 20 years investment, you will get upto 12% to 15% returns easily. On an average, just because in 10 years investment journey, market always up and down accordingly, and finally market back to pick position.15) Can I start my SIP on one time Investment?
Yes, you can invest your money in SIP on one time Investment, and Also you can start SIP investment in multiple SIP.16) if I have invested in SIP, but my investment amount is going down? Then what I have to do?
Maximum people ask this question, in this volatility time, when market is going down, just because when market overvalued, maximum people sell of his market share, and when market going back to undervalued, then people start investing in SIP, and start buying new companies shares. But if you have patience to wait 10years or 20years investment, then you can see magic of SIP and power of compounding. After 10 years or 20 years investment in SIP, as perfoming in past time, you will get up to 15% returns, not the accurate, but approximately,17) if I start my investment of Rs.10,000 monthly in SIP, then how much will get the total amount, after investing 10 years or 20 years for a long term investment?
It depends, when you are withdrawal your investment amount, when market in undervalued or overvalued state, suppose you withdrawal your amount in overvalued state, then you will get upto 15% return, on an average. But if you're withdrawal your investment amount, when market in undervalued state, then you will get return upto 2% to 5% returns only.
Also you can use online SIP calculator to check, if you start your monthly investment of Rs.10,000 and how much you will get after 10 years investment in SIP.
Also you can use online SIP calculator to check, if you start your monthly investment of Rs.10,000 and how much you will get after 10 years investment in SIP.
18) if I achieved my goal early, then what should I do?
Suppose you started your investment of Rs.10,000 monthly, according to SIP calculator after investing 10 years, then your returns should be more than 1 crore rupees, you already achieved this estimated amount early, just because market already reached state of overvalued. then best option for you withdrawal your investment amount. And Also you can reinvest in FD, and live your life happily. Just because you already achieved your goal, why become more greedy.19) When I withdrawal my investment amount, then how much should I pay tax amount to government?
Before 2018, someone investing in equity fund for 1 year, then he will not pay any tax. But after 2018, union budget ammend, and started tax on. If you stop your SIP before completing 1 year, and withdrawal your investment amount, then you have to 15% tax on profit, and plus including cess and surcharge. But if you withdrawal your investment amount after completing 1 year, if amount more than 1 lakh rupees, then you have to pay tax, not on 1 lakh rupees, but you have to pay tax of which amount of more than 1 lakh rupees. and tax it will be 10% and including cess and surcharge.👉 20) SIP Calculator
👉 21) Compound Interest Calculator
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Conclusion
In this blog, you will get the all answers about mutual funds ( SIP ) and the power of compounding in long term Investment plan. Besed upon my research, and my own experience, about long term Investment in SIP, and how to works, If you start investing in early age of 18, for 10 years in mutual funds SIP, then when you will complete your age of 30, then Most of the chances you will become a millionaire, and you can retire early the age of 30. Start investing and become a successful people, mutual funds one of the best scheme for investment, and it's a very safe and secure investment plan for 10years or 20years investment for middle class family background,and also for high class family background people can start investing in ( SIP) mutual funds.
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The intelligent investor Book by Benjamin Graham
Highly recommended book by Warren Buffett for investing
Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
Book by John C. Bogle
Recommended the power of compounding Book
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3 Comments
I have read the article, it's a very informative post. But i am confused How to calculate in sip calculator total Invested in yearly? please explain this.
ReplyDeletei was visit a website about sip calculator but i face some confusion
ReplyDeleteI have read the article, This is a good website. But how to use this SIP calculator tool? please explain this.
ReplyDeleteIf you have any doubts, please comment, we are here for you.