Power of Compounding: In how many years can Rs 8,000 monthly SIP investment grow to Rs 2 crore, Rs 4 crore, Rs 8 crore?
Power of Compounding: Whether you are a salaried employee, a small business owner, or an individual, planning for retirement is crucial for everyone. Proper retirement planning ensures that you can enjoy your life with peace and happiness. It helps you become financially stable, so you won’t have to rely on others for money to cover your daily essentials after retirement.
If you're looking to build a substantial corpus for your post-retirement life, investing in an SIP (Systematic Investment Plan) mutual fund can be a beneficial option.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is SIP?
It is a market-linked investment option offered by many mutual funds, allowing investors to invest small amounts periodically—such as monthly, quarterly, or annually—instead of making lump-sum investments.
What is Compounding?
It is the process where the value of an investment grows by earning returns on both the initial principal and the accumulated interest or profits over time.
How fast can a monthly SIP investment of Rs 9,000 build a corpus of Rs 2 crore, Rs 4 crore, and Rs 8 crore?
In this write-up, we will show through calculations how many years it will take for a monthly investment of Rs 9,000 to grow into a corpus of Rs 2 crore, Rs 4 crore, and Rs 8 crore.
Assuming an Annualised Return of 12%
For all the calculations, let's assume an average annual return rate of 12 per cent.
In how many years your Rs 9,000 monthly investment will grow to Rs 2 crore?
As per the calculations, you will need to invest in SIP for 27 years to build a corpus of Rs 2 crore.
Rs 9,000 Monthly SIP Investment: Calculations to build Rs 2 crore in 27 years
Total Investment: Rs 29,16,000
Expected Capital Gain: Rs 1,90,14,626
Total Corpus Received: Rs 2,19,30,626
In how many years your Rs 9,000 monthly investment will grow to Rs 4 crore?
To build a corpus of Rs 4 crore, you will need to invest in SIP for 32 years, shows calculation.
Rs 9,000 Monthly SIP Investment: Calculations to build Rs 4 crore in 32 years
Total Investment: Rs 34,56,000
Expected Capital Gain: Rs 3,71,27,673
Total Corpus Received: Rs 4,05,83,673
In how many years your Rs 9,000 monthly investment will grow to Rs 8 crore?
As per the calculations, to build a corpus of Rs 8 crore, you will need to invest in SIP for 38 years.
Rs 9,000 Monthly SIP Investment: Calculations to build Rs 8 crore in 38 years
Total Investment: Rs 41,04,000
Expected Capital Gain: Rs 7,99,26,623
Total Corpus Received: Rs 8,40,30,623
Important Point to Know Before Investing in SIP
It’s important to remember that SIP is a market-linked scheme, so returns are not guaranteed. The 12 per cent return mentioned above is an estimate, and actual returns may vary depending on market conditions.
See Examples-
Let's look at some examples: If the annualised return is 13 per cent 14 per cent and 15 per cent, how soon can you reach an Rs 8 crore corpus target with a Rs 9,000 SIP investment -
In how many years your Rs 9,000 monthly investment will grow to Rs 8 crore if annualised return is 13%?
According to the calculations, you will need to invest in SIP for 36 years to build a retirement corpus of Rs 8 crore.
In how many years your Rs 9,000 monthly investment will grow to Rs 8 crore if annualised return is 14%?
As per the calculations, you will need to invest in SIP for 34 years to build a retirement corpus of over Rs 8,78,55,329. While in 38 years, your corpus will reach to Rs 15,38,89,582.
In how many years your Rs 9,000 monthly investment will grow to Rs 8 crore if annualised return is 15%?
With 15 per cent annualised return, you will need to invest in SIP for 32 years to build a retirement corpus of Rs 8,52,55,421.