How much will a person earn with ₹5,000 monthly SIP in 10, 20 & 30 years?
When it comes to creating a secure financial future, investing in a Systematic Investment Plan (SIP) is an excellent strategy. SIPs are a type of investment plan that involves investing a fixed amount of money at regular intervals, typically monthly, in a mutual fund or a stock. With a SIP, you can take advantage of the power of rupee-cost averaging, which helps to reduce the impact of market volatility on your investments.
In this blog post, we’ll explore the potential returns of a monthly SIP of ₹5,000 at an assumed rate of return of 15% per annum. We’ll also examine the total investment value and the returns you can expect in 10, 20, and 30 years, as per SEBI’s SIP calculator.
10-year SIP:
According to SEBI’s SIP calculator, a person investing ₹5,000 monthly in a SIP at 15% per annum will earn ₹13.76 lakh in 10 years. The total investment value in this period would be ₹6 lakh, which means you would have invested a total of ₹6 lakh and earned a return of ₹7.76 lakh.
The power of compounding is evident in this example. The ₹5,000 monthly investment may seem like a modest amount, but it can still generate significant returns over a period of 10 years. This is due to the effect of compounding, which helps to accelerate your returns over time.
20-year SIP:
Fast-forward to 20 years, and the same investment of ₹5,000 monthly at 15% per annum would yield returns of ₹74.86 lakh. The total investment value in this period would be ₹12 lakh, which means you would have invested a total of ₹12 lakh and earned a return of ₹62.86 lakh.
As you can see, the returns from a 20-year SIP are significantly higher than those from a 10-year SIP. This is because the power of compounding has a greater impact over a longer period of time.
30-year SIP:
Now, let’s take a look at the returns from a 30-year SIP. With the same investment of ₹5,000 monthly at 15% per annum, the returns would be a staggering ₹3.46 crore. The total investment value in this period would be ₹18 lakh, which means you would have invested a total of ₹18 lakh and earned a return of ₹3.28 crore.
The 30-year SIP example is a powerful illustration of the importance of starting your investment journey early. Even with a modest investment of ₹5,000 monthly, you can generate significant returns over a long period of time.
Conclusion:
In conclusion, the potential returns from a monthly SIP of ₹5,000 at an assumed rate of return of 15% per annum are significant. Whether you’re investing for the short, medium, or long term, a SIP can help you achieve your financial goals.
As you can see from the examples above, the power of compounding is a powerful force that can help your investments grow over time. By starting your investment journey early and investing regularly, you can generate significant returns and achieve your financial goals.
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