Power of Compounding: How long will it take to build 7 crore corpus with Rs 12,000, Rs 15,000 and Rs 20,000 monthly investments?
Building a large retirement corpus can be a dream for many, but how to realise it in practicality can be a tough task for many. Here, we will understand how an individual can build a Rs 7 crore retirement corpus with Rs 12,000, Rs 15,000, and Rs 20,000 monthly SIP investments.
A 7 crore retirement corpus can be a huge amount for many. It can also be a sufficient amount for many individuals seeking financial freedom at their retirement stage. It may look difficult to build such a large corpus but with disciplined and consistent investing, one can build it. Thus, in this article, we will learn how long will it take to build a retirement corpus of Rs 7 crore by investing Rs 12,000, Rs 15,000, and Rs 20,000 through a monthly systematic investment plan (SIP) in a mutual fund scheme(s).
Photos source: Pixabay/Representational
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
Power of compounding
You must be aware of compound interest, as it was introduced to students back in school. Well, the power of compounding is the method to generate earnings not only on the principal amount but also on the accrued earnings of compounding periods.
Understanding SIP
SIP stands for a Systematic investment plan that allows investors to invest a fixed amount in a mutual fund scheme at regular intervals. The investment in SIP can be done according to the choice of the investor- daily, weekly, monthly, quarterly, half-yearly, or yearly.
Advantage of starting early
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
Encourages long-term financial goal planning
Investors savings can grow faster
Reduces risk
How long will it take to build Rs 7 crore corpus with Rs 12,000 monthly SIP?
It will take 35 years to build a retirement corpus of Rs 7 crore with Rs 12,000 monthly SIP. If you start investing at the age of 25, by the time you reach 60 you can accumulate this corpus.
How long will it take to build Rs 7 crore corpus with Rs 15,000 monthly SIP?
It will take 33 years to build a retirement corpus of Rs 7 crore with Rs 15,000 monthly SIP. If you start investing at the age of 25, by the time you reach 58 you can accumulate this corpus.
How long will it take to build Rs 7 crore corpus with Rs 20,000 monthly SIP?
It will take 30 years to build a retirement corpus of Rs 7 crore with Rs 20,000 monthly SIP. If you start investing at the age of 25, by the time you reach 55 you can accumulate this corpus. See calculations.
From Rs 12,000 monthly SIP to Rs 7 crore corpus at 12 per cent annualised return
The estimated retirement corpus will be Rs 7,79,43,229. The invested amount during this period will be Rs 50,40,000, and capital gains will be Rs 7,29,03,229.
From Rs 15,000 monthly SIP to Rs 7 crore corpus at 12 per cent annualised return
The estimated retirement corpus will be Rs 7,64,09,971. The invested amount during this period will be Rs 59,40,000, and capital gains will be Rs 7,04,69,971.
From Rs 20,000 monthly SIP to Rs 7 crore corpus at 12 per cent annualised return
he estimated retirement corpus will be Rs 7,05,98,275. The invested amount during this period will be Rs 72,00,000, and capital gains will be Rs 6,33,98,275.