Mutual funds are best for wealth creation. Compounding is when you earn interest on your investment over a period of time, due to which you witness a growth on your earnings. Power of compounding enables your earnings to grow as your investments grow. Let us discuss how to create wealth using power of compounding and create one crore by investing.
“Compound interest is the 8th wonder of the world. He who understands it earns it and he who doesn’t pays it.” – Albert Einstein
If you do systematic investment plan SIP of Rs 15000 per month in a mutual fund for 15 years which earns average 15% compounded annual returns, then You are able to accumulate Rs 1 Crore.
15 thousands * 15 years * 15% return = 1 crore
If you do a Rs 15,000 SIP per month for 30 years (instead of 15 years as earlier), at a 15% compounded annual return, You will be able to accumulate Rs 10 crores against 1 crore if you invest for 15 years. Means Rs 15000 * 360 Months = Rs 54,00,000 54 lakhs and you get a Whopping of Rs 10 Crores at the end of 30 Years.
15 thousands * 30 years * 15% return = 10 crores
Equity related mutual funds gives 15% in long term. Let us discuss list of mutual funds to invest for longer term to become crorepati. Select one large fund, one mid cap and one small cap or sector fund. Invest 5,000 in each of the fund. 3 * 5,000 = 15,000.
Select one mutual funds from large cap, mid cap and small cap for longer term
Large Funds:
Mirae Asset Emerging Bluechip Growth Direct Plan
Invesco India Opportunities Growth Direct Plan
Kotak Equity Opportunities Growth Direct Plan
DSP Equity Opportunities Growth Direct Plan
Principal Emerging Bluechip Growth Direct Plan
Aditya Birla Sun Life Equity Advantage Growth Direct Plan
Mirae Asset Large Cap Growth Direct Plan
ICICI Prudential Bluechip Growth Direct Plan
SBI Blue Chip Growth Direct Plan
IDBI India Top 100 Equity Growth Direct Plan
Aditya Birla Sun Life Frontline Equity Growth Direct Plan
Mid Cap Funds:
L&T Midcap Growth Direct Plan
HDFC Mid Cap Opportunities Growth Direct Plan
SBI Magnum Midcap Growth Direct Plan
Kotak Standard Multicap Growth Direct Plan
SBI Magnum Multicap Growth Direct Plan
Motilal Oswal Multicap 35 Growth Direct Plan
Aditya Birla Sun Life Equity Growth Direct Plan
Small cap funds:
SBI Small Cap Growth Direct Plan
DSP Small Cap Growth Direct Plan
L&T Emerging Businesses Growth Direct Plan
HDFC Small Cap Growth Direct Plan
Sector mutual funds:
ICICI Prudential Banking & Financial Services Growth Direct Plan
Aditya Birla Sun Life India Gennext Growth Direct Plan
Invest 15,000 rupees for longer term such as 15 years, 20 years, 25 years and 30 years. It would make you rich and simple way to create wealth. Happy investing:)
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