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?
Turning a small monthly investment of Rs 6,000 into a massive corpus of Rs 5,00,00,000 corpus may seem like a distant dream, but it's achievable with a consistent and disciplined investment strategy. With the power of compounding, your wealth can grow over time. Let’s understand how you can generate this sizeable corpus through a Systematic Investment Plan (SIP) by investing just Rs 6,000 monthly.
A systematic investment plan (SIP) is a process through which you can invest in mutual funds regularly. Depending on your preference, you can invest a fixed amount daily, weekly, monthly, quarterly, or yearly. With consistency and a disciplined investment plan, you can build a sizeable corpus of Rs 5 crore with just a Rs 6,000 monthly investment. On that account, let’s find out how many years it will take to generate this corpus target and what the estimated retirement corpus would be.
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What is Systematic Investment Plan?
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.
How does SIP work?
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.
When to invest in SIP?
There is no suitable time frame within which an investor should start a SIP investment plan; the sooner the better.
What are benefits of 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
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.
SIP calculations
Target corpus: Rs 5 crore
Monthly investment: Rs 6,000
Annualised return: 12 per cent
How long will it take to build Rs 5 crore corpus with Rs 6,000 monthly SIP?
It will take approximately 39 years to generate Rs 5 crore corpus.
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 39 years?
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.