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Power of Compounding: How much money do you need to invest in SIP/month to generate Rs 99,99,999 corpus in 15 years?
- Written by ZeeBiz WebTeam
Published: Zee Business| Updated: Zee Business
SIP for Retirement Planning: Whether you are planning to buy a house, build wealth for your retirement, accumulate wealth for child's education or marriage, monthly investments in a good investment strategy can help you achieve your goal in the long term without compromising on your daily needs. Wondering how? There are various investment strategies available in the market for long-term investments, and one of them is SIP (Systematic Investment Plan). It allows investors to invest money based on their financial capacity.
There are many advantages of SIP, such as
- Flexibility in investment
- Rupee cost averaging
- Power of compounding
Let's learn about these in detail and understand with an example how much money you need to invest in SIP every month to generate a Rs 99,99,999 retirement corpus in 15 years at an assumed rate of return of 12 per cent.
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(Disclaimer: Don't consider this as an investment advice. Do your own due diligence or consult an expert for financial planning)
1/11
Flexibility in investment
1/11SIP provides flexibility to investors so that they can increase or decrease the investment amount based on their financial capacity.
2/11
Rupee cost averaging
2/11It is an investment technique in which a person invests a fixed amount at regular intervals to eliminate the effects of market volatility over time.
3/11
Power of compounding
3/11Compounding is a process in which you earn capital gains not only on the principal but also on the accumulated capital gains from previous periods. Using the power of compounding, one can create a substantial amount over time through the snowball effect.
4/11
Assuming the annualised return rate
4/11For all calculations, we are assuming an annualised return rate of 12 per cent.
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SIP Investment Plan for 15 Years: Understand the scenario
5/11Target: Rs 99,99,999 Time: 15 years Annualised return rate: 12% (assumed) Monthly SIP investment: ?
6/11
SIP investment: Rs 99,99,999 in 15 years
6/11If the annual rate of return is 12 per cent, how much do you need to invest in SIP mutual funds every year to create a wealth of around Rs 99,99,999 in 15 years? Let's find out
7/11
How much money do you need to invest in SIP/month?
7/11According to the calculations, you will need to invest at least Rs 19,819 per month in SIP mutual funds to create a wealth of over Rs 99,99,999 in 15 years.
8/11
What will your average investment be in 15 years?
8/11In 15 years, you will invest a total of Rs 35,67,420 in SIP.
9/11
What will be your expected capital gain in 15 years?
9/11With a monthly SIP investment of Rs 19,819, your expected capital gains will be around Rs 1,00,00,192.
10/11
At the end of 15 years, what is the total amount you can receive?
10/11At the end of 15 years, including the principal investment and capital gains, you will receive a total of Rs 99,99,999.
11/11
SIP Mutual Fund Returns 12 Per cent: Full Calculation Summary
11/11Monthly Investment: Rs 19,819 Total Investment Amount: 35,67,420 Capital Gains: Rs 1,00,00,192 Total Approx. Return: Rs 99,99,999
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