Power of Compounding: How long it will take to build Rs 5 crore corpus with Rs 5,000, Rs 10,000 and Rs 15,000 monthly investments?
Explore how the power of compounding can help one build Rs 5 crore corpus with monthly investments of Rs 5,000, Rs 10,000, or Rs 15,000.
The power of compounding is a game changer when it comes to building a satisfactory corpus. It allows your investments to grow gradually as your returns start earning returns. For individuals aiming to build a corpus of Rs 5 crore, the monthly investment amount and the time frame play important roles. By contributing Rs 5,000, Rs 10,000, or Rs 15,000 monthly, one can achieve this financial goal with the right mixture of consistency and patience. Factors like investment duration and expected annualised returns impact the time it takes to reach your goal. Let’s explore how long it will take to reach Rs 5 crore with these investments.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
Read more: Power of Compounding: How soon will monthly SIP of Rs 11,000 reach Rs 8 crore corpus target?
Understanding the power of compounding
The power of compounding is a financial principle that allows your money to grow gradually. It works by reinvesting your earnings and enabling them to generate additional returns.
Introduction to SIP
SIP stands for a Systematic investment plan that allows the investors to invest a fixed amount in a mutual fund scheme at regular intervals.
Early investment
Starting investing early can be more advantageous for investors than starting it late. They can not only review their investment strategy many times but they can also contribute enough time to let their corpus grow.
Benefits of compounding
Helps to achieve financial goals
The longer one invests, the greater the impact of compounding
It works automatically, after setting up your investments
Follow disciplined approach
A disciplined investment with a consistent contribution can help investors create a large retirement corpus with the effect of the power of compounding.
How long it will take to build Rs 5 crore with Rs 5,000 monthly SIP
It will take approximately 39 years to achieve the target of Rs 5 crore retirement corpus.
From Rs 5,000 monthly SIP to Rs 5 crore corpus at 12 per cent annualised return
The investment amount during this time will be approximately Rs 23,40,000. The estimated capital gains will be Rs 5,03,28,385 and the estimated retirement corpus will be Rs 5,26,68,385.
How long it will take to build Rs 5 crore with Rs 10,000 monthly SIP
It will take approximately 33 years to achieve the target of Rs 5 crore retirement corpus.
From Rs 10,000 monthly SIP to Rs 5 crore corpus
The investment amount will be approximately Rs 39,60,000. The estimated capital gains will be Rs 4,69,79,981 and the estimated retirement corpus will be Rs 5,09,39,981.
How long it will take to build Rs 5 crore with Rs 15,000 monthly SIP
It will take approximately 30 years to achieve the target of Rs 5 crore retirement corpus.
From Rs 15,000 monthly SIP to Rs 5 crore corpus
The investment amount during this time will be approximately Rs 54,00,000. The estimated capital gains will be Rs 4,75,48,707 and the estimated retirement corpus will be Rs 5,29,48,707.