Magic of Rs 4,000 SIP: Is Rs 3 crore corpus possible with Rs 4,000 monthly investment? Understand calculations
Even a small amount can make a big difference. By investing just Rs 4,000 every month, one could build a retirement fund of Rs 3 crore. Let’s learn how starting early with a mutual fund systematic investment plan (SIP) can help you meet your financial goals.
When we’re young, retirement planning is usually the last thing on our minds. But as we get older, we understand the importance of saving and investing. The challenge is that as we age, sources of income and job opportunities may decrease, and risk factors may increase. On the other hand, when we’re young, we have time and the ability to take more risks. That’s why starting early with just Rs 4,000 a month in a mutual fund SIP can help you build a retirement fund of Rs 3 crore. Let’s understand how.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is SIP?
A systematic investment plan (SIP) is a method of investing in mutual funds by regularly contributing a fixed amount of money at predetermined intervals.
How SIP works?
SIP works like a recurring investment, where the amount is auto-debited from your bank account and invested in the mutual fund of your choice.
Starting early is the key
Starting investments early allows compound interest to work over a longer period. One can achieve their financial goals with smaller monthly investments when starting young.
Rs 4,000 monthly SIP: Calculation Condition
Let us understand how one can get close to generating Rs 3 crore corpus by investing Rs 4,000 monthly in SIP for 10, 20, 30, and 37 years. We will consider a 12 per cent annualised return.
Calculation condition to build Rs 3 crore corpus with Rs 4,000 monthly SIP in 10 years
Investment period: 10 years
Monthly investment: Rs 4,000
Target corpus: Rs 3,00,00,000
Annualised return: 12 per cent
What will be estimated corpus in 10 years with monthly SIP of Rs 4,000?
If investors invest Rs 4,000 monthly in mutual fund SIP for 10 years, they can accumulate an estimated corpus of Rs 9,29,356. During that time, the invested amount will be around Rs 4,80,000, and the estimated capital gains will be Rs 4,49,356.
Calculation condition to build Rs 3 crore corpus with Rs 4,000 monthly SIP in 20 years
Investment period: 20 years
Monthly investment: Rs 4,000
Target corpus: Rs 3,00,00,000
Annualised return: 12 per cent
What will be estimated corpus in 20 years with monthly SIP of Rs 4,000?
If investors invest Rs 4,000 monthly in mutual fund SIP for 20 years, they can accumulate an estimated corpus of Rs 39,96,592. During that time, the invested amount will be around Rs 9,60,000, and the estimated capital gains will be Rs 30,36,592.
Calculation condition to build Rs 3 crore corpus with Rs 4,000 monthly SIP in 30 years
Investment period: 30 years
Monthly investment: Rs 4,000
Target corpus: Rs 3,00,00,000
Annualised return: 12 per cent
What will be estimated corpus in 30 years with monthly SIP of Rs 4,000?
The estimated corpus will be Rs 1,41,19,655. The amount invested during that time will be Rs 14,40,000, and the estimated capital gains will be Rs 1,26,79,655.
What will be estimated corpus in 37 years with monthly SIP of Rs 4,000?
The estimated corpus will be Rs 3,30,98,046. The amount invested during that time will be Rs 17,76,000, and the estimated capital gains will be Rs 3,13,22,046.