Money's Masterstroke: This trick will make you give you 1 crore in 20 years... Inflation will not be able to affect your savings!

If you have 1 crore rupees 20 years from today, will it really be equal to 1 crore? The answer is - no. Inflation eats up your savings from within. In such a situation, it is important that you do not just dream of becoming a millionaire, but prepare to become a "real millionaire". The best way for this is - Step-up SIP Strategy. Let's understand it in the slide below.

Today's 1 crore rupees will not be as strong after 20 years. If we assume an annual inflation rate of 6%, then after 20 years the value of your 1 crore will decrease to just 31 lakh rupees. That is, the amount which seems like a crore today, it will be difficult to buy a big car or a good house with it after 20 years.

To beat inflation, you need not just 1 crore but an amount equal to its future value. After 20 years, "today's 1 crore" will actually be equal to Rs 3.26 crore. That is, you will have to prepare this much amount for retirement or long term financial goals.

If you do a fixed SIP, say you invest Rs 17,500 every month for 20 years and get an average return of 12% on it, then you will be able to save only Rs 1,60,97,504 in 20 years. This amount is much less than your goal of becoming a "real crorepati".

Step-up SIP means increasing your SIP amount every year. Suppose you start with a SIP of Rs 17,500 and increase it by 10% every year. This increases both your investment power and returns rapidly.

Suppose you started SIP with ₹17,500, kept increasing the amount by 10% every year for 20 years, you got a return of 12% on this investment, then after 20 years your fund will be ₹3,26,04,921. That is, you have hit the target of becoming a real millionaire.

The specialty of Step-up SIP is that it matches your increasing income. As the salary increases, you keep increasing the SIP a little. By this, you create a big amount in the long term without putting much burden.

After 20 years, when inflation will eat up your savings, then you will get real strength from Step-up SIP. This strategy can easily fulfill big goals like your children's education, marriage or retirement.