At 12% Expected Annualised Return, How Soon Can Monthly SIPs Build Rs 5 Crore Corpus Leveraging the Magic of Compounding?
At 12% Expected Annualised Return, How Soon Can Monthly SIPs Build Rs 5 Crore Corpus Leveraging the Magic of Compounding?
Consistent SIPs can turn small monthly investments into a sizeable corpus over time, leveraging the magic of compounding.
The power of compounding is a financial game-changer that can turn small, consistent investments into substantial wealth over time. By starting a Systematic Investment Plan (SIP), individuals can achieve long-term financial goals like building a retirement corpus, funding children’s education, or purchasing a dream home.
Through disciplined monthly investments of Rs 8,000, Rs 9,000, or Rs 10,000 at an expected annualized return of 12%, one can grow their wealth to an impressive Rs 5 crore over time. Let’s explore how this is achievable and why compounding is a powerful tool for wealth creation.
Benefits of SIP and Compounding
- Disciplined Savings: SIP encourages a habit of regular investing, crucial for long-term financial stability.
- Small Investments, Big Returns: Even modest monthly contributions can grow exponentially over time.
- Flexibility: SIPs are adaptable, allowing investors to increase or decrease contributions as needed.
- Minimal Impact on Budget: SIPs enable systematic savings without financial strain.
- Impact of Compounding: By reinvesting returns, compounding accelerates wealth growth over the years.
How Long to Achieve a Rs 5 Crore Corpus?
- Rs 8,000 Monthly SIP
- Time Required: ~35 years
- Investment Amount: Rs 33,60,000
- Capital Gains: Rs 4,86,02,153
- Total Corpus: Rs 5,19,62,153
- Rs 9,000 Monthly SIP
- Time Required: ~34 years
- Investment Amount: Rs 36,72,000
- Capital Gains: Rs 4,81,03,685
- Total Corpus: Rs 5,17,75,685
- Rs 10,000 Monthly SIP
- Time Required: ~33 years
- Investment Amount: Rs 39,60,000
- Capital Gains: Rs 4,69,79,981
- Total Corpus: Rs 5,09,39,981
Why Start Early?
- More Time, Greater Growth: Starting early allows compounding to work its magic over an extended period.
- Higher Returns with Lower Investments: The longer the investment horizon, the less one needs to save monthly to achieve the same goal.
- Reduced Financial Pressure: Early investments mean achieving targets without last-minute financial strain.
Achieving a Rs 5 crore corpus with disciplined SIP investments is not just a dream but a practical financial goal, thanks to the power of compounding. Whether you can spare Rs 8,000, Rs 9,000, or Rs 10,000 per month, starting early ensures that your investments have ample time to grow and compound.
