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 effective ways to grow your wealth over a period of time. With a consistent monthly investment, you can create a substantial corpus to achieve your long-term financial goals. But have you ever wondered how much you can earn with a monthly SIP of ₹5,000? In this blog post, we will explore the power of SIP and calculate the returns you can expect from an investment of ₹5,000 per month for 10, 20, and 30 years.
The Power of SIP
A SIP is a type of investment plan where you invest a fixed amount of money at regular intervals, usually monthly or quarterly. This plan helps you to invest in small amounts, which can be beneficial for individuals who are new to investing or have a limited budget. The beauty of SIP lies in its ability to average out market fluctuations, making it a more stable and consistent investment option.
Returns from a ₹5,000 Monthly SIP
According to SEBI’s SIP calculator, if you invest ₹5,000 per month at an annual return of 15%, you can expect the following returns:
- In 10 years, your total investment value will be ₹6 lakh, and you will earn a return of ₹13.76 lakh, making a total corpus of ₹19.76 lakh.
- In 20 years, your total investment value will be ₹12 lakh, and you will earn a return of ₹74.86 lakh, making a total corpus of ₹86.86 lakh.
- In 30 years, your total investment value will be ₹18 lakh, and you will earn a return of ₹3.46 crore, making a total corpus of ₹3.46 crore.
These returns are based on the assumption that the annual return is 15%, which is a relatively high return. However, even with a lower return, the power of SIP can still generate significant returns.
Factors Affecting SIP Returns
While SIP returns can be significant, there are several factors that can affect your returns. These include:
- Annual return: The return on your investment can vary significantly depending on the annual return. A higher return can result in higher returns, while a lower return can result in lower returns.
- Monthly investment amount: The amount you invest each month can also affect your returns. A higher monthly investment can result in higher returns, while a lower monthly investment can result in lower returns.
- Time period: The time period you invest for can also affect your returns. Longer time periods can result in higher returns, while shorter time periods can result in lower returns.
Conclusion
Investing in a SIP can be a powerful way to grow your wealth over a period of time. With a consistent monthly investment, you can create a substantial corpus to achieve your long-term financial goals. As we have seen, a ₹5,000 monthly SIP can generate significant returns over a period of 10, 20, and 30 years. However, it is essential to remember that SIP returns can be affected by several factors, including annual return, monthly investment amount, and time period.
Before investing in a SIP, it is essential to assess your financial goals, risk tolerance, and time horizon. You should also diversify your portfolio and invest in a mix of equity and debt instruments to minimize risk. With a well-planned SIP and a disciplined approach to investing, you can achieve your financial goals and create a secure financial future.
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Note: The article is based on the SEBI’s SIP calculator and assumes an annual return of 15%. The actual returns may vary based on the performance of the investment and other market factors.
