Building a sizeable corpus with a small amount is hard to believe but with consistency and disciplined investment, you can make it happen. Another key aspect of building such a massive corpus is early investment. If you start investing early, your investment gets enough time to grow in the long run. Let’s find out how can you generate this target corpus with just Rs 9,000 monthly investment.
What is SIP?
A systematic investment plan is an investment scheme where investors can invest a fixed amount in mutual funds. Investors can invest daily, weekly, monthly, quarterly, or yearly, depending on their choice.
Why choose SIP?
SIP is beginner-friendly, by investing even a small of Rs 100 regularly, first-time investors can start their journey toward building a sizeable corpus. It is also convenient, with automated deductions you don’t have to worry about missing out on investment.
Why should you start investing early?
To get maximum returns from investment in the long run one should start investing early. Let’s understand it through an example.
Start early
Investor A: Starts investing Rs 5,000/month at age 25 and continues till age 45 (20 years).
Total Investment: Rs 12,00,000
Maturity Amount (at 12% annual return): Rs 50,00,000
Investor B: Starts investing Rs 5,000/month at age 35 and continues till age 55 (20 years).
Total Investment: Rs 12,00,000
Maturity Amount (at 12% annual return): Rs 28,00,000
By starting 10 years earlier, Investor A earns ₹22,00,000 more, showcasing the power of compounding.
SIP calculations
Target corpus: Rs 21 crore
Monthly investment: Rs 18,000
Annualised return: 12 per cent
How long it will take to build Rs 10 crore with Rs 9,000 monthly SIP
It will take approximately 40 years to generate Rs 10 crore.
How much can Rs 9,000 monthly SIP build in 10 years?
The investment amount will be Rs 10,80,000, the capital gains will be Rs 10,11,052, and the estimated retirement corpus will be Rs 20,91,052.
How much can Rs 9,000 monthly SIP build in 20 years?
The investment amount will be Rs 21,60,000, the capital gains will be Rs 68,32,331, and the estimated retirement corpus will be Rs 89,92,331.
How much can Rs 9,000 monthly SIP build in 30 years?
The investment amount will be Rs 32,40,000, the capital gains will be Rs 2,85,29,224, and the estimated retirement corpus will be Rs 3,17,69,224.
How much can Rs 9,000 monthly SIP build in 40 years?
The investment amount will be Rs 43,20,000, the capital gains will be Rs 10,26,21,782, and the estimated retirement corpus will be Rs 10,69,41,782.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)