Gold vs SIP:
When it comes to wealth creation, many people look for ways to invest small amounts regularly and build substantial savings over time. A common question is: Can you accumulate significant wealth by investing just ₹5,000 a month for 15 years? The answer is yes! With disciplined investing, you can potentially reach ₹20-25 lakh by the end of 15 years. But the real question is: where should you invest?
Two of the most popular investment options for long-term wealth creation are Gold and Systematic Investment Plans (SIP) in Mutual Funds. Both have their advantages and different styles of growth.
Gold Investment:
Gold is considered a safe asset. It works as a shield when markets crash or inflation rises. Historical data shows that gold yields approximately 10% annual returns. If you invest ₹5,000 per month for 15 years in gold (via physical gold, Gold ETFs, or Sovereign Gold Bonds), your total investment of ₹9 lakh could grow to around ₹20.89 lakh. The major advantage of gold is its stability—once you invest, you don’t have to worry much. However, gold doesn’t offer the power of compounding or dividends like mutual funds.
SIP in Mutual Funds:
On the other hand, SIPs in equity mutual funds can provide higher returns. With the power of compounding, SIPs can give around 12% or more annual returns. If you invest ₹5,000 monthly for 15 years, your ₹9 lakh investment could grow to ₹25.22 lakh. During market booms, equity SIPs can yield even higher returns, sometimes around 15%-18%. However, they are more volatile and sensitive to market fluctuations, especially in the short term.
Which One Is Better?
For long-term investments, SIPs generally outperform gold. While gold offers lower risk, SIPs provide higher returns, though with higher risk. Both are liquid assets, meaning you can easily convert them to cash when needed. Gold, however attracts a 20% capital gains tax if sold after 3 years, while SIPs only attract a 10% tax on long-term capital gains over ₹1 lakh.
If you prefer safety and low risk, go for gold. But if you’re looking for faster growth and are willing to take on a bit of risk, SIPs in mutual funds are the way to go. Experts suggest a balanced approach investing 80% in SIPs and 20% in gold for the best of both worlds.
Also Read:The Samsung Empire: Korea’s untouchable Dynasty
Share
Japan’s Population Is Dying: Now the Internet Wants ChatGPT to Fix It
Forgotten Human Skill: Power of Politeness Can Save the World
