Power of Rs 3,000 SIP: How quickly can you generate Rs 60 lakh corpus with just Rs 3,000 monthly investment?
Turning Rs 3,000 into a sizeable corpus of Rs 60 lakh in a short period may sound unrealistic. But the power of compounding, a consistent and disciplined investment strategy, can make this dream come true. Even a small amount like Rs 3,000 can do wonders in the long run. Let’s find out how.
A big sum like Rs 20,000 or more can indeed do wonders in investment, but one should not underestimate the power of a small amount. It can make a big difference in the long run. An example would work best to make you understand how a small amount can make a big change—the secret lies in early investment. For example, suppose you and your friend thought of starting your investment journey through a systematic investment plan (SIP). You started your investment journey instantly at the age of 25 with Rs 5,000 as a monthly investment. You continued investing till age 45 for approximately 20 years. In return, at the end of the investment period, you would probably get an estimated Rs 12,00,000 (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 35. Now your friend is all set to invest at the age of 35 with the same amount as yours, Rs 5,000, he continued his investment till the age of 45 (10 years). Your friend would probably get an estimated Rs 11,20,179 (at 12 per cent annual return). By starting 10 years earlier, you earned Rs 34,79,108 more, showcasing the power of compounding. On that note, let’s find out how quickly you can generate a Rs 60 lakh corpus with just a Rs 3,000 monthly investment.
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DISCLAIMER: For information only, consult an advisor before investing
What is SIP?
A systematic investment plan(SIP) is a way through which you can invest a fixed amount in mutual funds (s). You can invest daily, weekly, monthly, quarterly, or yearly, depending on your choice.
What is compounding?
The power of compounding simply helps your investment generate returns not only on the amount you initially invested but also on the profits the investment makes in the long run. The longer you stay invested, the greater profit you get in the long run.
Why should you go for early investment?
One 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.
SIP calculation conditions
Target corpus: Rs 60 lakh corpus
Monthly investment: Rs 3,000
Annualised return: 12 per cent
How long will it take to generate Rs 60 lakh corpus with Rs 3,000 monthly SIP?
It will take approximately 27 years to generate over Rs 1 crore.
How much can Rs 3,000 monthly SIP build in 10 years?
The investment amount will be Rs 3,60,000, the capital gains will be Rs 3,12,108, and the estimated retirement corpus will be Rs 6,72,108.
How much can Rs 3,000 monthly SIP build in 20 years?
The investment amount will be Rs 7,20,000, the capital gains will be Rs 20,39,572, and the estimated retirement corpus will be Rs 27,59,572.
How much can Rs 3,000 monthly SIP build in 25 years?
The investment amount will be Rs 9,00,000, the capital gains will be Rs 42,06,620, and the estimated retirement corpus will be Rs 51,06,620.
How much can Rs 3,000 monthly SIP build in 27 years?
The investment amount will be Rs 9,72,000, the capital gains will be Rs 55,14,939, and the estimated retirement corpus will be Rs 64,86,939.
Why choose SIP?
SIP is beginner-friendly; you can start by investing even a small amount of Rs 100 regularly. It is also convenient, with automated deductions, you don’t have to worry about missing out on an investment. The actual retirement corpus will vary based on fund performance and market conditions.