How much will a person earn with ₹5,000 monthly SIP in 10, 20 & 30 years?
Investing in a Systematic Investment Plan (SIP) is one of the most popular and effective ways to build wealth over time. It allows individuals to invest a fixed amount of money at regular intervals, regardless of the market’s performance. The benefits of SIP are numerous, including rupee-cost averaging, disciplined investment, and the power of compounding.
But how much can a person earn with a ₹5,000 monthly SIP over different time periods? According to SEBI’s SIP calculator, a person investing ₹5,000 monthly in a SIP at 15% per annum will earn a substantial amount over the years.
10-year SIP
In 10 years, the same SIP of ₹5,000 monthly will give a return of ₹13.76 lakh, with a total investment value of ₹6 lakh. This means that the investment will grow by approximately 2.28 times the total amount invested. This is a significant return, considering the power of compounding and the consistent investment over a decade.
20-year SIP
Fast-forward to 20 years, and the same SIP of ₹5,000 monthly will fetch a return of ₹74.86 lakh, with a total investment value of ₹12 lakh. This represents a staggering growth of approximately 6.24 times the total amount invested. The longer time period allows the investment to benefit from the compounding effect, leading to a significantly higher return.
30-year SIP
In 30 years, the same SIP of ₹5,000 monthly will earn an impressive return of ₹3.46 crore, with a total investment value of ₹60 lakh. This represents a growth of approximately 57.6 times the total amount invested. The 30-year time period allows the investment to benefit from the compounding effect to the fullest, resulting in a massive return.
Key Takeaways
These calculations highlight the importance of starting early and being consistent with your investments. Even a small amount of ₹5,000 per month can lead to significant returns over the years. Here are some key takeaways from these calculations:
- The power of compounding: The longer the time period, the more significant the impact of compounding on the investment.
- Consistency is key: Consistently investing ₹5,000 per month over the years leads to significant returns.
- Start early: The earlier you start investing, the more time your money has to grow.
- Be patient: Investing for the long term requires patience and discipline.
Conclusion
Investing in a SIP is a great way to build wealth over time. The calculations above demonstrate the potential returns a person can earn with a ₹5,000 monthly SIP over different time periods. Whether you’re looking to retire with a significant amount or simply build a nest egg, starting early and being consistent with your investments can help you achieve your financial goals.
Reference
