Power of Compounding: How quickly can monthly SIP of Rs 12,000, Rs 14,000, and Rs 16,000 build Rs 10 Crore corpus?
Let’s find out how long it will take to generate the target corpus of Rs 10 crore with a monthly systematic investment plan (SIP) of Rs 12,000, Rs 14,000 and Rs 14,000. We will understand it through calculations.
The power of compounding is a game-changer for building a sizeable corpus in the long run. For those who are aiming to create a corpus of Rs 10 crore, systematic investment plans (SIPs) can help them reach their target goal. If one invests monthly amounts of Rs 12,000, Rs 14,000, or Rs 16,000, they can gradually achieve their target corpus. Factors like the annualised return rate and investment duration play important roles in determining how quickly the goal is reached. In this article, we will explore how quickly different SIP amounts can help you achieve a Rs 10 crore retirement corpus.
What is power of compounding?
The power of compounding can work wonders in mutual fund SIP investment. It is a process to generate earnings not only on the original principal amount but also on the accrued growth.
What is systematic investment plan (SIP)?
A systematic investment plan (SIP) is a process of investing in a mutual fund with a fixed amount, either daily, weekly, monthly, or yearly.
SIP calculations
- Target corpus: Rs 10 crore
- Monthly investments: Rs 12,000, Rs 14,000, Rs 16,000
- Expected annualised return: 12 per cent
How long it will take to build Rs 10 crore retirement corpus with Rs 12,000 monthly investment?
It will take approximately 37 years to achieve the target of Rs 10 crore retirement corpus.
From Rs 12,000 monthly SIP to Rs 10 crore corpus at 12 per cent annualised return
The investment amount during that time will be Rs 53,28,000. The estimated capital gains will be Rs 9,39,66,137 and the estimated retirement corpus will be Rs 9,92,94,137.
How long it will take to build Rs 10 crore retirement corpus with Rs 14,000 monthly investment?
It will take approximately 36 years to achieve the target of Rs 10 crore retirement corpus.
From Rs 14,000 monthly SIP to Rs 10 crore retirement corpus
The investment amount during that time will be Rs 60,48,000. The estimated capital gains will be Rs 9,65,97,775 and the estimated retirement corpus will be Rs 10,26,45,775.
How long it will take to build Rs 10 crore retirement corpus with Rs 16,000 monthly investment?
It will take approximately 35 years to achieve the target of Rs 10 crore retirement corpus.
From Rs 16,000 monthly SIP to Rs 10 crore retirement corpus
The investment amount will be Rs 67,20,000. The estimated capital gains will be Rs 9,72,04,305 and the estimated retirement corpus will be Rs 10,39,24,305.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
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