Cost of Investment Delay Calculator: Monthly SIP investment Rs 15,000; know how 5-year delay can decrease your corpus from Rs 5.30 cr to Rs 2.84 cr
Cost of Investment Delay Calculator: Starting to invest early gives a significant edge to a person. The earlier they start, the smaller their monthly investment is likely to be to achieve the retirement corpus goal.
Cost of Investment Delay Calculator: Should you start investing now, tomorrow, or later? Tomorrow never comes, and later doesn't have a fixed date. In the realm of investment, time is the king. It's not about the right investment at the right time and in the right scheme. It's about starting early and investing for a long period. In schemes, where investors get compound interest or returns, early investment plays a key role. The delay of a couple of years can affect the retirement corpus by crores compared to a person who begins early. In this write-up, through various examples, we will explain the importance of starting investing early. Also, know how a 5-year investment delay for a person with a Rs 15,000 monthly SIP investment can affect their retirement corpus by Rs 2.46 crore.
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(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for retirement planning.)
Importance of investment duration
Compounding returns can increase the retirement corpus significantly with a small monthly investment. Even if one starts with a Rs 3,000 monthly investment, they can generate a corpus worth crores in the long run.
Examples of early investment benefit
Let's begin with a Rs 3,000 monthly SIP investment and see what will be corpus in 10 years, 20 years, and 30 years if the annualised rate of return is 12 per cent.
In 10 years, the investment will be Rs 3,60,000, estimated capital gains will be Rs 3,37,017, and the estimated corpus will be Rs 6,97,017.
Examples of early investment benefit
In 20 years, the investment will be Rs 7,20,000, estimated capital gains will be Rs 22,77,444, and the estimated corpus will be Rs 29,97,444.
Examples of early investment benefit
In 30 years, the investment will be Rs 10,80,000, estimated capital gains will be Rs 95,09,741, and the estimated corpus will be Rs 1,05,89,741.
Here, you see that the investment in each decade is Rs 3,60,000, but the estimated return swells as with duration.
Another example for retirement corpus
Here, we take the example of a Rs 3 crore retirement corpus and see what will be the monthly and total investment if one wants to achieve it in 15, 20, and 25 years at 12 per cent annualised growth.
To achieve it in 25 years, the estimated monthly SIP investment will be Rs 15,810, the total investment will be Rs 47,43,000, estimated capital gains will be Rs 2,52,58,611, and the estimated retirement corpus will be Rs 3,00,01,611.
Another example for retirement corpus
If one wants to achieve this target in 20 years, their monthly SIP investment will be Rs 30,030, their total investment will be Rs 72,07,200, estimated capital gains will be Rs 2,27,97,212, and the estimated retirement corpus will be Rs 3,00,04,412.
Another example for retirement corpus
To achieve it in 15 years, the estimated monthly SIP investment will be Rs 59,460, the estimated total investment will be Rs 1,07,02,800, estimated capital gains will be Rs 1,92,99,289, and the estimated total value will be Rs 3,00,02,089
Another example for retirement corpus
What is evident here is that to achieve the same retirement corpus target, one needs to invest Rs 24,64,200 and Rs 59,59,800 more in 20 and 15 years, respectively, compared to the amount needed in 25 years. It happens because of the power of compounding.
SIP investment conditions
For the subject of our story, we will take the monthly SIP investment of Rs 15,000. Investment durations will be 25 years and 30 years, respectively, and annualised growth on this investment will be 12 per cent.
Retirement corpus in 25 years
In 25 years, the total investment will be Rs 45,00,000, estimated returns will be Rs 2,39,64,526, and the estimated retirement corpus will be Rs 2,84,64,526.
Retirement corpus in 30 years
In 30 years, the total investment will be Rs 54,00,000, estimated returns will be Rs 4,75,48,707, and the estimated retirement corpus will be Rs 5,29,48,707.
How much extra corpus will be generated?
The estimated extra retirement corpus thus generated will be Rs 2,44,84,181, while the estimated amount to generate it will be just Rs 9,00,000.