How to become rich formula by 30 rupees investment in Software companies ETF

Investment is very simple and it is portrayed as complex product such as stocks, mutual funds, insurance, ETF, term insurance and many others. To most of the us, the simple financial life works. It is simple and easy on “How to become rich formula”. The simple financial life is,all you need to have is:

1 Nifty Index funds/ETF and 1 balanced funds
1 term plan
1 health insurance
1 credit card
1-2 bank accounts

Once you started above 5, you can start investing in your surplus money in

1 small-cap/mid-cap mutual fund/ETF and
1 sectoral mutual fund/ETF.

An exchange-traded fund (ETF) is the basket of stocks that tracks an underlying index and can be traded on an stock market. ETFs can invest in different industry sector. It can contain a different type of investments like stocks, commodities, bonds or the mixture of these investment types. There is an set of Information Technology(IT) ETF to invest in software companies and software companies in India.

30 rupees, you can start investment in 10 software companies

The investment objective of the IT ETF is to provide returns by Nifty Information Technology TRI. This IT ETF invests in 10 top software companies in India. The list of companies are,

Infosys Ltd.
Tata Consultancy Services Ltd.
HCL Technologies Limited
Tech Mahindra Ltd.
Wipro Ltd.
LTIMindtree
Persistent Systems Ltd.
Mphasis Ltd.
Coforge Ltd.
L&T Technology Services Ltd.

List of Nifty IT ETF in India:

Nippon India ETF Nifty IT – It trades between 30 to 35 rupees
Kotak Nifty IT ETF – It trades between 30 to 35 rupees
Aditya Birla SunLife Nifty IT ETF – It trades between 28 to 33 rupees
ICICI Prudential Nifty IT ETF – It trades between 28 to 33 rupees

How to invest in ETF:

Investing in ETFs requires an investor to have a demat and a trading account with a registered stock broker. A Discount brokerage account is an account which offers only limited essential services and offers these services at a very low cost. On the other hand, a full service brokerage is a brokerage account which offers many ancillary services but charges higher fees for these services.The full-service brokerage does not charge separately for these ancillary services but increases the annual maintenance and brokerage charges. You can select the discount brokers Zerodha, Groww, Upstox, 5Paisa or PayTM Money and start investing in ETF in the beginning.

Mutual funds does not require demat account to invest. A primary difference between index funds and ETFs is that the former are mutual fund schemes which do not require investors to have a demat or trading account. However, to invest in ETFs a demat and share trading account is essential. ETFs are also cheaper than index funds. The expense ratio in index funds is also slightly higher than ETFs.

Will 30 rupees in a day make you rich?

Compounding is basically a long-term investment strategy. The process requires two things to work, – reinvestment of earnings and time. When you decide to reinvest the interest earned on an investment, your returns themselves start earning. Thus, you are effectively converting your investments into an income-generating resource where your money is working for you to generate wealth. The “power of compounding”, has the ability to generate enormous returns, if invested in the right assets.

Let me make it simple with an example of two persons, one of them starts investing an amount of INR 1,000 at the age of 25, but the other begins at 35. Assuming a rate of return of 12% compounded annually for both of them, by the time they are 50, the former would have accumulated an amount of INR 17.9 lakhs while the latter would have accumulated only INR 5 lakhs! Therefore, the sooner you start investing, the more time you will have to reap the benefits of compounding.

30 rupees a day for 40 years, you will have INR 3,00,00,000.00(3 crores)

Let me make it simple , you start investing an amount of RS 30/day at the age of 25 and assuming a rate of return of 15% compounded by investing in Nifty IT index fund/ETF. By the time they are 65, you would have accumulated an amount of INR 3,00,00,000.00(3 crores).

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