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SIP Investment for 25 years: How much wealth you can generate with Rs 18,000 monthly SIP | Know Calculation
- Written by Priya Vishwakarma
Published: Zee Business| Updated: Zee Business
SIP investment for 25 years: If you are planning to accumulate substantial funds for your future financial needs, then SIP mutual funds can be beneficial for you. Since it is a market-linked investment, it also involves risk. However, strategically planned investment in SIP mutual funds can help you build good wealth for your future. To understand this in a better way, let's take an example where you are investing Rs 18,000 every month in a SIP mutual fund for 25 years. Now, in this write-up, we will calculate how much wealth you can earn -
(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.)
1/13
What is SIP?
1/13Mutual Fund SIP is a market-linked investment strategy.
2/13
Understanding SIP
2/13It allows investors to invest a fixed amount at regular intervals.
3/13
Benefits of SIP
3/13- Disciplined investment - Rupee cost averaging - Power of compounding - Flexible Investment Amount
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What is compound interest?
4/13Compound interest is the interest you earn on interest.
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Understanding the power of compounding
5/13The power of compounding creates a snowball effect that helps your investments grow exponentially over time.
6/13
Time is the key
6/13The longer the SIP duration, the greater the compounding benefits.
7/13
Assuming an average return rate of 13%
7/13It should be noted that for all the calculations, we are assuming the average return rate of 13 per cent.
8/13
How much wealth can you generate in 25 years with an Rs 18,000 monthly SIP?
8/13According to the calculations, you will generate around Rs 3.5 crore corpus in 25 years if you invest Rs 18,000 monthly in an SIP.
9/13
Rs 3.5 crore corpus in 25 years: Calculating average investment
9/13In 25 years, you will have a total investment of Rs 54,00,000 with a monthly SIP investment of Rs 18,000.
10/13
Rs 3.5 crore corpus in 25 years: Calculating average capital gain
10/13With a monthly SIP investment of Rs 18,000, you can expect a total of Rs 3,05,36,612 (on average) as capital gains.
11/13
Return may vary in future
11/13It should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.
12/13
Rs 3.5 crore corpus in 25 years: Final Corpus Received
12/13Consequently, at the end of 25 years, including the principal investment and capital gain, you will get a total of Rs 3,59,36,612.
13/13
Full Calculation
13/13Total Investment Amount: Rs 54,00,000 Capital Gains: Rs 3,05,36,612 Total Approx. Return: Rs 3,59,36,612
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