Fractal Analytics6:27 PM IST
Power of Compounding: At 12% expected annualised return, how soon can Rs 11,000, Rs 13,000, Rs 15,000 monthly SIPs build Rs 7 crore corpus?
- Written by Anamika Singh
Published: Zee Business| Updated: Zee Business
Building a large corpus might seem challenging, but the power of compounding can make it simpler than you think. By investing regularly through SIPs (Systematic Investment Plans), even small amounts can grow into a sizeable corpus in the long run. For example, if you invest Rs 11,000, Rs 13,000, or Rs 15,000 monthly at annualised return of 12 per cent, you could achieve a retirement corpus of Rs 7 crore. Wondering how long it would take? The answer lies in patience and discipline. Let’s understand how these amounts, combined with compounding and SIP, can help you reach your target corpus step by step.
Photos source: Pixabay/Representational
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
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What is SIP?
1/12Systematic Investment Plan (SIP) is a process of investing in a mutual fund with a fixed amount, either daily, weekly, monthly, or yearly.
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What is power of compounding?
2/12The power of compounding is when your money earns returns, and those returns start earning returns too. For example, if you invest Rs 1,000 and it earns 10 per cent interest, you’ll have Rs 1,100 after a year. Next year, you’ll earn interest on Rs 1,100, not just Rs 1,000. The longer you stay invested, the more your money grows, making compounding one of the most powerful ways to build wealth.
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What are benefits of SIP?
3/12You can start investing with as little as Rs 100 a month. No need for a lump sum; invest small amounts regularly depending on your choice. SIP encourages regular investments and helps build a habit of saving.
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What are benefits of compounding?
4/12Just keep your investment for longer, and compounding works automatically. Even small investments can grow into a sizeable corpus in the long run. Staying invested for years gives better returns.
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Start investing early
5/12Even tiny investments can grow into large amounts in the long run, helping you achieve your financial goals. That’s why it’s important to start investing early. With SIPs, you can begin investing with as little as Rs 100 a month.
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SIP calculations
6/12Target corpus: Rs 7 crore Monthly investments: Rs 11,000, Rs 13,000, Rs 15,000 Annualised return: 12 per cent
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How long it will take to achieve Rs 7 crore corpus with Rs 11,000 monthly SIP?
7/12It will take approximately 35 years to achieve the target of Rs 7 crore retirement corpus.
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From Rs 11,000 monthly SIP to Rs 7 crore corpus at 12 per cent annualised return
8/12The investment amount will be Rs 46,20,000. The estimated capital gains will be Rs 6,68,27,960 and the estimated retirement corpus will be Rs 7,14,47,960.
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How long it will take to achieve Rs 7 crore corpus with Rs 13,000 monthly SIP?
9/12It will take approximately 34 years to achieve the target of Rs 5 crore retirement corpus.
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From Rs 13,000 monthly SIP to Rs 7 crore corpus at 12 per cent annualised return
10/12The investment amount will be Rs 53,04,000. The estimated capital gains will be Rs 6,94,83,100 and the estimated retirement corpus will be Rs 7,47,87,100.
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How long it will take to achieve Rs 7 crore corpus with Rs 15,000 monthly SIP?
11/12It will take approximately 33 years to achieve the target of Rs 5 crore retirement corpus.
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From Rs 15,000 monthly SIP to Rs 7 crore corpus at 12 per cent annualised return
12/12The investment amount will be Rs 59,40,000. The estimated capital gains will be Rs 7,04,69,971 and the estimated retirement corpus will be Rs 7,64,09,971.
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