Power of compounding: How soon can Rs 6,000, Rs 8,000, and Rs 10,000 monthly SIP build Rs 4 crore corpus?
Power of compounding: Savings without investment is like a tree without fruit. Thus, if you want to check the potential of your savings, you can invest it and let it grow until it yields a satisfactory corpus. Therefore, here we will understand how early can Rs 6,000, Rs 8,000, and Rs 10,000 build Rs 4 crore retirement corpus through monthly systematic investment plan (SIP).
Power of compounding: The true quality or value of something can only be judged by experiencing it directly, same goes for the investment. The earlier the better, the investors must start investing early to experience the strong impact of compounding. If you have a stable monthly income and somehow manage to save up to Rs 10,000 per month, you can build a large retirement corpus. Here, we will understand, how soon can Rs 6,000, Rs 8,000, and Rs 10,000 monthly SIP build Rs 4 crore corpus goal.
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(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning)
Introduction to SIP
A systematic investment plan (SIP) is a process of investing in a mutual fund with a fixed amount, either daily, weekly, monthly, or yearly. Investors can start with a minimum amount of Rs 100. SIP spreads the investment over time. It minimises financial pressure on investors and also helps to save for large expenses and financial goals.
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 power of compounding can work wonders in mutual funds SIP. Investors can invest a fixed amount, either daily, weekly, monthly, or yearly. The returns earned on these investments are then reinvested back into the fund, allowing investors to take advantage of compounding effects.
Benefits of compounding
Your savings can grow faster
Long-term growth
Reduces risk
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.
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.
It can be beneficial for salaried employees.
From Rs 6,000 monthly SIP to Rs 4 crore corpus at 12 per cent annualised return
It will take approximately 36 years to achieve the target of Rs 4 crore retirement corpus. During that time, the investment will be Rs 25,92,000, the estimated capital gains will be Rs 4,13,99,047 and the estimated retirement corpus will be Rs 4,39,91,047.
From Rs 8,000 monthly SIP to Rs 4 crore corpus
It will approximately take 33 years to achieve the target of Rs 4 crore corpus. During that time, the investment will be Rs 31,68,000, the estimated capital gains will be Rs 3,75,83,985 and the estimated retirement corpus will be Rs 4,07,51,985.
From Rs 10,000 monthly SIP to Rs 4 crore corpus
It will take approximately 31 years to achieve the target of Rs 4 crore corpus. During that time, the investment will be Rs 37,20,000, the estimated capital gains will be Rs 3,61,84,045 and the estimated retirement corpus will be Rs 3,99,04,045.