Power of Compounding: In how many years will Rs 10,000, Rs 12,000, and Rs 15,000 monthly SIP investment grow to Rs 8 crore corpus?
To experience the power of compounding, one must start investing early and they would be able to gather a large sum at the retirement age. Here, we will understand how many years it will take to build a corpus of Rs 8 crore with Rs 10,000, Rs 12,000, and Rs 15,000 in a monthly systematic investment plan (SIP).
You might be aware of compound interest as it was introduced in school. But have you ever thought it can impact your life when you grow up? The knowledge of compounding can enable an investor to gather a large corpus through a small monthly investment if their investment horizon is long. If you have a stable monthly income and somehow manage to save up to Rs 10,000-15,000 per month, you can build a large retirement corpus. Here, we will understand how long it will take to build Rs 8 crore retirement corpus with monthly SIP of Rs 10,000, Rs 12,000, and Rs 15,000. Take a look!
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
Understanding Power of compounding
The power of compounding is an investment to generate earnings not only on the original principal amount but also on the accrued earnings. The greater the number of compounding periods, the greater the compound interest growth. Investors can invest a fixed amount, either daily, weekly, monthly, or yearly.
Understanding SIP
In a systematic investment plan, investors can invest a fixed amount in a mutual fund scheme at regular intervals. The investment in SIP can be done daily, weekly, monthly, quarterly, or half-yearly, yearly.
Benefits of compounding
Your savings can grow faster
Long-term growth
Reduces risk
Why choose SIP?
Affordable
Convenient
Flexible
Start early
Every financial journey begins with a single step. Even the smallest investments can grow to a huge amount to help you meet your financial goals.
From Rs 10,000 monthly SIP to Rs 8 crore corpus at 12 per cent annualised return
It will take approximately 37 years to achieve the target of Rs 8 crore retirement corpus. During that time, the investment will be Rs 44,40,000, the estimated capital gains will be Rs 7,83,05,114 and the estimated retirement corpus will be Rs 8,27,45,114.
From Rs 12,000 monthly SIP to Rs 8 crore corpus
It will take approximately 36 years to achieve the target of Rs 8 crore retirement corpus. During that time, the investment will be Rs 51,84,000, the estimated capital gains will be Rs 8,27,98,093 and the estimated retirement corpus will be Rs 8,79,82,093.
From Rs 15,000 monthly SIP to Rs 8 crore corpus
It will take approximately 34 years to achieve the target of Rs 8 crore retirement corpus. During that time, the investment will be Rs 61,20,000, the estimated capital gains will be Rs 8,01,72,808 and the estimated retirement corpus will be Rs 8,62,92,808.
At what age can you receive a corpus of Rs 8 crore with Rs 10,000 monthly SIP
If you start investing at the age of 20, by the time you reach 57, you can build a retirement corpus of Rs 8 crore.
At what age can you receive a corpus of Rs 8 crore with Rs 12,000 monthly SIP
If you start investing at the age of 25, by the time you reach 61, you can build a retirement corpus of Rs 8 crore.
At what age can you receive a corpus of Rs 8 crore with Rs 15,000 monthly SIP
If you start investing at the age of 30, by the time you reach 64, you can build a retirement corpus of Rs 8 crore.
Step-up SIP: How many years it will take to build Rs 8 crore corpus through step-up SIP
Target corpus: Rs 8 crore
Annual step up: 5 per cent
Annualised rate of return: 12 per cent
Monthly investment amount: Rs 10,000: It will take 34 years to reach the goal of Rs 8 crore corpus.
Monthly investment amount: Rs 12,000: It will take 32 years to reach Rs 8 crore corpus goal.
Monthly investment amount: Rs 15,000: It will take 31 years to reach Rs 8 crore corpus goal.