How much will a person earn with ₹5,000 monthly SIP in 10, 20 & 30 years?
Systematic Investment Plans (SIPs) have become a popular investment option for individuals looking to grow their wealth over time. With a SIP, one can invest a fixed amount of money at regular intervals, which helps in averaging out the market fluctuations and reducing the risk of investing in the stock market. The power of compounding is what makes SIPs so effective in generating returns over the long term.
In this blog post, we will explore how much a person can earn by investing ₹5,000 monthly in a SIP at a rate of 15% per annum for 10, 20, and 30 years. We will also examine the total investment value and the returns one can expect from such an investment.
According to SEBI’s SIP calculator, a person investing ₹5,000 monthly in a SIP at 15% per annum will earn a significant amount of money over the long term. In 10 years, the same investment will give a return of ₹13.76 lakh, with a total investment value of ₹6 lakh.
This means that the investor will have earned a total of ₹7.76 lakh in 10 years, which is a decent return on investment. The power of compounding is evident in this example, as the investor’s returns grow exponentially over time.
In 20 years, the same investment will give a return of ₹74.86 lakh, with a total investment value of ₹12 lakh. This is a significant increase from the 10-year return, highlighting the importance of long-term investing.
In 30 years, the investment would fetch a staggering ₹3.46 crore, which is a remarkable return on investment. The total investment value in this case would be ₹18 lakh.
It’s important to note that these returns are based on an assumption of 15% per annum returns, which may not be guaranteed in reality. However, even with a lower rate of return, SIPs can still generate significant returns over the long term.
The key takeaways from this example are:
- The power of compounding is significant, and even small monthly investments can add up to a substantial amount over the long term.
- Investing for the long term is essential to generate significant returns, as the returns grow exponentially over time.
- A monthly SIP of ₹5,000 can be a good starting point for individuals looking to start their investment journey, especially for those who are new to investing.
In conclusion, the example above highlights the importance of starting early and investing regularly to achieve long-term financial goals. With a monthly SIP of ₹5,000, one can expect significant returns over the long term, depending on the rate of return. Whether it’s 10, 20, or 30 years, the power of compounding ensures that even small monthly investments can add up to a substantial amount over time.
