20/12/2018 4:34 PM IST | Updated 21/12/2018 2:57 PM IST

Need more money? SIP in a mutual fund is the answer!

Greetings, fellow broke millennial. Chances are you found this article as a result of searching the internet for money. Well, the lightness of our bank accounts has brought us to this place of despair before, but this time, I’m going to arm you with information that can really turn the financial tide in your favor. It’s literally possible to invest a few thousand every month and walk away with lakhs of Rupees! No joke, read on.

How?

With mutual funds. Those things that are subject to market risks and for which you have to read the offer document carefully. Yeah, they work - and they can make you really rich. It isn’t complicated like your tie-wearing uncle would have you believe. Mutual funds are, in fact, really simple to understand and use to make yourself rich. You can know enough to start investing intelligently after just 30 minutes of reading.

Investing small amounts grows to a massive sum

There are two main ways to invest in mutual funds - lumpsum or SIP. Lumpsum is the easy way when you invest all your money in one shot. The other way is through SIP - Systematic Investment Plan - which means that you will invest a small amount at fixed intervals into a mutual fund scheme. There are a ton of benefits of investing through SIP.

“I have to pay rent and have too many monthly expenses to afford an SIP.”

Tell this to the case of beers or stack of pizza boxes you demolished over the weekend. And then remind yourself why you’re broke. I know it’s tough to hear - but in this day and age where resources are scarce and there are too many mouths to feed - every penny saved matters a great deal and could be the difference between winning or losing.

Break your routine, start a new cycle that makes you rich

Sacrifice a few weekends, and consciously redirect money towards investments in a mutual fund scheme that will actually get you rich. Rs.5,000 spent on a night out is absolutely gone, but the same Rs.5,000 if invested correctly can grow and multiply itself over time.

How will investing money make me rich?  

You have Rs.5,000 at the end of the month. What you do with it determines how rich or poor you’ll make yourself.

Spend it, and it’s gone. Investing it is like giving your future self a gift of money. Investing is a way of putting money in your own pocket in the future.

  1. The money you invest comes back to you - it isn’t “gone” like what happens after a blurry weekend - it’s stored in an account with your name on it.

  2. “Compounding” is the 8th wonder of the world - because the money you earn on the money you’ve invested is added back to your investment making it even huger! Used effectively and over a long enough period of time, the effect of compounding could buy you a new car.

  3. Discipline: is something we as a generation lack, and investing a fixed amount monthly without any compromise helps build financial discipline.

  4. Rupee cost averaging - literally means getting more bang for your buck. When the scheme performance drops, you get more mutual fund units, when the scheme performance rises, you get fewer units - over time these numbers average out in relation to the investment amount and works in your benefit.

It’s true you’ll have to wait a few years for the money to really become a massive whopping amount, but the wait is worth it since the Rs.5,000.Rs.2,000 or whatever you’re left with at the end of the money would have been wasted if not for being invested. Face it, it’s not an amount you’ll miss that much, and this way you’ll be putting a few lakhs in your pocket in the future.

Can’t be that easy, right?

It is. It literally is that easy, it’s just something you hadn’t seriously considered so far - and now you can create an account and invest online. All your documents can be submitted online, your investments can be tracked a live and intuitive screen either through your smartphone through the app or online on the website.

Check out our list of the Best SIP Plans of 2018:

Mutual fund scheme name

3 year returns

5 year returns

SBI BlueChip Fund-Reg(G)

9.68%

16.35%

Franklin India Equity Fund(G)

9.57%

17.16%

Mirae Asset India Equity Fund-Reg(G)

14.72%

19.6%

HDFC Mid-Cap Opportunities Fund(G)

12.32%

21.76%

ICICI Pru Bluechip Fund(G)

12.78%

15.32%