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Consistency always pays big dividends. Just like in life, the world of investing can be just as rewarding. When an investor invests in a mutual fund scheme for a fairly long period of time, returns are disproportionately higher in the later years compared to the first years.
This occurs because your investment grows over time and you earn a rate of return on that inflated sum. Everyone from investing novices like Warren Buffett and Ray Dalio to the great scientist Albert Scientist recognizes the power of compound interest.
high profit margin
To illustrate the powerful power of compound interest, we randomly selected one mutual fund scheme – Franklin India Focused Equity Fund – which was founded around 16 years ago in July 2007. , recently calculating a CAGR (Compound Annual Growth Rate) of 14.33% annually since its inception.
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And if a wise investor decides to invest INRIf 10,000 investments were made regularly in this scheme during the past year, the investments would grow as follows: INR146,000,000 in investment only INR1.2 million.
| tenure | return (%) | INR10K SIP is | Investment amount (Rs) |
| 1 year | 36.55 | 1.46 million | 1.2 million |
| 3 years | September 20 | 496 million | 360,000 |
| 5 years | 19.73 | 10.26 million | 600,000 |
| 10 years | 19.27 | 36.47 million | 1.2 million |
| S Inception | 14.33 | 9.758 million | 2000000 |
(Source: Franklintempletonindia.com, calculated on personalfn.com)
Similarly, if someone continues to invest, INRIf you invest 10,000 continuously for 3 years through SIP (Scheduled Investment Plan), your investment will grow as follows: INR$4.96 billion from investment INR360,000.
After 5 years, this investment will grow to: INR$10.26 million in investment INR600,000.
Similarly, by making regular investments, INRInvestor accumulates $10,000 in 10 years via SIP INR36.47 million dollars through investment of INR1.2 million.
And similarly, if someone were persistent enough to invest; INRIt is considered that your investment has increased by $10,000 every month since the start of the scheme. INRTotal investment amount: 97.58 million INR2000000.
Note: This story is for informational purposes only. Please consult a SEBI registered investment advisor before taking any investment related decisions.
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