SIP Return Projections: How many years it will take to create Rs 50,000,000 corpus from Rs 5,000, Rs 7,500 and Rs 10,000 monthly SIP investments?
Power of Compounding: Small investments can create a large corpus if one invests consistently for a long term. Even a Rs 5,000 monthly SIP investment can create a corpus worth Rs 5 crore with an investment of just Rs 23.40 lakh.
SIP Return Calculations: SIP Return Calculations: Everyone dreams of a large corpus post retirement that can help them live a good life and give them a sense of financial freedom. But the preparation of good time comes through efforts made during hard time. Similarly, the preparation of a corpus as large as Rs 5 crore can be started from the time when you work hard to earn. The condition is to save and invest that amount regularly. Even SIPs such as Rs 5,000, Rs 7,500, and Rs 10,000 a month can create a Rs 5 crore corpus. This can happen because of the power of compounding, which increases returns faster as investment grows older. Know how compounding can create high corpuses with small monthly investments and how Rs 5,000, Rs 7,500, and Rs 10,000 monthly investments can create a Rs 5 crore corpus.
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Compounding in SIP returns
One doesn't need to time the market when an investor is investing in mutual funds through a systematic investment plan (SIP), but SIP investment is suitable for investors with a long-term horizon.
Compounding in SIP returns
SIP also provides compound returns, which shows results more significantly in the long term. So, the higher one stays in their SIP investments, the higher corpus they may generate. Understand it through examples.
From Rs 1,000 monthly SIP investment to Rs 1.18 crore corpus
At 12 per cent annualised SIP return, a Rs 1,000 monthly SIP investment can create an estimated corpus of Rs 9,99,148 on an overall investment of Rs 2,40,000.
From Rs 1,000 monthly SIP investment to Rs 1.18 crore corpus
But if the same investor continues their investment for 20 more years, the same investor can grow to an estimated Rs 1,18,82,420 at an investment of Rs 4,80,000.
From Rs 2,500 monthly SIP investment to nearly Rs 3 crore corpus
If one starts a Rs 2,500 monthly SIP and invests for 20 years, at a 12 per cent annualised returns, they can generate an estimated corpus of Rs 24,97,870.
From Rs 2,500 monthly SIP investment to nearly Rs 3 crore corpus
But if they continue it for 20 more years, the estimated corpus will swell to Rs 2,97,06,051 at an overall investment of Rs 12,00,000.
Calculations for story
We will show that at 12 per cent annualised SIP return, in how years, can Rs 5,000, Rs 7,500, and Rs 10,000 monthly SIP investments create a Rs 5 crore corpus.
From Rs 5,000 to Rs 5 crore corpus
It will take an estimated 39 years to reach the retirement corpus of Rs 5 crore.
From Rs 5,000 to Rs 5 crore corpus
The total investment in those years will be Rs 23,40,000, estimated capital gains will be Rs 5,03,28,385, and the estimated corpus will be Rs 5,26,68,385.
From Rs 7,500 to Rs 5 crore corpus
It will take an estimated 36 years to reach the retirement corpus of Rs 5 crore from a Rs 7,500 monthly SIP investment.
From Rs 7,500 to Rs 5 crore corpus
The total investment in those years will be Rs 32,40,000, estimated capital gains will be Rs 5,17,48,808, and the estimated corpus will be Rs 5,49,88,808.
From Rs 10,000 to Rs 5 crore corpus
It will take an estimated 33 years to create a Rs 5 crore retirement corpus from Rs 10,000 monthly SIP investment.
From Rs 10,000 to Rs 5 crore corpus
The total investment in those years will be Rs 39,60,000, estimated capital gains will be Rs 4,69,79,981, and the estimated corpus will be Rs 5,09,39,981.