Biocon8 min ago
Power of Rs 6,000 SIP: How quickly can you generate Rs 70,00,000 corpus with just Rs 6,000 monthly investment?
- Written by Anamika Singh
Published: Zee Business| Updated: Zee Business
A large investment amount like Rs 15,000 or more can indeed do wonders during the investment period, but one should not underestimate the power of a small amount. Even a small investment can make a big difference over time. An example would work best to make you understand how a small amount can make a big change—the secret lies in starting early. For example, suppose you and your friend planned to invest via a SIP (Systematic Investment Plan). You started your investment journey instantly at the age of 20 with Rs 4,000 as a monthly investment. You continued investing till age 40 for approximately 20 years. In return, at the end of the investment period, you can expect to get an estimated Rs 36,00,000 (at 12 per cent annual return).
On the other hand, your friend decided not to invest instantly as you did, and he decided to wait until he turned 30. Now your friend is all set to invest at the age of 30 with the same amount as yours, Rs 4,000, he continued his investment till the age of 40 (10 years). Your friend may get an estimated Rs 9,00,000 (at 12 per cent annual return). By starting 10 years earlier, you earned Rs 27,00,000 more, showcasing the power of compounding. On that note, let’s find out how quickly you can generate a Rs 70 lakh corpus with just Rs 6,000 monthly investment through SIP.
Photo source: Pixabay/Representational
1/10
What is SIP?
1/10A systematic investment plan(SIP) is a method through which you can invest a fixed amount in mutual fund(s). You can invest daily, weekly, monthly, quarterly, or yearly, depending on your choice.
2/10
What is compounding?
2/10The power of compounding simply helps your investment generate returns not only on the principal amount but also on the accumulated returns over time. The longer you stay invested, the greater profit you get in the long run.
3/10
Why should you go for early investment?
3/10One should start investing early to get maximum returns from investments in the long run. Check out the example given above in the introduction part to understand why investing early is worthwhile.
4/10
Are SIPs similar to mutual funds?
4/10People often confuse SIP with either mutual funds or something other than a mutual fund. The fact is that SIP is just a style of investment and not a fund/scheme or a stock/investment avenue. It is an investment vehicle to invest periodically in a fund/scheme of your choice.
5/10
SIP calculation conditions
5/10Target corpus: Rs 70 lakh corpus Monthly investment: Rs 6,000 Annualised return: 12 per cent
6/10
How soon can you generate Rs 70 lakh corpus with Rs 6,000 monthly SIP?
6/10It will take approximately 22 years to generate Rs 70 lakh corpus.
7/10
How much can Rs 6,000 monthly SIP build in 10 years?
7/10The investment amount will be Rs 7,20,000, the capital gains will be Rs 6,24,215, and the estimated corpus will be Rs 13,44,215.
8/10
How much can Rs 6,000 monthly SIP build in 15 years?
8/10The investment amount will be Rs 10,80,000, the capital gains will be Rs 17,75,588, and the estimated retirement corpus will be Rs 28,55,588.
9/10
How much can Rs 6,000 monthly SIP build in 20 years?
9/10The 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.
10/10
How much can Rs 6,000 monthly SIP build in 22 years?
10/10The investment amount will be Rs 15,84,000, the capital gains will be Rs 55,01,604, and the estimated retirement corpus will be Rs 70,85,604.
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