Small Savings, Big Impact: How saving Rs 75/day to invest can help you create Rs 1 crore corpus | Know calculations
SIP Investment: Everyone wants to accumulate a significant corpus for essential needs and emergencies, such as their child's education, retirement, buying a house, and more. For individuals looking to build a substantial corpus through consistent and disciplined investments, SIP can be an excellent option. In this write-up, we will show you how saving Rs 75/day and investing can help you create a corpus of over Rs 1 crore.
(Disclaimer: Our calculations are projections and not financial advice. Please do your own due diligence or consult an expert for financial planning.)
What is an SIP Mutual Fund?
A SIP (Systematic Investment Plan) is a disciplined way to invest a fixed amount in mutual funds at regular intervals—monthly, quarterly, or yearly.
Power of Compounding
SIP allows you to harness the power of compounding, enabling your investments to grow over time with market returns.
Start Early for Better Returns
One of the key benefits of investing through a SIP is starting early. The earlier you begin, the more time your money has to grow.
Example of Start Early SIP
For example, if an investor starts investing at the age of 25 with Rs 1,000 per month and continues to invest regularly for 30 years, they could achieve a corpus of Rs 35,29,914 by the age of 55. However, if the same person begins investing at 35 and continues until the age of 55, they would accumulate a corpus of only Rs 9,99,148 over 20 years.
Rs 75/Day Saving and Investing to Build a Rs 1 Crore Corpus
Let’s now calculate how saving Rs 75/day (which totals around Rs 2,250 per month) and investing can help you build a corpus of over Rs 1 crore.
Assuming a 12% Annualised Return
For this calculation, we are assuming an annualised return of 12 per cent.
How Much Time Will It Take to Create a Rs 1 Crore Corpus with Rs 75/Day Savings?
To build a corpus of Rs 1 crore with Rs 75/day savings, you would need to invest in an SIP for 32 years.
Total Investment Calculation (Rs 75/Day for 32 Years)
If you save Rs 75/day and invest Rs 2,250 per month in an SIP for 32 years, your total investment will amount to Rs 8,64,000.
Estimated Capital Gains at 12% Annualised Return
With an average return rate of 12 per cent, your estimated capital gain would be approximately Rs 92,81,918 over 32 years.
Total Amount After 32 Years
After 32 years, your investment could grow to approximately Rs 1,01,45,918. This includes both the estimated capital gain and the total amount invested.
Full Calculation for Rs 75/Day Saving and Investing Over 32 Years
Investing in an equity mutual fund (Rs 2,250 monthly SIP, 12 per cent return, for 32 years):
- Total Investment: Rs 8,64,000
- Capital Gains: Rs 92,81,918
- Total Value: Rs 1,01,45,918
SIP Returns: What You Need to Know
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.