Chhattisgarh16 min ago
Power of Rs 18,000 SIP: Can one generate Rs 21 crore, with just Rs 18,000 monthly investment?
- Written by Anamika Singh
Published: Zee Business| Updated: Zee Business
Ever wondered if investing Rs 18,000 every month can help you build a huge retirement corpus of Rs 21 crore? It might sound like a dream, but with the right approach, it’s this dream may come true. In this article, we will learn how a steady Systematic Investment Plan (SIP) can grow in the long run with the help of the power of compounding. We will understand it through calculations that will help you find out how long it could take to reach your goal.
Photos source: Pixabay/Representational
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
1/10
What is systematic investment plan (SIP)?
1/10SIP is a method of investing a fixed amount in mutual funds. Investors can invest daily, weekly, monthly, quarterly, or yearly, depending on their choice.
2/10
Why choose SIP?
2/10SIP is beginner-friendly, by investing even a small amount 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.
3/10
Why should one start investing early?
3/10To get maximum returns from investment in the long run one should start investing early. Let’s understand it through an example.
4/10
Start early
4/10Investor A: Starts investing ₹5,000/month at age 25 and continues till age 45 (20 years). Total Investment: ₹12,00,000 Maturity Amount (at 12% annual return): ₹50,00,000
Investor B: Starts investing ₹5,000/month at age 35 and continues till age 55 (20 years). Total Investment: ₹12,00,000 Maturity Amount (at 12% annual return): ₹28,00,000
By starting 10 years earlier, Investor A earns ₹22,00,000 more, showcasing the power of compounding.
5/10
SIP calculations
5/10Target corpus: Rs 21 crore Monthly investment: Rs 18,000 Annualised return: 12 per cent
6/10
How long it will take to create a corpus of Rs 21 crore
6/10It will approximately take 40 years to generate Rs 21 crore.
7/10
How much can Rs 18,000 monthly SIP build in 10 years?
7/10The investment amount will be Rs 21,60,000, the capital gains will be Rs 20,22,103, and the estimated retirement corpus will be Rs 41,82,103.
8/10
How much can Rs 18,000 monthly SIP build in 20 years?
8/10The investment amount will be Rs 43,20,000, the capital gains will be Rs 1,36,64,663, and the estimated retirement corpus will be Rs 1,79,84,663.
9/10
How much can Rs 18,000 monthly SIP build in 30 years?
9/10The investment amount will be Rs 64,80,000, the capital gains will be Rs 5,70,58,448, and the estimated retirement corpus will be Rs 6,35,38,448.
10/10
How much can Rs 18,000 monthly SIP build in 40 years?
10/10The investment amount will be Rs 86,40,000, the capital gains will be Rs 20,52,43,564, and the estimated retirement corpus will be Rs 21,38,83,564.
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