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Power of Rs 18,000 SIP: Can one generate Rs 17 crore corpus with just Rs 18,000 monthly investment?
- Written by Anamika Singh
Published: Zee Business| Updated: Zee Business
Building a Rs 17 crore retirement fund by investing just Rs 18,000 monthly may seem like a dream, but it may be achievable with a smart investment strategy. This article will explore how long it may take to turn Rs 18,000 monthly investments into a Rs 17 crore corpus by investing in a Systematic Investment Plan (SIP), benefiting from the power of compounding. We will also deal with calculations to find the estimated retirement fund in different years.
Photo source: Pixabay/Representational
1/8
What is SIP?
1/8A systematic investment plan is a method of investing a fixed amount in mutual funds. Investors can invest daily, weekly, monthly, quarterly, or yearly, depending on their choice.
2/8
Why invest early?
2/8To get maximum returns from investment in the long run, one can start investing early. Let’s understand it through an example. 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 per cent annual return): Rs 50,00,000
Investor B: Starts investing Rs 5,000/month at age 35 and continues till age 45 (10 years). Total Investment: Rs 6,00,000 Maturity Amount (at 12 per cent annual return): Rs 11,20,179
By starting 10 years earlier, Investor A may earn an estimated Rs 38,79,821 more, showcasing the power of compounding.
3/8
SIP calculations
3/8Target corpus: Rs 17 crore Monthly investment: Rs 18,000 Annualised return: 12 per cent
4/8
How soon can you build a corpus of Rs 17 crore?
4/8It will approximately take 40 years to generate Rs 17 crore.
5/8
How much can Rs 18,000 monthly SIP build in 10 years?
5/8The investment amount will be Rs 21,60,000, the capital gains will be Rs 18,72,646, and the estimated retirement corpus will be Rs 40,32,646.
6/8
How much can Rs 18,000 monthly SIP build in 20 years?
6/8The investment amount will be Rs 43,20,000, the capital gains will be Rs 1,22,37,432, and the estimated retirement corpus will be Rs 1,65,57,432.
7/8
How much can Rs 18,000 monthly SIP build in 30 years?
7/8The investment amount will be Rs 64,80,000, the capital gains will be Rs 4,89,77,518, and the estimated retirement corpus will be Rs 5,54,57,518.
8/8
How much can Rs 18,000 monthly SIP build in 40 years?
8/8The investment amount will be Rs 86,40,000, the capital gains will be Rs 16,76,35,278, and the estimated retirement corpus will be Rs 17,62,75,278.
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