Monday, 1 November 2010

Make your children crorepatis through Systematic Investment Plans

Yesterday I got a Booklet from Bajaj Capital and the headlines attracted me. It states that make your children crorepatis (Those who have a wealth equal to 10 Million). It states that invest Rs. 3000 per month through SIP (Systematic Investment Plan) you can earn Rupees One Crore (10 Million) after some years. The Booklet did not tell much about it. So I have gone through the internet and got a clear idea that how this is possible.

The web site of Bajaj Capital shows that, if you invest Rs. 3000 per month in various Mutual fund schemes you can attain the goal of Rs. 1 core in 23 years and 8 moths. If you start investing when your child is in zero age you can give him/her Rupees 1 crore when he is at 23 years and 8 months. They have given a chart also to show the calculation. It shows that at the period of 23.8 months the total investment reaches Rs. 10075945. But one condition is that the investment should grow at an average rate of 18% per annum.

I have also calculated the amount and it gives a result almost same as the calculation of Bajaj Capital.

But how do we get this yearly average rate of 18% growth. They state that with Systematic Investment Plans (SIP) in top ranked Equity Mutual Funds growth scheme, one can attain this goal. They also state that through Mutual Funds promoted by State Bank of India, Life Insurance Corporation of India, Prudential ICICI, HDFC, Tata, Reliance, Franklin Templeton, Fidelity etc., can get this goal. And that this is the power of compounding and benefit of long term equity investment. The Bajaj Capital may advise and manage us to get this goal if we invest through them.

But an investor must note that it is not necessary to get this 18% average growth and these mutual funds also have market risk. So only we can say that if other things are remaining the same as stated one can attain this goal. Even though we could not attain this goal in this stipulated time one thing we can sure that we may get a good return from mutual fund if we invest in Systematic Investment plan (SIP), because we can purchase mutual funds in high rate when the market is high and low rate when the market is low. So we can maintain an average growth. If any experienced personals are helping us we can get this much or more.

Bajaj Capital also says that mutual funds have market risk and the past performance of any mutual fund does not guarantee the future performance etc. For more details visit their website. So many other investment services also offer almost same announcemetns.

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  3. krithikajayaprakash1 March 2011 at 05:23


    i have various lic in my name and my spouse name since 1996.
    i need to convert the above policies to systematic investment plan
    this is due to the wrong data occured for all the policies.
    how to proceed further for the above

    lic policies are

    716192616 715787000 717261720 716962465 716411087 717502820 717612890
    716669054 716200301 7157818281 716962472 715781831 717261948 717502821
    717612889 716669580 717264146

    please send a mail related to the above for any conversion plan in any investment
    to come to a conclusion
    with regards

  4. Yes you have so many LIC policies. I am not sure that these policies are ULIP or normal policy and also about the maturity period of the policies. IF your ULIP policies are not benefitial you can close those policies and can invest in other savings scehemes. Other LIC policies you take decission according to the term of the policies. It is not advisible ot surrender policies. So take a wise decision yourself.