Power of Compounding: How big corpus can Rs 12,000 monthly SIP generate in 20, 30, and 40 years?
Early investment plays an important role in building a large retirement corpus. As an investor, if you start investing a small amount monthly and continue it for a long duration, there is a chance that your corpus can be larger than someone starting with a larger amount and a shorter duration. In this article, we will find out how much corpus can Rs 12,000 monthly systematic investment plan (SIP) build in 20, 30, and 40 years.
Everyone wants their money to grow but their process might differ. Some may want their money to grow quickly, while others plan it to grow in a systematic way. It may take time to build wealth, and the power of compounding plays a key role in it. Thus, let’s understand how much corpus investors can create with Rs 12,000 monthly SIP investment in 20 years, 30 years, and 40 years.
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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 a process to generate earnings not only on the principal amount but also on the accumulated earnings earned during the investment period.
Compounding effects
To maximise the power of compounding, it's important to invest for the long term. The longer your money is invested, the more time it gets to compound, resulting in greater growth potential.
Starting early is the key
An early start can help the individual build a large corpus post retirement. The key is that the longer you invest, the more you can profit from compounding.
Consistent and disciplined investment
Investors should not redeem their investments until they've reached their financial goal. The longer they stay invested, the more they can benefit from compounding.
What are the benefits of SIP?
Flexibility: Adjust investments according to your budget
The power of Compounding lets your money grow gradually with consistent investment
Automatic deductions
Investment conditions
Here, we will discuss how much corpus investors can generate with Rs 12,000 monthly SIP investment each for 20, 30, and 40 years. We will do the calculations on annualised returns of 12 per cent.
How much corpus can Rs 12,000 monthly SIP generate in 20 years?
The estimated retirement corpus in 20 years will be Rs 1,19,89,775. The investment amount during that time will be Rs 28,80,000, and the estimated capital gains will be Rs 91,09,775.
How much corpus can Rs 12,000 monthly SIP generate in 30 years?
The estimated retirement corpus in 30 years will be Rs 4,23,58,965. The investment amount during that time will be Rs 43,20,000, and the estimated capital gains will be Rs 3,80,38,965.
How much corpus can Rs 12,000 monthly SIP generate in 40 years?
The estimated retirement corpus in 40 years will be Rs 14,25,89,043. The investment amount during that time will be Rs 57,60,000, and the estimated capital gains will be Rs 13,68,29,043.
How big corpus can Rs 12,000 monthly SIP generate in 20, 30, and 40 years?
Corpus in 20 years: Rs 1,19,89,775
Corpus in 30 years: Rs 4,23,58,965
Corpus in 40 years: Rs 14,25,89,043