How much will a person earn with ₹5,000 monthly SIP in 10, 20 & 30 years?
Systematic Investment Plans (SIPs) have become a popular way to invest in the stock market, with many investors opting for this route to build their wealth over time. The key to a successful SIP is consistency and patience, as it allows your money to grow steadily over the years. But how much can you expect to earn with a monthly SIP of ₹5,000? In this blog post, we’ll explore the returns you can expect from a ₹5,000 monthly SIP invested at 15% per annum over 10, 20, and 30 years.
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, with a total investment value of ₹6 lakh. This means that the returns from your investment would be ₹7.76 lakh, which is a significant amount considering the total investment is just ₹6 lakh.
But what about the longer-term benefits of a SIP? In 20 years, the same investment of ₹5,000 monthly at 15% per annum would give you a return of ₹74.86 lakh with a total investment value of ₹12 lakh. This means that the returns from your investment would be ₹62.86 lakh, which is a staggering amount considering the total investment is just ₹12 lakh.
And if you’re willing to wait for 30 years, the returns from your ₹5,000 monthly SIP at 15% per annum would be even more impressive. According to SEBI’s SIP calculator, you can expect to earn a whopping ₹3.46 crore with a total investment value of ₹18 lakh. This means that the returns from your investment would be ₹3.28 crore, which is a life-changing amount for many people.
So, how does this work? The key to a successful SIP is the power of compounding. When you invest a fixed amount regularly, the returns on your investment earn interest, which in turn earns interest, and so on. This creates a snowball effect that can help your investment grow exponentially over time.
For example, let’s say you invest ₹5,000 monthly in a SIP at 15% per annum. In the first year, your investment would grow by 15%, which would be an additional ₹750. In the second year, your investment would grow by 15% of the new total, which would be an additional ₹1,251.25. As you can see, the returns on your investment are growing faster and faster over time, which is the power of compounding at work.
But what about the risks involved in a SIP? While the returns from a SIP can be impressive, there are also risks involved, such as market volatility and the possibility of losses. However, with a long-term perspective and a well-diversified portfolio, the risks associated with a SIP can be managed.
So, how can you get started with a SIP? The process is relatively simple. You can start by selecting a mutual fund scheme that aligns with your investment goals and risk tolerance. You can then set up a monthly SIP of ₹5,000 or any other amount that you’re comfortable with. The mutual fund house will then invest your money on your behalf, and you can track your investment’s performance online.
In conclusion, a ₹5,000 monthly SIP invested at 15% per annum can be a powerful way to build your wealth over time. With SEBI’s SIP calculator, you can estimate the returns you can expect from your investment, which can help you plan your financial goals. Whether you’re looking to retire with a life-changing amount or simply build a nest egg for the future, a SIP can be a valuable tool in your financial arsenal.
