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 strategy among Indians in recent years. With the introduction of SIPs, investing in mutual funds has become more accessible and convenient. SIPs allow investors to invest a fixed amount of money at regular intervals, which helps to reduce the impact of market volatility and increase the potential returns.
In this blog post, we will explore the power of SIPs and calculate how much a person can earn with a monthly investment of ₹5,000 in 10, 20, and 30 years.
10-year SIP
According to SEBI’s SIP calculator, if a person invests ₹5,000 monthly in a SIP at an annual return of 15%, they can expect to earn ₹13.76 lakh in 10 years. The total investment value for these 10 years would be ₹6 lakh. This means that the investor would have earned a staggering 128% return on their investment.
Here’s a breakdown of the calculation:
- Monthly investment: ₹5,000
- Annual return: 15%
- Tenure: 10 years
- Total investment value: ₹6 lakh
- Returns: ₹13.76 lakh
20-year SIP
If the same investor continues to invest ₹5,000 monthly for 20 years, they can expect to earn a whopping ₹74.86 lakh. The total investment value for these 20 years would be ₹12 lakh. This means that the investor would have earned a staggering 524% return on their investment.
Here’s a breakdown of the calculation:
- Monthly investment: ₹5,000
- Annual return: 15%
- Tenure: 20 years
- Total investment value: ₹12 lakh
- Returns: ₹74.86 lakh
30-year SIP
If the investor continues to invest ₹5,000 monthly for 30 years, they can expect to earn a staggering ₹3.46 crore. The total investment value for these 30 years would be ₹18 lakh. This means that the investor would have earned a staggering 1,819% return on their investment.
Here’s a breakdown of the calculation:
- Monthly investment: ₹5,000
- Annual return: 15%
- Tenure: 30 years
- Total investment value: ₹18 lakh
- Returns: ₹3.46 crore
Conclusion
As the calculations above demonstrate, starting a SIP with a monthly investment of ₹5,000 can lead to significant returns over the long term. With an annual return of 15%, an investor can earn ₹13.76 lakh in 10 years, ₹74.86 lakh in 20 years, and a staggering ₹3.46 crore in 30 years.
It’s essential to note that these calculations are based on historical data and past performance is not a guarantee of future results. However, they do provide a glimpse into the potential power of SIPs.
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