26+12+26 SIP Formula: In how many years, can Rs 26,000 monthly SIP investment grow to Rs 5 crore fund?

SIP or Systematic Investment Plan allows investors to invest in mutual funds, where they can invest money based on their financial capacity.

Some of the key benefits of SIP mutual funds include the power of compounding, rupee cost averaging, cost-effectiveness and diversification.

Compounding means you get growth on growth, creating a snowball effect that helps your investments grow exponentially over time.

If you also want to invest in SIP mutual funds but are confused about how to invest, then the 26+12+26 SIP formula can be beneficial for you.

This formula helps an investor create a wealth of around Rs 5 crore if he/she start investing in mutual fund SIPs and continue for 26 years. Let's understand what it is and how it works.

In the formula -  First "26" -  represents a monthly SIP of Rs 26,000.  Second "12" - denotes the annualised SIP returns.  And "26" - signifies the number of years, i.e., one needs to invest in SIP for 26 years.

Using this formula, if you start investing Rs 26,000 every month in a SIP mutual fund and continue for 26 years, your total investment will amount to Rs 81,12,000.

In 26 years, your investment will grow by around Rs 4,17,88,184 in the form of capital gains. It should be noted that the average return rate here is considered to be 12 per cent. 

At the end of 26 years, combining your initial investment and the capital gain, you will accumulate an estimated amount of Rs 4,99,00,184.

Total Investment: 81,12,000 Expected Capital Gains: 4,17,88,184 Final Corpus: Rs 4,99,00,184

By following the 26+12+26 formula, you can amass around Rs 5 crore and become a crorepati in 26 years.