Building a massive corpus with an average monthly investment amount is hard to believe but with consistency and disciplined investment, you can make it happen. Another important 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 quickly you can generate the target corpus of Rs 1 crore with just Rs 10,000 monthly investment.
What is a Systematic Investment Plan (SIP)?
SIP is an investment scheme where investors can invest a fixed amount in mutual fund(s). They can invest daily, weekly, monthly, quarterly, or yearly, depending on their choice.
Why choose SIP?
SIP is beginner-friendly, by investing even a small amount 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 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
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 per cent 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 per cent annual return): Rs 28,00,000
By starting 10 years earlier, Investor A earns Rs 22,00,000 more, showcasing the power of compounding.
SIP calculations
- Target corpus: Rs 1 crore
- Monthly investment: Rs 10,000
- Annualised return: 12 per cent
How long will it take to build Rs 1 crore corpus with Rs 10,000 monthly SIP?
It will take approximately 21 years to generate Rs 10 crore.
How much can Rs 10,000 monthly SIP build in 10 years?
The investment amount will be Rs 12,00,000, the capital gains will be Rs 10,40,359, and the estimated retirement corpus will be Rs 22,40,359.
How much can Rs 10,000 monthly SIP build in 20 years?
The investment amount will be Rs 24,00,000, the capital gains will be Rs 67,98,574, and the estimated retirement corpus will be Rs 91,98,574.
How much can Rs 10,000 monthly SIP build in 21 years?
The investment amount will be Rs 25,20,000, the capital gains will be Rs 79,10,067, and the estimated retirement corpus will be Rs 1,04,30,067.
DISCLAIMER: Investments carry risk; seek professional guidance
