How much will a person earn with ₹5,000 monthly SIP in 10, 20 & 30 years?
Investing in a Systematic Investment Plan (SIP) is a popular way to build wealth over time. With a SIP, you invest a fixed amount of money at regular intervals, which helps to reduce the impact of market volatility and timing risks. But how much can you expect to earn with a monthly SIP investment of ₹5,000? In this post, we’ll explore the answer to this question by looking at the returns you can expect from a ₹5,000 monthly SIP over 10, 20, and 30 years.
10-year returns
According to SEBI’s SIP calculator, a person investing ₹5,000 monthly in a SIP at a rate of 15% per annum will earn ₹13.76 lakh in 10 years, with a total investment value of ₹6 lakh. This means that the returns on your investment will be approximately 2.28 times the total amount invested.
20-year returns
Fast-forward to 20 years, and the same investment will give you a return of ₹74.86 lakh, with a total investment value of ₹12 lakh. This means that your returns will be approximately 6.23 times the total amount invested.
30-year returns
Now, let’s look at the returns over a 30-year period. With the same investment of ₹5,000 per month at a rate of 15% per annum, you can expect to earn ₹3.46 crore, with a total investment value of ₹18 lakh. This means that your returns will be approximately 19.22 times the total amount invested.
Key takeaways
From these calculations, we can draw a few key takeaways:
- The power of compounding: As you can see from the returns over 20 and 30 years, the power of compounding is significant. The longer you invest, the more your returns grow.
- Consistency is key: The consistency of your monthly SIP investments is crucial to achieving these returns. It’s essential to stick to your investment plan and avoid making emotional decisions based on market fluctuations.
- Early start is important: The earlier you start your SIP, the more time your money has to grow. This is especially important if you want to achieve your long-term financial goals, such as retirement.
Why ₹5,000 monthly SIP can be a game-changer
Investing ₹5,000 monthly in a SIP can be a game-changer for several reasons:
- Convenience: With a SIP, you can invest a fixed amount of money at regular intervals, without having to worry about the timing of the market.
- Discipline: A SIP helps you invest regularly, which can be a challenge for many people who may not have the discipline to invest consistently.
- Flexibility: You can choose a SIP that suits your financial goals and risk tolerance.
- Tax benefits: SIP investments are eligible for tax benefits under Section 80C of the Income Tax Act.
Conclusion
In conclusion, a ₹5,000 monthly SIP investment can be a powerful way to build wealth over time. With a rate of return of 15% per annum, you can expect to earn significant returns over 10, 20, and 30 years. The key to achieving these returns is consistency, discipline, and an early start. By investing in a SIP, you can create a nest egg that can help you achieve your long-term financial goals.
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