It may be hard to believe that a small investment can grow into a big amount, but with regular and disciplined investing, it is possible. The key is to start early because the more time your money gets, the more it can grow. Let’s see how you can reach your target of Rs 5 crore by investing just Rs 7,000 per month.
What is SIP?
A Systematic Investment Plan (SIP) is a way to invest in mutual funds regularly. Depending on your preference, you can invest a fixed amount daily, weekly, monthly, quarterly, or yearly.
Why Choose SIP?
SIP is great for beginners. You can start investing with as little as Rs 100 regularly, making it easy for first-time investors to grow their money over time. It’s also convenient since the amount is deducted automatically, you don’t have to worry about missing an 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
Rahul starts investing Rs 1,000 per month at age 20.
After 40 years, he gets an estimated Rs 1.18 crore.
His friend, Rohan, starts investing Rs 1,000 per month at age 30.
After 30 years, he gets Rs 35 lakh.
Rahul started 10 years earlier and got 3 times more returns.
SIP calculations
- Target corpus: Rs 5 crore
- Monthly investment: Rs 7,000
- Annualised return: 12 per cent
How long it will take to build Rs 5 crore with Rs 7,000 monthly SIP
It will take approximately 38 years to generate Rs 5 crore.
How much can Rs 7,000 monthly SIP build in 10 years?
The investment amount will be Rs 8,40,000, the capital gains will be Rs 7,28,251, and the estimated retirement corpus will be Rs 15,68,251.
How much can Rs 7,000 monthly SIP build in 20 years?
The investment amount will be Rs 16,80,000, the capital gains will be Rs 47,59,001, and the estimated retirement corpus will be Rs 64,39,001.
How much can Rs 7,000 monthly SIP build in 30 years?
The investment amount will be Rs 25,20,000, the capital gains will be Rs 1,90,46,812, and the estimated retirement corpus will be Rs 2,15,66,812.
How much can Rs 7,000 monthly SIP build in 38 years?
The investment amount will be Rs 31,92,000, the capital gains will be Rs 5,13,05,802, and the estimated retirement corpus will be Rs 5,44,97,802.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
