SIP Returns: By saving Rs 50 a day and investing Rs 1,500 a month, how one can build over Rs 1 crore corpus

Rome was not built in a day, says the adage. But it was built brick-by-brick, layer by layer, and wall by wall. The journey of the magnificent historical city started with a small brick. But people ignore bricks and layers and see only the gigantic structure, impressive enough to daze their eyes and numb their senses. Investing is no different. People discuss investors who have built large corpuses over the years but ignore the fact that there is quite a possibility that the journey of the large corpus would have started with a small investment.

So, when we say that people can build a corpus of over Rs 1 crore by saving just Rs 50 a day and investing it in a scheme offering compound growth, it is nearly impossible to fathom that possibility.

But years of compounding can work wonders and help one accumulate wealth in large proportions with a small amount.  

How Rs 50 saving/day can help you build over Rs 1 crore corpus

In every investment journey, duration plays a key role, specially in schemes offering compound growth.

So, when you are dreaming of achieving the Rs 1 crore corpus with Rs 50 saving a day, it's better to start early.

If you save Rs 50 a day, or Rs 1,500 a month precisely, your saving in one year is Rs 18,000.

To make investing a habit, you may start a monthly SIP in a mutual fund scheme, where a pre-fixed amount is deducted from your account.

We assume your money to grow by 14 per cent (matching the performance of benchmark Nifty 50 in 20 years).

Now, if you start investing at 25 years of age, here's how you may build your Rs 1 crore corpus step by step.

In 10 years, your investment will be Rs 1,80,000, long-term capital gains will be Rs 2,13,137, and the expected amount will be Rs 3,93,137.

In 20 years, your investment will be Rs 3,60,000, long-term capital gains will be Rs 16,14,519, and the expected amount will be Rs 19,74,519.

In 30 years, your investment will be Rs 5,40,000, long-term capital gains will be Rs 77,95,583, and the expected amount will be Rs 83,35,583.

In 32 years, your investment will be Rs 5,76,000, long-term capital gains will be Rs 1,04,76,949, and the expected amount will be Rs 1,10,52,949.

What you can see here is that by investing Rs 1,80,000 in each of three decades, one can make Rs 2,13,137, Rs 14,01,382, and Rs 61,81,064. 

By investing Rs 36,000 more in the next two years, one can get Rs 26,81,366 extra. That's possible because of compounding.

Thirty-two years is quite a long time when it comes to investing. But that can be the advantage of starting early. Rs 1,500 a month is not a big amount, so, even if one starts at 25, by 57 years of age, they can have more than Rs 1 crore with an investment of just Rs 5,76,000.

(Disclaimer: This article is for knowledge purpose only. This is not investment advice. Do your own due diligence or consult an expert for financial planning.)