How To Make Your Child a Millionaire
Irrespective of their financial status, all parents want their child to be rich. If a similar question comes to your mind, then its complete answer can be found here.
Here an attempt is being made to tell that with how much investment and in how much time a child can become a millionaire.
Let’s See How This Can Happen
It is a good financial goal if the child wants to become a millionaire. This is because if someone starts investing in the name of the child, it will be for a very long time.
Here it is assumed that the investment is being started in the name of the child as soon as he is born and it is assumed that he will become a millionaire by the time the child is 25 years old.
That is, the investment is being made in the name of the child for 25 years.
Know Where to Invest
Not every person invests in stock market, mutual funds. In such a situation, efforts are being made to find out how much investment in all the three places including the bank and the post office will become Rs 1 crore in 25 years.
Plan and Make Investment in the Post Office
Post office is getting the best interest on PPF. At present, 7.1 percent interest is being given on PPF.
If this interest continues for 25 years, then the investment of Rs 1.50 lakh will increase to more than Rs 1 crore every year.
A maximum of Rs 1.5 lakh can be deposited in PPF in a year. Apart from this, income tax exemption can also be taken on the money deposited on it.
Understand How the Child Will Become a Millionaire From Bank FD or RD
A lot of money is deposited in FD and RD in the bank. These are the most popular ways to save money in the country.
Bank’s FD interest keeps on changing rapidly. In such a situation, if it is assumed that FD interest will continue to be available at 6% for 25 years. So in such a situation, if 23 lakh rupees are deposited in one go as soon as the child is born, then he will become a millionaire at the age of 25 years.
But depositing Rs 23 lakh at once is a huge amount, while the bank’s interest keeps on increasing and decreasing. In such a situation, this method is not of much use.
Understanding How a Child Will Become a Millionaire From Rd
If it is difficult to deposit 23 lakh rupees in the name of the child, then the child can also be made a millionaire through RD.
In such a situation, if it is assumed that an average interest of 5.5 percent will be available on RD for 25 years, then an investment of Rs 16,000 will have to be made every month.
By doing this the child will become a millionaire. If this sounds too daunting, one can have a look at mutual funds.
Mutual Funds Can Also Make Your Child a Millionaire
Generally higher returns can be found on investing in mutual funds. In the long run, this return can be found well above 12 per cent. A list of good mutual fund schemes will also be given here so that the returns can be estimated.
If a mutual fund scheme gives an average return of 12% every year for 25 years, then an investment of Rs 6.5 lakh will become Rs 1 crore.
On the other hand, if a mutual fund scheme gives a return of up to 15%, then an investment of Rs 3 lakh will become around Rs 1 crore in 25 years.
Understand the Best Return Giving Mutual Fund Schemes
- These are the small cap schemes which have given the best returns in 5 years.
- Average annual return of Quant Small Cap Mutual Fund in 5 years is 23.08%
- Average annual return of Axis Small Cap Mutual Fund in 5 years is 19.94%
- Average annual return of Nippon India Small Cap Mutual Fund in 5 years is 17.78%
- Average annual return of Kotak Small Cap Mutual Fund in 5 years is 17.52%
- Average annual return of Union Small Cap Mutual Fund in 5 years is 15.12%
