SIP Investment: How one can become a crorepati at 50 by investing just Rs 200 a day

Mutual fund investment through systematic investment plans (SIP) has gained popularity in the last few years as it lessens market risk, balancing out losses once the market recovers. Secondly, mutual funds invest their pool in a wide variety of stocks, which also reduces market risk even if some of those stocks fare poorly.

SIP investment has many other benefits. It develops investment discipline in an investor; one inculcates the habit of saving money every cycle; can be started with investing as little as Rs 100; is less vulnerable to market fluctuation than other forms of stock investment; provides compounding; and can be stopped at any time.
 
One may also diversify their investment portfolio by starting SIPs in mutual funds from different fund houses. If you hold your investment for many years, compounding may help your investment grow many times. In the last few years, SIPs have given 12 per cent average returns. 
 
In this article, we will discuss what a Rs 200 investment per day in an SIP can give you in 15, 20, and 25 years.

Invest Rs 200/day for 15 years

If you are 25 years old, you can start saving Rs 200 daily and invest it in mutual funds through an SIP. You can keep a long-term investment strategy of 15 years.

If you get a 12 per cent average return every year, according to the SIP calculator, your total investment in 15 years will be Rs 10,80,000 (Rs 10.8 lakh).
 
After 15 years, you may have capital gains of Rs 19,47,456 (Rs 19.50 lakh), while your total maturity amount is estimated to be Rs 30,27,456 (30.3 lakhs).
 
Invest Rs 200/day for 20 years

You are 25 years old and investing the same amount of Rs 200 daily in a mutual fund through SIP for 20 years; your total investment in 20 years will be Rs 14,40,000 (Rs 14.4 lakh).
 
After 20 years, you are estimated to have a maturity amount of Rs 59,94,888 (59.9 lakh) at an average annual return of 12 per cent. This means that your capital gains are estimated to be Rs 45,54,888 (Rs 45.5 lakh).
 
Invest Rs 200/day for 25 years

If you start investing Rs 200/day at the age of 25 for another 25 years, your maturity amount may easily make you a crorepati.
 
In 25 years, your total SIP investment will be Rs 18,00,000 (Rs 18 lakh). At a 12 per cent rate of return, while your capital gains are estimated to be Rs 95,85,811 (Rs 95.9 lakh), your maturity amount is likely to be Rs 1,13,85,811 (1.1 crore).

To put it another way, at 50, you can aspire to become a crorepati by investing Rs 200 every day for 25 years.