Power of Rs 6,000 SIP: How many years can it take to generate Rs 5,00,00,000 corpus with just Rs 6,000 monthly investment?

SIP is a method of investing in mutual funds wherein an investor chooses a mutual fund scheme and invests a fixed amount of their choice at fixed intervals.

SIP is great for beginners. Once you apply for one or more SIP plans, the amount is automatically debited from your bank account and invested in the mutual funds you have purchased at the predetermined time interval.

There is no suitable time frame within which an investor should start a SIP investment plan; the sooner the better.

To get maximum returns from investment in the long run, one should start investing early. Let’s understand it through an example.

Anjali starts investing Rs 1,000 per month at age 20. After 40 years, she gets an estimated Rs 98 lakh, assuming a 12 per cent annualised return.

Her Husband starts investing Rs 1,000 per month at age 30. After 30 years, he gets Rs 30 lakh.

Anjali started 10 years earlier and got 3 times more returns.

Target corpus: Rs 5 crore Monthly investment: Rs 6,000 Annualised return: 12 per cent

It will take approximately 39 years to generate Rs 5 crore corpus.

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. 

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.

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.

The investment amount will be Rs 28,08,000, the capital gains will be Rs 4,95,86,488, and the estimated retirement corpus will be Rs 5,23,94,488.