Power of Rs 10000 SIP: What will you get in 15, 25 and, 35 years on Rs 10,000 monthly investment?
A systematic investment plan (SIP) is a method of investing in mutual funds where a fixed amount is contributed at regular intervals— daily, weekly, monthly, quarterly, half-yearly and yearly.
A Systematic Investment Plan (SIP) is a popular way to invest in mutual funds, letting individuals gradually invest in equity-linked schemes. It helps investors stay on track with their financial goals while making the most of compounding. Over time, compounding helps you grow wealth by generating returns on both initial investment and earnings. The longer the investment period, the bigger compounding effect, which often leads to likely higher returns.
In this write up, we’ll look at how much Rs 10,000 monthly SIP could generate over 15, 25, and 35 years.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is SIP?
A systematic investment plan (SIP) is a method of investing in mutual funds where a fixed amount is contributed at regular intervals— daily, weekly, monthly, quarterly, half-yearly and yearly. It offers flexibility, allowing investors to adjust their contributions to their earning cycle.
What are mutual funds?
Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other assets, managed by professional fund managers.
Power of compounding
Compounding enables returns to generate additional earnings over time. In SIPs, returns are reinvested, helping the investment grow exponentially as each cycle builds on previous gains.
How SIP works
An SIP functions like a recurring deposit, where a fixed amount is auto-debited from your bank and invested in a mutual fund scheme. The number of units allotted depends on the net asset value (NAV) on the investment day. Investors buy more units when prices are low and fewer when prices are high, averaging out the cost over time.
Benefits of SIP investment
- Disciplined investing: Encourages regular contributions, fostering financial consistency
- Cost efficiency:Enables participation with small investments, making mutual funds accessible
- Compounding growth: Generates returns on both principal and accumulated gains over time
- Flexibility: Investors can start, pause, or modify contributions as per financial goals
- Diversification: Provides exposure to a mix of securities, reducing risk
SIP vs lump sum
SIP is a method of investing in mutual funds at regular intervals, whereas lump sum is a one-time investment. SIP helps mitigate market fluctuations, while lump sum investments depend on market timing.
When to start SIP?
- Early start: Beginning in your 20s or 30s maximises compounding benefits
- Stable income: Ensuring a steady income allows consistent contributions without financial strain
How much can can get in 15 years on monthly investment of Rs 10000?
With a monthly investment of Rs 10,000 over 15 years at an expected annualised return rate of 12 per cent, the invested amount would be Rs 18,00,000. The estimated capital gains will be Rs 32,45,760, bringing the total value of the investment to approximately Rs 50,45,760.
How much you can get in 25 years on monthly investment of Rs 10000?
With a monthly investment of Rs 10,000 over 25 years at an expected annualised return rate of 12 per cent, the invested amount would be Rs 30,00,000. The estimated capital gains could be Rs 1,59,76,351, bringing the total value of the investment to approximately Rs 1,89,76,351.
How much you can get in 35 years on monthly investment of Rs 10000?
With an annualised expected return rate of 12 per cent, the invested amount would be Rs 42,00,000. The estimated capital gains could be Rs 6,07,52,691, bringing the total value of investment to approximately Rs 6,49,52,691.