Power of Compounding: Eyeing Rs 10 crore retirement corpus? Know how it can be achieved through Rs 16,000, Rs 18,000, and Rs 20,000 monthly SIP investments
Starting early and investing for a longer period can help one benefit from the power of compounding better as beginning early gives enough time to grow one’s corpus in the long run. Therefore, let’s find out how soon Rs 16,000, Rs 18000, and Rs 20,000 monthly SIP investments can build Rs 10 crore.
Compound and systematic investment plans (SIPs) are closely related. One invests a fixed amount monthly in SIP and lets the compounding do its work by growing your money in the long run. For the same, one has to be consistent and disciplined with their investment. Plus a deep knowledge about the power of compounding can be a positive factor that can help investors boom. In this article, we will explore how quickly can a monthly SIP of Rs 16,000 to Rs 20,000 help achieve the target of Rs 10 crore.
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(Disclaimer: Our calculations are projections and not investment advice. Do you own due diligence or consult an expert for financial planning)
Read more: Power of Rs 15,000 SIP: How long it will take to achieve Rs 7 crore corpus? See calculations to know
Let’s understand what is power of compounding
As per its definition, the power of compounding is a process to generate earnings not only on the original principal amount but also on the accrued earnings.
Understanding systematic investment plan
SIP is an investment option where investors can invest a fixed amount either daily, weekly, monthly, quarterly, or half-yearly, yearly.
How can compound benefit an individual?
It can help your investment grow faster
It is better for long-term growth
It reduces risk
Why should one choose SIP?
It is affordable
SIP is Convenient
A systematic investment plan (SIP) is flexible
Power of compounding: Calculations Condition
Target corpus: Rs10 crore
Monthly investments: Rs 16,000, Rs 18,000, Rs 20,000
Annualised return: 12 per cent
How many years it will take to build Rs 10 crore with monthly SIP of Rs 16,000
It will approximately take 35 years to generate the target corpus of Rs 10 crore.
From Rs 16,000 to Rs 10 crore retirement corpus at 12 per cent annualised return
The investment amount will be Rs 67,20,000, the estimated capital gains will be Rs 9,72,04,305, and the estimated retirement corpus will be Rs 10,39,24,305.
How many years it will take to build Rs 10 crore with monthly SIP of Rs 18,000
It will approximately take 34 years to generate the target corpus of Rs 10 crore.
From Rs 18,000 to Rs 10 crore retirement corpus
The investment amount will be Rs 73,44,000, the estimated capital gains will be Rs 9,62,07,370, and the estimated retirement corpus will be Rs 10,35,51,370.
How many years it will take to build Rs 10 crore with monthly SIP of Rs 20,000
It will approximately take 33 years to generate the target corpus of Rs 10 crore.
From Rs 20,000 to Rs 10 crore retirement corpus
The investment amount will be Rs 79,20,000, the estimated capital gains will be Rs 9,39,59,962, and the estimated retirement corpus will be Rs 10,18,79,962.