As you invest every month for years, look for a healthy rate of return

Most people want to be a crorepati because they want to spend like a crorepati. But, if you did so, you would never become a crorepati in the first place. The first principle of becoming wealthy is to have patience to see your money grow. Most wealthy people around you accumulated the wealth over a long period of time. There would always be a small percentage of people who became wealthy overnight, but they are the exceptions.

It is the drops that make an ocean.This adage holds good for creating wealth too. Small investments done periodically over a long period of time accumulate to become a large sum of money. What you then need is a healthy rate at which your periodic investments are compounding.

SIPs in equity funds provide you both, the discipline to invest regularly and a healthy rate of growth. In India, in the last 20 years, the sensex has generated a return of more than 15%. If one invested even Rs 5,000 per month for 25 years, at 12% average annual rate, it would grow to around Rs 1 crore. However, if the return was 15%, the corpus would be 1.5 times more.

You can follow a few more techniques.

Always remain invest ed in equity funds. Do not time the markets.

Increase the SIP amount annually.

Monitor the health of the funds vis-à-vis the index. Do separate SIPs for each goal. Pick up 4-5 funds so that your portfolio has enough diversification.