Are you a beginner in the world of investment who is confused about your investment amount, wondering whether you should start investing with a large amount or a small one? Here’s what you need to know. The investment amount completely depends on the investor’s choice, but if you are doubting whether a small investment would be helpful or not, then you must know that even a small amount can make a big difference. Let’s understand this in a better way and a defined way with the help of calculations. Let’s find out how small investments of Rs 2,000 to 6,000 can help you generate a huge corpus of Rs 60 lakh. We will also find out how quickly you can build it.
Understanding compounding?
With the help of compounding, one can generate returns not only on the principal investment amount but also on the accumulated returns. It helps to grow your wealth in the long run. The secret to benefiting from compounding is to start early and stay consistent with your investment.
Understanding SIP?
A systematic investment plan(SIP) allows investors to invest a fixed amount in mutual funds. As an investor, you can either invest daily, weekly, monthly, quarterly, or yearly, depending on your choice. Plus, you can start your investment journey with a small amount of Rs 100.
How does SIP work?
A systematic investment plan allows investors to invest a fixed amount regularly. You can set up a SIP with a mutual fund company and instruct them to deduct a fixed amount from your bank account at regular intervals.
Benefits of SIP?
SIPs can help you build wealth in the long run through compounding and the power of regular investing.
They can make investing more manageable and less stressful by eliminating the need to time the market.
SIP calculation conditions
- Target corpus: Rs 60 lakh corpus
- Monthly investment: Rs 2,000, Rs 4,000, Rs 6,000
- Annualised return: 12 per cent
How long will it take to build Rs 60 lakh corpus with Rs 2,000 monthly SIP?
It will take approximately 30 years to generate Rs 60 lakh corpus.
How much can Rs 2,000 monthly SIP build in 30 years?
The investment amount will be Rs 7,20,000, the capital gains will be Rs 54,41,946, and the estimated retirement corpus will be Rs 61,61,946.
How long will it take to build Rs 60 lakh corpus with Rs 4,000 monthly SIP?
It will take approximately 24 years to generate Rs 60 lakh corpus.
How much can Rs 4,000 monthly SIP build in 24 years?
The investment amount will be Rs 11,52,000, the capital gains will be Rs 48,81,715, and the estimated retirement corpus will be Rs 60,33,715.
How long will it take to build Rs 60 lakh corpus with Rs 6,000 monthly SIP?
It will take approximately 21 years to generate Rs 60 lakh corpus.
How much can Rs 6,000 monthly SIP build in 21 years?
The investment amount will be Rs 15,12,000, the capital gains will be Rs 47,46,040, and the estimated retirement corpus will be Rs 62,58,040.
(Disclaimer: Our calculations are projections and not investment advice. Do you own due diligence or consult an expert for financial planning)
