Systematic Investment Plan (SIP): Investment Plans and returns – Salary Rs 30,000


If you believe the advisor, you have to invest in mutual funds for 30 years. If you get an estimated return of 15% then the path to becoming a millionaire becomes easy. The biggest benefit is compounding. Meaning, you will get the benefit of compound interest along with 15% in 30 years. What is even more important is the most accurate formula, which will add value to SIP. This formula is of Step Up SIP. All you have to do is maintain a step-up rate of 10% every year.

10% step-up will make Rs 4.50 Crore

You are 30 years old. Saved Rs 100 daily and invested in SIP. Long term strategy aimed for 30 years. Keep doing 10% step-up every year. If you started with Rs 3000, you will have to increase it by Rs 300 next year. After 30 years you will have a maturity amount of Rs 4,50,66,809. According to SIP calculator, your total investment in 30 years will be Rs 59,21,785. But, here the profit from returns alone will be Rs 3 crore 91 lakh 45 thousand 025. This is the magic of returns in SIP. In this way, with the help of the most accurate formula step-up, you will have a huge fund of Rs 4 crore 50 lakh.

SIP Formula: How to become a millionaire with a salary of only Rs 30 thousand?

If you are employed then the salary comes in your salary account. By using this formula you can achieve your target. This applies not only to employed people but also to those doing business. You can accumulate a huge fund by applying it on your monthly income.

In today’s era, inflation is continuously increasing. Due to this, people’s savings are decreasing. The reason for this is that due to increase in the prices of goods, people have to spend more money from their pockets. The biggest impact is visible on middle class families. In such a situation, how to raise big funds? What are the solutions to become a millionaire with a low salary? If such questions are arising in your mind too, then an amazing formula can be useful for you! This formula is 50:30:20. Let us understand about it in detail.

What is the meaning of this formula?

You might be wondering what the meaning of 50:30:20 is? In simple words, this is a formula to divide your income into three parts. All you have to do in this is if you have a job. Salary comes to your salary account. Using this formula, divide it into three parts. Business people can also do this. You can collect a huge fund by applying it on your monthly income.

For example, try applying this formula on a job with a monthly salary of Rs 30,000. 100% of the salary will have to be divided in this manner. 50%+30%+20%= 100%. That means divide your salary into three parts. If we look at it accordingly, your salary will be divided into three parts (15000+9000+6000).

Use the first part here

You should spend 50 percent of your salary on your most important tasks. This includes food, drink, shelter and education. According to your monthly essential expenses, you can also transfer half of it to another account. So that only these needs can be met in the first part of Rs 15,000.

Don’t kill desires, use the other part

Along with your essential expenses, you can also fulfill your hobbies like going out, watching movies, eating out, gadgets and so on. However, it is very important to limit them according to income. You can fulfill all these needs with 30 percent of your salary. According to the rules, it would be advisable to spend a maximum of Rs 9,000 on these things.

The millionaire will make the last part!

The small but most important part is the third one i.e. 20 percent. On a salary of Rs 30,000, this part becomes Rs 6,000. You need to save this small part first. After this this amount will have to be invested at the right place. The best option for investing this money would be SIP and bonds every month in mutual funds. According to the 50:30:20 formula, by saving this much money every month, you will save Rs 72,000 annually. By investing in SI, your savings will increase year after year and along with this, compound interest will be added on the interest earned on it and it will become a big fund.

This is the complete calculation

You do SIP of Rs 6,000 in mutual fund every month. If you increase the investment by 20 percent every year with increasing income, then after 20 years you will get a total of Rs 2,17,45,302 on that investment at the rate of 12 percent annually. Whereas if the interest is given at the rate of 15 percent then the total amount will be Rs 3,42,68,292. It means clearly that it is not difficult to become a millionaire by working on this formula for 20 years.

Note: Before investing in mutual funds, take the help of a financial advisor.

FAQ on Investing with SIP and the 50:30:20 Formula

What is a Systematic Investment Plan (SIP)?

A Systematic Investment Plan (SIP) is a method of investing a fixed sum regularly in mutual funds. It allows investors to buy units of a particular mutual fund scheme on a chosen date each month, enabling them to take part in the stock market without trying to time it.

How does the Step-Up SIP work?

A Step-Up SIP involves increasing your SIP investment amount by a fixed percentage every year. For example, if you start with a monthly SIP of Rs 3,000 and step it up by 10% annually, your next year’s monthly investment will be Rs 3,300, and so on. This method leverages the power of compounding, significantly increasing your wealth over the long term.

What is the 50:30:20 formula?

The 50:30:20 formula is a budgeting rule that suggests dividing your after-tax income into three categories: 50% for needs, 30% for wants, and 20% for savings or paying off debt. This formula is designed to provide a simple framework for managing your finances effectively, ensuring you can meet your basic needs, enjoy life, and still save for the future.

How can the 50:30:20 formula help me become a millionaire?

By dedicating 20% of your income to savings and wisely investing that in avenues like SIPs, you harness the power of compound interest over time. This disciplined approach to saving and investing can grow your wealth significantly, making it possible to accumulate a substantial fund, potentially reaching millionaire status, depending on your investment choices and market performance.

Is it possible to become a millionaire with a low salary?

Yes, becoming a millionaire with a low salary is possible through disciplined saving and investing. By following the 50:30:20 formula and consistently investing in SIPs with a step-up approach, even small amounts can grow significantly over time due to the power of compound interest.

How much should I increase my SIP investment annually?

Increasing your SIP investment by 10% annually is a recommended strategy. This aligns with average salary growth rates and helps you invest more as your earning capacity increases, significantly boosting your investment’s growth potential over time.

What are the risks of investing in SIPs?

Like any investment in the stock market, SIPs come with their risks, including market volatility and potential loss of capital. However, SIPs help mitigate some of these risks through dollar-cost averaging, as you invest regularly regardless of market conditions, potentially lowering the average cost of your investment over time.

Should I consult a financial advisor before investing?

Yes, consulting a financial advisor is always a good idea before making any investment decisions. A financial advisor can help you understand your financial goals, risk tolerance, and the best investment strategies tailored to your individual needs and circumstances.

Can I follow the 50:30:20 formula if I’m self-employed or have a variable income?

Yes, the 50:30:20 formula can still apply if you’re self-employed or have a variable income. It may require more effort to categorize your spending and savings due to income fluctuations, but it can help you maintain a balance between living expenses, personal desires, and financial growth.