Power of Rs 10,000 SIP: Can one achieve Rs 6 crore corpus with Rs 10,000 monthly investment?
Starting with Rs 10,000 monthly investment to building Rs 6 crore may sound untrue but one can achieve this target with consistent and disciplined investment. Let’s understand how it can happen with the combination of the power of compounding and systematic investment plans (SIPs).
SIP and the power of compounding go hand in hand and they are a popular investment option that can help individuals build a sizeable retirement corpus. Even a small amount can bring a big change. The clue to generating a sizeable corpus is starting early and staying consistent. The power of compounding plays a great role, it encourages people to create goals and then work on them to achieve them. Similarly, if you invest Rs 1o,000 in a monthly systematic investment plan (SIP) you can generate a retirement corpus of Rs 6 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 in mutual fund?
A systematic investment plan (SIP) is a process of investing a fixed amount in mutual funds. You can invest daily, weekly, monthly, quarterly, or yearly, it depends on the choice of the investors.
Why should one invest in mutual fund SIP?
SIP is perfect for beginners, by investing even a small amount regularly, first-time investors can start their journey toward building a sizeable corpus.
Why should one start investing early?
The earlier you start the more time your money has time to grow. Let’s understand it through a calculation.
Early investment
Investor A: Starts investing Rs 5,000 a month at age 25 and continues till age 45 (20 years).
Total Investment: Rs 12,00,000
Maturity Amount (at 12 per cent annual return): Rs 50,00,000
Investor B: Starts investing Rs 5,000 a month at age 35 and continues till age 55 (20 years).
Total Investment: Rs 12,00,000
Maturity Amount (at 12 per cent annual return): Rs 28,00,000
By starting 10 years earlier, Investor A earns Rs 22,00,000 more, showcasing the power of compounding.
SIP: Calculation condition
Target corpus: Rs 6 crore
Monthly investment: Rs 10,000
Annualised return: 12 per cent
How long it will take to create a corpus of Rs 6 crore?
It will approximately take 35 years to generate Rs 6 crore.
How much can Rs 10,000 SIP build in 10 years?
The invested amount will be Rs 12,00,000, the capital gains will be Rs 11,23,391, and the estimated retirement corpus will be Rs 23,23,391.
How much can Rs 10,000 SIP build in 20 years?
The invested amount will be Rs 24,00,000, the capital gains will be Rs 75,91,479, and the estimated retirement corpus will be Rs 99,91,479.
How much can Rs 10,000 SIP generate in 30 years?
The invested amount will be Rs 36,00,000, the capital gains will be Rs 3,16,99,138, and the estimated retirement corpus will be Rs 3,52,99,138.
How much can Rs 10,000 SIP generate in 35 years?
The invested amount will be Rs 42,00,000, the capital gains will be Rs 6,07,52,691, and the estimated retirement corpus will be Rs 6,49,52,691.