Nearly 2500 years ago, in Croton, Italy, there lived a man named Milo who was very strong. Milo’s incredible strength came from a simple but powerful way that he trained his muscles.
One day, a calf was born near where Milo lived. He made the decision to carry the calf on his shoulders. He did the same thing every day, and he did this for the next 4 years. The little calf grew up slowly into a 4-year-old bull, and Milo also got stronger as time went on. He won six wrestling titles at the Ancient Olympic Games in Greece, making him the best wrestler of his time. These basic rules of strength training that helped Milo do well also work well for investing and making money.
Start small and keep at it. Milo began his strength training by lifting a newborn calf, which was a small and manageable challenge. Every day, he always did this same thing. A systematic investment plan (SIP) in a mutual fund is the best way to make sure you always invest the same amount of money at the same time. With an annualized return of 12%, a SIP of just Rs 10,000 per month in an equity mutual fund can turn Rs 30 lakh into Rs 1.9 crore in 25 years.
Step-it-up: As the calf slowly turned into a bull, Milo had to lift a little more weight every day. Milo got stronger over time by lifting weights in a way that got progressively harder. It’s important that as income goes up, so do investments. Step-up SIP makes it possible to increase monthly investments at a set rate. Stepping up can be done either by a percentage or a lump sum. It will make sure that your investment grows by the amount or percentage you choose and at the time you choose. For example, if a monthly SIP of Rs 10,000 is increased by 10% every year for the next 25 years, the resulting corpus can grow to Rs.4 crore from a total of Rs.1.2 crore invested, assuming 12% annualized returns.
SIP is a simple way to invest that encourages disciplined, regular, and long-term savings to build wealth, just as small drops of water add up to a big ocean.