Power of Compounding: How soon can you generate Rs 6 crore corpus with just Rs 8,000 monthly investment?
A systematic investment plan is a method of investing a fixed amount in mutual funds at regular intervals. Let’s find out how many years you can expect to generate a Rs 6 crore corpus with just a monthly investment of Rs 8,000 in a SIP.
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.
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What is SIP?
A 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.
Investment in a Systematic Investment Plan (SIP)
The 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.
Why should you invest early?
Starting early and staying consistent adds to your investments, further amplifying the benefits of compounding.
Benefits of compounding
Compounding encourages long-term financial goal planning
When you reinvest your earnings, your original investment and the accumulated returns generate additional gains
SIP calculation conditions
Target corpus: 6
Monthly investment: Rs 8,000
Annualised return: 12 per cent
What can be your corpus in 10 years with a Rs 8,000 monthly SIP?
During 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.
What can be your corpus in 20 years with Rs 8,000 monthly SIP?
The 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.
What can be your retirement corpus in 30 years with Rs 8,000 monthly SIP?
The 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.
What can be your retirement corpus in 38 years with Rs 8,000 monthly SIP?
The 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.
How long may it take to achieve your target corpus?
It may take approximately 38 years to achieve this target corpus.