How much should I invest to get 10000 monthly?
In India, you have two different options when it comes to investing in mutual fund schemes. Investment modes can be defined as the way you choose to invest in mutual funds. There are two options when it comes to mutual fund investments. The said options are lump-sum investments and systematic investment plans (SIPs). Under lump-sum investments, you are required to make a one-time payment for the purpose of mutual funds investment. The other investment mode is a systematic investment plan or SIP as it is referred to. Under SIPs, you can make monthly payments. Due to this feature, SIP is preferred by numerous investors. While a lot of people are aware of different investment modes in mutual fund schemes, a lot of them are not aware of how to withdraw from them. The way you can withdraw from your mutual fund scheme is through a monthly income plan.
What is a monthly income plan?
In accordance with the name, monthly income plans can be defined as schemes in which you can enjoy a certain sum of money every month. The money in these plans is generally accumulated after you have paid a premium for a few years. Furthermore, the name ‘monthly income plan’ is more of a mutual fund industry jargon. These plans are mostly referred to as monthly guaranteed income plans, monthly pension plans or assured monthly income plans in the life insurance industry. A monthly income plan (MIP) is a mutual fund investment that mainly allocates funds to debt and equity securities. It is done with the intention of getting cash flows and preserving capital.
These plans are known for falling under the hybrid mutual fund category, even though they are essentially debt oriented. This means that most of the portfolio is directed towards debt and money market instruments, making MIPs a moderate-risk scheme. With these schemes, you have the luxury of liquidity while simultaneously having a regular inflow of dividends. But it is important to note that MIPs are not something that is known for generating a steady and fixed monthly income as the name suggests. Like any other market-linked investment tool, dividends are paid based on the profits generated.
Who should sign up for MIPs?
MIPs are ideal for investors who are willing to expose themselves to equity markets but are willing to take high risks. Retirees, those about to retire, and homemakers fall under the category of homemakers according to the data from the depositories. Simply put, monthly income plans are ideal for investors who are looking to park their savings to enjoy a regular income. Moreover, first-time mutual fund investors can consider MIPs as the steppingstone to investing in the market.
What is the Earning Potential of MIP?
There are two ways to earn through MIP. They are:
|Dividends are paid by the AMC from the distributable surplus||There is no steady inflow of dividends in growth|
|They are paid only when the fund is enjoying profits||The profits are added to the NAV and then let the corpus grow|
What are some of the features of MIPs?
Listed below are some of the different features of MIPs:
- MIPs is known for delivering more returns than other schemes such as fixed deposits and POMIS schemes.
- You are not required to pay any processing charges or entry load.
- There is no limit on the investment for your MIPs.
- MIPs are also known for offering comparatively high liquidity.
- Also, there is no lock-in period for MIPs.
How much to invest to get 10000 monthly?
Consider this scenario, you are nearing retirement and you have determined that after retiring, you need ₹10,000 every month from MIP for taking care of your day-to-day expenditures. To enjoy 10,000 per month, you will need to invest at least ₹10,0000 for nearly 40 years.