SIP for beginners: Start with Rs 3,000 monthly investment to build Rs 1 crore corpus
If you are a beginner ready to invest in a systematic investment plan (SIP) but confused about how and when to begin, here, you can find a bit of help to ease your investment. If you are ready to invest, it’s time you should start your SIP journey. You can start with just Rs 3,000 monthly investment and work towards building Rs 1 crore corpus. Let’s understand what is SIP and how it can help create small investments into a large corpus with a consistent and disciplined investment strategy.
SIP, or Systematic Investment Plan, is a smart and disciplined way to grow your wealth in long run. For beginners, it’s a great way to start investing with small amounts, like Rs 3,000 per month, and steadily work towards achieving your goal, such as building Rs 1 crore corpus. The achievement of the target lies in consistency and the power of compounding, which helps your investments grow over the long term.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
Power of SIP and compounding
A SIP allows investors to invest a fixed amount either daily, weekly, monthly, half-yearly, or yearly. Through the power of compounding, the amount invested grows gradually. It generates earnings not only on the original principal amount but also on the accrued earnings.
Benefits of SIP
Affordability: Begin with as little as Rs 100 monthly.
Flexibility: Increase or decrease your SIP amount as needed.
Long-term growth
Impact of starting early
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.
Why choose SIP?
SIP is a disciplined approach to investing. It allows investors to invest small amounts regularly in mutual funds which can help them achieve their financial goals.
Suitable for all ages
SIPs are ideal for families looking to save for their children’s education or marriage.
Even retirees can benefit from SIPs as a means of managing their post-retirement finances.
For young investors, SIPs offer a great way to start building short term financial goals.
How soon can investors reach Rs 1 crore corpus?
Monthly investment: Rs 3,000
Target corpus: Rs 1 crore
Annualised return: 12 per cent
Time period to reach target corpus: 30 years
SIP: calculation conditions
Here, we are taking 12 per cent annualised return and for better understanding we will break down the calculation into 10 years each.
How much corpus one can build with Rs 3000 monthly SIP in 10 years
In 10 years, the estimated corpus will be Rs 6,97,017. Meanwhile, the amount invested during that time will be around Rs 3,60,000, and the estimated capital gains will be Rs 3,37,017.
How much corpus one can build with Rs 3000 monthly SIP in 20 years
In 20 years, the estimated corpus will be Rs 29,97,444. Meanwhile, the amount invested during that time will be approximately Rs 7,20,000, and the estimated capital gains will be Rs 22,77,444.
How much corpus one can build with Rs 3000 monthly SIP in 30 years
In 30 years, which is the actual time period to reach the target corpus, the estimated retirement corpus will be Rs 1,05,89,741. During that time, the invested amount will be approximately Rs 10,80,000, and the estimated capital gains will be Rs 95,09,741.