If you start financial planning for your child’s future as soon as he is born, then by the time he turns 18, you can easily accumulate a fund of crores and fulfill your responsibilities towards your child. However, for this, you will have to invest according to a formula.
SIP Investment Formula: Every parent starts worrying about the future of their child as soon as they are born. Nowadays, lakhs of rupees are spent on the child’s education and marriage. In the coming times, this expense will be even more. In such a situation, arranging so much money is a huge responsibility. However, if you do financial planning for the child’s future as soon as he is born, then you can fulfill this responsibility very easily and well.
Here know the method by which you can save not lakhs but crores of rupees for your child. If you start this work with the birth of the child, then by the age of 18 your child will become a millionaire. For this, you will have to invest in mutual funds with a formula. Let us tell you about this-
This formula will do wonders
This investment formula is 18x15x12. With this formula, you have to start investing in mutual funds as soon as the child is born. You can easily invest in mutual funds through SIP every month. According to the formula, 18 means year, that is, you have to start SIP with the birth of the child and continue it till he turns 18. 15 means SIP of Rs 15,000 and 12 means return. The average return of SIP is considered to be 12 percent.
How to add more than 1 crore fund
If you apply this formula and start a monthly SIP of Rs 15,000 in the name of your child as soon as he is born and continue it for 18 years, then you will invest a total of Rs 32,40,000 in 18 years. If we calculate the average return of SIP at 12%, then in 18 years, you will get Rs 82,41,589 as interest on this amount. In this way, after 18 years, you will get a total of Rs 1,14,81,589 by combining the invested amount and interest. In this way, when your child turns 18, he will be the owner of Rs 1,14,81,589. In such a situation, you can easily fulfill all his needs with this amount.
Benefits of SIP
The benefit of compounding is tremendous in SIP. The longer the SIP is for, the greater will be the benefit of compounding. Its average return is 12% which is not available in any other scheme. Sometimes the return is even higher than this. Apart from this, you get the benefit of rupee cost averaging. Due to this, your expenses remain average even in the event of fluctuations in the market. On the other hand, there is flexibility regarding the investment period and amount in investing through SIP. You can choose the option of monthly, quarterly or half-yearly investment period as per your convenience. Whenever you need, you can stop it and withdraw money from your SIP and increase the investment in SIP whenever you want.
