Power of Rs 6,000 SIP: How can you generate over Rs 5 crore corpus with just Rs 6,000 monthly investment?
Have you ever thought that you may be able to build more than Rs 5 crore with just a Rs 6,000 monthly investment? I guess not. We simply think that such a small amount, like Rs 2,000 to Rs 6,000, can hardly give us a huge corpus in return. And we delay our investment, thinking that once we start saving a large sum, like above Rs 10,000, then we will start investing. But to your surprise, even a small amount can make a big difference. Let's find out how.
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We were discussing how a small investment of Rs 6,000 can help you build a massive corpus of over Rs 5 crore. Let's understand what factors play a major role in generating such a huge corpus. First of all, here we are talking about investing Rs 6,000 monthly in a Systematic Investment Plan (SIP). As you go through this article, you will get a better understanding of what a SIP is. Well, the power of compounding is another factor that plays an important role in growing your money in the long run. You just have to be consistent with your investments. Thus, let's understand how a small investment of Rs 6,000 per month can turn into a massive corpus of Rs 5 crore. Let's find out how.
What is SIP?
A systematic investment plan is an investment scheme where investors can invest a fixed amount in mutual funds. Investors can invest daily, weekly, monthly, quarterly, or yearly, depending on their choice.
Why opt for SIP?
SIP is beginner-friendly, by investing even a small of Rs 100 regularly, first-time investors can start their journey toward building a sizeable corpus. It is also convenient, with automated deductions you don’t have to worry about missing out on investment.
Why should you start investing early?
To get maximum returns from investment in the long run one should start investing early. Let’s understand it through an example.
Example of early investment
Investor A: Starts investing Rs 5,000/month at age 25 and continues till age 45 (20 years).
Total Investment: Rs 12,00,000
Maturity Amount (at 12% annual return): Rs 50,00,000
Investor B: Starts investing Rs 5,000/month at age 35 and continues till age 55 (20 years).
Total Investment: Rs 12,00,000
Maturity Amount (at 12% annual return): Rs 28,00,000
By starting 10 years earlier, Investor A earns ₹22,00,000 more, showcasing the power of compounding.
SIP calculations
- Target corpus: Rs 5 crore
- Monthly investment: Rs 6,000
- Annualised return: 12 per cent
How long it will take to build over Rs 5 crore with Rs 6,000 monthly SIP
It will take approximately 40 years to generate over Rs 5 crore.
How much can Rs 6,000 monthly SIP build in 10 years?
The investment amount will be Rs 7,20,000, the capital gains will be Rs 6,24,215, and the estimated retirement corpus will be Rs 13,44,215.
How much can Rs 6,000 monthly SIP build in 20 years?
The investment amount will be Rs 14,40,000, the capital gains will be Rs 40,79,144, and the estimated retirement corpus will be Rs 55,19,144.
How much can Rs 6,000 monthly SIP build in 30 years?
The investment amount will be Rs 21,60,000, the capital gains will be Rs 1,63,25,839, and the estimated retirement corpus will be Rs 1,84,85,839.
How much can Rs 6,000 monthly SIP build in 40 years?
The investment amount will be Rs 28,80,000, the capital gains will be Rs 5,58,78,426, and the estimated retirement corpus will be Rs 5,87,58,426.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
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12:34 PM IST
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