Power of Compounding: Why it is possible to achieve more than Rs 3.50 crore corpus with just Rs 100 savings a day; know its maths
Discover how the power of compounding can help you build a Rs 2.50 crore corpus with just Rs 100 savings a day. Learn about SIP, pension plans, and ULIP benefits.
Unlock the power of compounding to achieve financial success by saving just Rs 100 a day. With a systematic investment plan (SIP), pension plans, and ULIP retirement options, you can steadily grow your wealth over time. Understanding the power of compounding and its impact on your investment can help you build a significant retirement corpus. Learn how consistent contributions with a 12% return can turn small investments into a large fund worth over Rs 3.5 crore in 40 years.
Systematic Investment Plan (SIP)
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What is SIP?
A SIP, or Systematic Investment Plan, is a disciplined way to invest small amounts regularly into market-linked investment options. This allows you to purchase fund units over time, gradually building wealth.
What is SIP?
A SIP, or Systematic Investment Plan, is a disciplined way to invest small amounts regularly into market-linked investment options. This allows you to purchase fund units over time, gradually building wealth.
How Does SIP Help?
SIPs smooth out market volatility by averaging your purchase cost, reducing the impact of short-term market fluctuations on your investment.
Building a Retirement Corpus with a Pension Plan
What is a Pension Plan?
A pension plan, also known as a retirement plan, helps you save systematically for post-retirement needs. It offers a steady income through a one-time lump sum or regular contributions, securing your financial future.
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Why Choose a Pension Plan?
These plans provide a stable income, allowing you to enjoy retirement without financial stress.
A pension plan, also known as a retirement plan, helps you save systematically for post-retirement needs. It offers a steady income through a one-time lump sum or regular contributions, securing your financial future.
Why Choose a Pension Plan?
These plans provide a stable income, allowing you to enjoy retirement without financial stress.
Why Choose a Pension Plan?
These plans provide a stable income, allowing you to enjoy retirement without financial stress.
Power of Compounding Explained
What is Compounding?
Compounding is the process where your investment earns returns not only on the initial amount but also on the accumulated returns from previous periods. This "interest on interest" helps your wealth grow exponentially.
How Can Compounding Help Achieve Financial Goals?
When invested wisely, compounding can significantly grow your corpus, helping you reach long-term financial goals such as retirement.
Calculation: How Rs 100 Daily Savings Grows Over 40 Years
Investment Assumptions
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- Monthly Investment: Rs 3,000 (equivalent to Rs 100/day)
- Expected Rate of Return: 12%
- Investment Period: 40 years
- Monthly Investment: Rs 3,000 (equivalent to Rs 100/day)
- Expected Rate of Return: 12%
- Investment Period: 40 years
Wealth Accumulated
- Total Invested Amount: Rs 14,40,000
- Estimated Returns: Rs 3,42,07,261
- Total Value After 40 Years: Rs 3,56,47,261
Achieving a Comfortable Retirement Corpus
Starting Early
For example, if you start investing at age 20 and retire at 60, your SIP returns could reach over Rs 3.5 crore in 40 years with consistent contributions and compounded growth
Why Consistency is Key
Regular contributions, no matter how small, combined with compounding, can create substantial wealth over time.