Power of Compounding: How quickly can monthly SIP of Rs 7,000, Rs 10,000, and Rs 13,000 build a Rs 4 crore corpus?
Lets find out how quickly the investments of Rs 7,000, Rs 10,000, and Rs 13,000 can turn into Rs 4 crore corpus with the help of the power of compounding.
Building a Rs 4 crore corpus might seem like a distant dream, but with the power of compounding, it can become achievable through disciplined monthly Systematic Investment Plans (SIPs). By investing Rs 7,000, Rs 10,000, or Rs 13,000 every month, one can take advantage of compounding returns to grow your wealth in the long run. The secret is consistency and starting early. The longer your money stays invested, the more it grows. In this article, we will explore how these monthly SIP amounts can help you reach your Rs 4 crore target.
What is Compounding?
Compounding is the process where the returns earned on an investment generate additional growth in the long run. You can earn returns on both your initial principal amount and the profits previously earned. This growth is the answer to building a large corpus in the long run, as the more time your money has to grow, the more it multiplies.
Role of SIPs in compounding
Systematic Investment Plans (SIPS) make it easier for investors to take advantage of compounding. By contributing a fixed amount every month, you allow your money to grow steadily.
Time is your best companion
The longer your money stays invested, the more it can grow. Even small contributions can add up in the long run due to compounding.
Starting early makes a difference
The earlier you begin investing in SIPs, the more time your money has to grow. A small investment at the beginning of your career can result in a large corpus at retirement.
How monthly SIPs can build Rs 4 crore?
Let’s understand how monthly SIPs of Rs 7,000, Rs 10,000, and Rs 13,000 can help you reach a Rs 4 crore corpus. For this calculation, we will calculate at 12 per cent annualised return.
How soon can a monthly SIP of Rs 7,000 build Rs 4 crore?
It will take approximately 34 years to achieve the target of Rs 4 crore retirement corpus.
From Rs 7,000 monthly SIP to Rs 4 crore corpus at 12 per cent annualised return
The investment amount will be Rs 28,56,000, the estimated capital gains will be Rs 3,74,13,977 and the estimated retirement corpus will be Rs 4,02,69,977.
How soon can a monthly SIP of Rs 10,000 build Rs 4 crore?
It will take approximately 31 years to achieve the target of Rs 4 crore retirement corpus.
From Rs 10,000 monthly SIP to Rs 4 crore corpus
The investment amount will be Rs 37,20,000, the estimated capital gains will be Rs 3,61,84,045 and the estimated retirement corpus will be Rs 3,99,04,045.
How soon can a monthly SIP of Rs 13,000 build Rs 4 crore?
It will take approximately 29 years to achieve the target of Rs 4 crore retirement corpus.
From Rs 13,000 monthly SIP to Rs 4 crore corpus
The investment amount will be Rs 45,24,000, the estimated capital gains will be Rs 3,60,52,271 and the estimated retirement corpus will be Rs 4,05,76,271.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
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