SIP Investment: Rs 100/day savings can help you build Rs 3.56 crore corpus; understand calculations of 10, 20, 30, and 40 years
SIP Calculation: Whether you're a salaried professional, a business owner, or anyone interested in long-term investment, mutual fund SIPs (Systematic Investment Plans) offer a straightforward and effective way to build substantial wealth over time. With SIPs, you can start investing with as little as Rs 500 per month. By regularly saving and investing this amount, you can accumulate a significant corpus. Let's explore how saving Rs 100 daily through a monthly SIP can grow over 10, 20, 30, and 40 years, assuming an average annual return of 12 per cent.
Investment Growth with Rs 100 Daily Savings
Suppose a person saves Rs 100 every day and starts an SIP of that amount (approximately Rs 3000) at the beginning of the month. Let us now understand with the help of SIP calculator how much corpus he/she can create in the next 10, 20, 30 and 40 years. The average SIP return over the long term is 12 per cent per annum. This estimated return is taken because the long-term return of the index is considered to be more or less 12 percent.
SIP Calculation: 10-year fund by saving Rs 100
Let's assume you invest Rs 3000 monthly (approximately Rs 100 daily) in SIP for 10 years. According to the SIP calculator, based on an average annualised return of 12 per cent, he/she can create an estimated corpus of Rs 6,97,017 in 10 years. In this, the investment amount will be Rs 3,60,000 and the estimated long-term capital gain will be Rs 3,37,017.
SIP Calculation: 20-year fund by saving Rs 100
Suppose a person saves Rs 100 every day (approximately Rs 3000 monthly) and invests in SIP for 20 years. According to the SIP calculator, based on an average annualised return of 12 per cent, he/she can create an estimated fund of Rs 29,97,444 in 20 years. The investment amount in this will be Rs 7,20,000 and the estimated capital gain will be Rs 22,77,444.
SIP Calculation: 40-year fund by saving Rs 100
Let's assume a person saves Rs 100 every day (approximately Rs 3000 monthly) and starts a SIP for 40 years. According to the SIP calculator, based on an average annual return of 12 per cent, he/she can create an estimated fund of Rs 3,56,47,261 in 40 years. The investment amount in this will be Rs 14,40,000 and the estimated capital gain will be Rs 3,42,07,261.
SIP Calculation: 30-year fund by saving Rs 100
Suppose a person saves Rs 100 every day (approximately Rs 3000 monthly) and invests in SIP for 30 years. According to the SIP calculator, based on an average annual return of 12 per cent, he/she can create an estimated corpus of Rs 1,05,89,741 in 30 years. The investment amount in this will be Rs 10,80,000 and the estimated long term capital gain will be Rs 95,09,741.
Start Early for Greater Benefits
Starting an SIP as early as possible can significantly increase your corpus. For instance, if you begin investing Rs 3,000 monthly at age 20, by the time you're 60, you could accumulate more than Rs 3.5 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. 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.
Disclaimer: The returns mentioned are based on SIP calculations and are subject to market risks. Actual returns may vary. Consult a financial advisor before making any investment decisions.