Best SIP Plans to Reach 1 Crore for a 50k Salary?

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Many of us aspire to achieve financial freedom, which means having the ability to make life decisions without constant worry about financial consequences. If your finances control your life, goals, and dreams, it might be time for a change. Achieving financial freedom requires taking charge of your money. By Understanding the benefits of SIP and selecting the correct mutual funds will allow you to put your money to work for you and, you can surely achieve 1 crore with SIPs, no matter what your income level. In this blog, we will explore the power of systematic investment plans.

How Does SIP Work?

A Systematic Investment Plan (SIP) allows you to invest a fixed amount of money at regular intervals in a mutual fund. Instead of trying to time the market, you invest a small amount consistently, which can be monthly, quarterly, or yearly. Over time, these regular investments add up and can benefit from the power of compounding, where the returns you earn start generating their returns. This disciplined approach helps in averaging out the cost of investments and can lead to significant wealth accumulation in the long run.

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Your Real Salary Scenario

Let's consider a practical scenario where your monthly salary is ₹50,000. According to the 50-35-15 rule, you will allocate your income as follows:

First, 50% of your salary, which amounts to ₹25,000, will be used to cover essential needs such as rent, groceries, and utilities. These are the necessary expenses that are crucial for your day-to-day living and cannot be compromised.

Next, 35% of your salary, or ₹17,500, will be reserved for discretionary spending. This includes expenses for dining out, entertainment, hobbies, and other personal desires that enhance your quality of life but are not essential.

The remaining 15% of your salary, which is ₹7,500, will be invested in a Mutual Funds through a Systematic Investment Plan. By consistently investing this amount each month, you take advantage of the benefits of regular and disciplined investing. A Systematic plan allows you to buy units of a mutual fund scheme at different market levels, thereby averaging out the purchase cost of your investments over time.

Moreover, through the power of compounding, your investments can grow significantly. Compounding means that the returns you earn on your investments also start generating their returns. This process accelerates the growth of your investment over time, especially when the investment horizon is long.

Investment Plans of SIP for Better Understanding

1. 7500 Per Month @ 12%

   When investing 12% of your income, you will invest up to Rs. 7500 every month in an equity mutual fund with a rate of return of 12%. If you achieve a steady return over 20 years, you will accumulate Rs 1 crore in 276 months, which equates to 23 years.

   This is for the investor who doesn’t want to take any risk. If you want to reach your goal of accumulating Rs. 1 crore faster, you should consider a Step-up SIP. This type of SIP allows you to automatically increase your investment amount at regular intervals, enhancing your investment growth over time.

2. 7500 Per Month @ 15%

   If you start a Step-up SIP with a monthly investment of Rs.7500 at a 15% rate of return over 15 years, your total amount would accumulate to Rs.1,10,71,831. So, with a 15-year period, it is possible to achieve your desired crore. This investment strategy is suitable for investors who are comfortable with some volatility and are aiming for higher returns.

3. 7500 Per Month @18%

   If you start a Step-up SIP with a monthly investment of Rs. 7500 at an 18% rate of return over 13 years, your total amount would accumulate to Rs.1,01,89,694. By extending the investment period to 13 years, you can achieve your goal of reaching one crore. This strategy is suitable for investors who are comfortable with high volatility and are looking to achieve returns quickly.

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Best SIP Mutual Fund to Invest In

SIP Mutual Funds for 12% Returns

1. ICCI multi asset allocation

   A major strength of this fund is its flexibility in investing across different asset classes like equities, debt, gold, and commodities based on market conditions. The ICICI Prudential Multi Asset Fund is a popular investment option introduced on October 31, 2002. By May 31, 2024, it had grown to manage assets worth INR 41,160 crore. Over the past 10 years, it has provided an impressive SIP return of 17.77% and beat its benchmark index.

2. HDFC Multi Asset Allocation

   The HDFC Multi Asset Allocation Fund, launched on August 17, 2005, manages assets worth INR 2,897 crore. Over the past 10 years, it has delivered a SIP return of 12.89%. This fund invests in a mix of equities, debt, and other assets, offering a balanced approach to generate steady returns for investors.

3. TATA Multi Asset Allocation

   As of May 31, 2023, the TATA Multi Asset Allocation Fund, which was established on March 4, 2020, was managing Rs. 2,863 crores. It has outperformed its benchmark with an amazing SIP return of 22.38% over the last three years. This impressive record demonstrates how well the fund uses a dynamic asset allocation approach, which enables it to successfully navigate market circumstances and provide investors with outstanding returns.

SIP Mutual Funds for 15% Returns

1. Axis Flexi Cap Fund

   The Axis Flexi Cap Fund, launched on November 20, 2017, manages assets worth INR 12,012 crore as of May 31, 2024. It offers a 3-year SIP return of 22.65%. With its flexible, disciplined stock selection and diversification, this fund is an attractive option for investors seeking consistent long-term performance in the Indian Equitymarket.

2. Parag Parikh Flexi Cap Fund

   Launched on May 28, 2013, the Parag Parikh Flexi Cap Fund has a solid history of successful investment. It oversees assets worth an incredible INR 66,384 crore as of May 31, 2024. It has produced an impressive SIP return of 20.06% over the last ten years. This fund is a good option for investors looking for steady long-term development because of its rigorous approach and strategic flexibility, which are credited with its performance.

3. HDFC Flexi Cap Fund

   Since its launch to investors on January 1, 1995, the HDFC Flexi Cap Fund has grown to become a prominent player in the Indian equities market. The fund has an amazing asset under management (AUM) of INR 54,692 crore as of May 31, 2024. The HDFC Flexi Cap Fund has produced an impressive SIP return of 19.58% over the last year, demonstrating its ability to provide investors with steady returns.

SIP Mutual Funds for 18% Returns

1. Bandhan Small Cap Fund

   The Bandhan Small Cap Fund has proven itself to be a standout performer in the competitive small-cap equity space. launched on February 25, 2020, manages an impressive INR 5,166 crore in assets as of May 31, 2024. by delivering an impressive 3-year SIP return of 44.17%, outperforming its benchmark. This strong performance underscores the fund's effective strategy and potential for high returns in the small-cap segment.

2. Quant Small Cap Fund

   One of the most popular small cap investment choices is the Quant Small Cap Fund. Since its launch on January 1, 2013, the fund has continuously produced outstanding returns for investors. The impressive 29.69% 10-year SIP return of the Quant Small Cap Fund is one of its main selling points. The Quant Small Cap Fund has an amazing asset under management (AUM) of INR 21,243 crore as of May 31, 2024.

3. SBI Small Cap Fund

   One of the key highlights of the SBI Small Cap Fund is its impressive 10-year SIP return of 24.8%. this fund was introduced to the investor on September 9, 2009. The SBI Small Cap Fund has an impressive asset under management (AUM) of INR 28,375 crore as of May 31, 2024.

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Final Statement

In conclusion, achieving 1 crore through SIPs is not just a dream but a realistic goal that can be attained with disciplined investing and strategic fund selection. By understanding how SIPs work and leveraging the power of compounding, even individuals with a monthly salary of ₹50,000 can build substantial wealth over time. Whether you choose a conservative approach with lower risk and longer investment periods or opt for higher returns with potentially higher volatility, there are SIP options tailored to your financial goals. With the right mutual fund and a consistent investment strategy, you can pave the way toward financial independence and achieve your desired milestones. Start your SIP journey today and watch your investments grow towards your 1 crore goal.