Power of Rs 15,000 SIP: Are you waiting for your income to reach a certain level before starting to invest? Your wait is not worth it! The best practice is to start it as soon as possible. Even if your investment amount is small, you may increase it over time as your income rises. An early start to investment helps an investor in the long term. Even if you stop investing, your investment grows. Because of the power of compounding, it may grow faster with time.
If you make a periodic investment for some years, stop it, and don’t redeem it, your corpus will keep growing.
Likewise, if you start a Rs 15,000 monthly step up SIP investment and do it for just 5 years, it may create an estimated Rs 2,26,00,000 corpus by your retirement! Know it may be possible. –
Investment grows even when you stop investing
Let’s compare two scenarios. In the first scenario, A starts a Rs 20,000 monthly SIP investment and stops it after 5 years, but they let the corpus grow for another 25 years.
In the second scenario, B starts a Rs 20,000 monthly SIP investment and continues it for 30 years. Let’s see the difference in the corpus they can create at a 12 per cent annualised return.
A’s total investment in 5 years will be Rs 12,00,000, estimated capital gains will be Rs 4,22,072, and the estimated corpus will be Rs 16,22,072.
Now if the investor is letting it grow for 25 years, estimated capital gains will be Rs 2,59,53,256, and the estimated corpus will be Rs 2,75,75,328.
B, on the other hand, will invest Rs 72,00,000; their estimated capital gains will be Rs 5,44,19,464, and the estimated corpus will be Rs 6,16,19,464.
B’s corpus, hands down, is more than two times that of A, but A’s investment is 1/6th of B’s, and the point here is that investment grows with time even if you stop it. So, the better thing is to start it without a delay.
Rs 2,26,00,000 corpus from Rs 15,000 step up SIP investment
In our calculations, we will show how our Rs 15,000 monthly step up SIP investment will grow in 5 years at a 12 per cent annualised return when our step up percentage is 5.
In the second phase, we will show how the corpus created in 5 years can grow to an estimated fund of Rs 2,26,00,000.
Corpus from Rs 15,000 step up SIP in 5 years
At a 5 per cent step up, the total SIP investment in 5 years will be Rs 9,94,614, estimated capital gains will be Rs 3,35,090, and the estimated corpus will be Rs 13,29,704.
Corpus in 25 years
If we get a 12 per cent growth on a Rs 13,29,704 investment for 25 years, estimated capital gains will be Rs 2,12,75,350, and the estimated corpus will be Rs 2,26,05,054.
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)
