Power of SIP: How Rs 40/day savings can take you to Rs 1.43 cr corpus?
Power of SIP: Want to buy your dream car, house, or jewellery? Whatever your goal is, with a small saving every day and the right investment strategy, you can easily approach that goal. Let’s explore how saving Rs 40 daily through a monthly SIP can grow over 20, 25, 30, 35, and 40 years, assuming an average annual return of 12 per cent.
Power of SIP: Want to buy your dream car, house, or jewellery? Whatever your goal is, with a small saving every day and the right investment strategy, you can easily approach that goal. One of the most popular and best investment options available these days is the SIP (Systematic Investment Plan). In this investment approach, you need to be disciplined and consistent, and you will be able to accumulate a significant corpus.
(Disclaimer: This is not investment advice. Calculations are projections. Please do your own due diligence or consult an advisor for retirement planning.)
Rs 40 daily through a monthly SIP
Let’s explore how saving Rs 40 daily through a monthly SIP can grow over 20, 25, 30, 35, and 40 years, assuming an average annual return of 12 per cent.
Investment Growth with Rs 40 Daily Savings
Suppose a person saves Rs 40 every day and starts an SIP of that amount (approximately Rs 1,200) at the beginning of the month. Let’s now understand, with the help of the SIP calculator, how much corpus he/she can create in the next 20, 25, 30, 35, and 40 years. The average SIP return over the long term is assumed to be 12 percent per annum.
SIP Calculation: 20-Year Fund by Saving Rs 40
According to the SIP calculator, he/she will invest a total of Rs 2,88,000 in 20 years. Based on an average annualized return of 12 percent, the estimated capital gain will be Rs 9,10,978. Adding both, he/she will get the estimated corpus of Rs 11,98,978.
SIP Calculation: 25-Year Fund by Saving Rs 40
In 25 years, he/she will invest a total of Rs 3,60,000. Based on an average annualized return of 12 percent, the estimated capital gain will be Rs 19,17,162. Adding both, he/she will get an estimated corpus of Rs 22,77,162.
SIP Calculation: 30-Year Fund by Saving Rs 40
According to the SIP calculator, based on an average annualized return of 12 percent, he/she can create an estimated fund of Rs 42,35,897 in 30 years. The investment amount in this will be Rs 4,32,000, and the estimated capital gain will be Rs 38,03,897.
SIP Calculation: 35-year fund by saving Rs 40
In 35 years, he/she will invest a total of Rs 5,04,000. Based on an average annualized return of 12 percent, the estimated capital gain will be Rs 72,90,323. Adding both, he/she will get an estimated corpus of Rs 77,94,323.
SIP Calculation: 40-year fund by saving Rs 40
According to the SIP calculator, he/she will invest a total of Rs 5,76,000 in 40 years. Based on an average annualized return of 12 percent, the estimated capital gain will be Rs 1,36,82,904. Adding both, he/she will get the estimated corpus of Rs 1,42,58,904.
Start Early for Greater Benefits
Starting an SIP as early as possible can significantly increase your corpus. For instance, if you begin investing Rs 2,000 monthly at age 20, by the time you're 60, you could accumulate more than Rs 2.37 crore (approximately).
SIP: Understanding the Risks
While SIPs offer a disciplined investment approach with benefits like compounding and rupee cost averaging, they are not without risks.
SIP: Understanding the Risks
Market fluctuations can affect mutual fund returns, and past performance does not guarantee future results. It's crucial to evaluate your financial goals, income, and risk tolerance before investing.