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Power of Compounding: How soon can you generate Rs 6 crore corpus with just Rs 8,000 monthly investment?
- Written by Anamika Singh
Published: Zee Business| Updated: Zee Business
Some of us believe that only a large amount is worth the investment that might push our habit of savings, which would eventually lead to delaying meeting our short-term or long-term goals. Let’s understand it simply; some of us may have convinced ourselves that investing a small amount in SIP won’t do any better, so we focus on a large sum for better results. This thought process may delay your planning to start saving, eventually leading to nowhere.
Even a small amount can make a big difference, just like the proverb goes, "drop by drop, the pitcher fills." If you start investing early, one day you may end up with a sizeable amount, and this habit of early investment may only be possible when you inculcate a habit of saving at an early age. On that note, we will walk you through the article to help you understand how soon you can expect to generate Rs 6 crore corpus by investing just Rs 8,000 a month in SIP. See calculations below.
Photo source: Pixabay/Representational
1/10
What is SIP?
1/10A systematic investment plan is a way to invest a fixed amount in a mutual fund scheme at regular intervals. You can change the investment amount according to your financial circumstances.
2/10
Investment in a Systematic Investment Plan (SIP)
2/10The investment in SIP can be done according to the choice of the investor’s investment capacity, for instance, daily, weekly, monthly, quarterly, half-yearly, or yearly.
3/10
Why should you invest early?
3/10Starting early and staying consistent adds to your investments, further amplifying the benefits of compounding.
4/10
Benefits of compounding
4/10Compounding encourages long-term financial goal planning When you reinvest your earnings, your original investment and the accumulated returns generate additional gains
5/10
SIP calculation conditions
5/10Target corpus: 6 Monthly investment: Rs 8,000 Annualised return: 12 per cent
6/10
What can be your corpus in 10 years with a Rs 8,000 monthly SIP?
6/10During that time, the invested amount will be Rs 9,60,000, and the estimated capital gains will be Rs 8,32,287. The estimated retirement corpus will be Rs 17,92,287.
7/10
What can be your corpus in 20 years with Rs 8,000 monthly SIP?
7/10The invested amount will be Rs 19,20,000, and the estimated capital gains will be Rs 54,38,859. The estimated retirement corpus will be Rs 73,58,859.
8/10
What can be your retirement corpus in 30 years with Rs 8,000 monthly SIP?
8/10The invested amount will be Rs 28,80,000, and the estimated capital gains will be Rs 2,17,67,786. The estimated retirement corpus will be Rs 2,46,47,786.
9/10
What can be your retirement corpus in 38 years with Rs 8,000 monthly SIP?
9/10The invested amount will be Rs 36,48,000, and the estimated capital gains will be Rs 5,86,35,202. The estimated retirement corpus will be Rs 6,22,83,202.
10/10
How long may it take to achieve your target corpus?
10/10It may take approximately 38 years to achieve this target corpus.
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