How much will a person earn with ₹5,000 monthly SIP in 10, 20 & 30 years?
Investing in a systematic investment plan (SIP) is a great way to build wealth over time. With a consistent investment strategy and a decent returns, you can grow your corpus significantly. In this blog post, we will explore how much a person can earn by investing ₹5,000 monthly in a SIP at 15% per annum for 10, 20, and 30 years.
According to SEBI’s SIP calculator, if you invest ₹5,000 monthly in a SIP at 15% per annum, you will earn ₹13.76 lakh in 10 years, with a total investment value of ₹6 lakh. This means that your investment will grow by 2.28 times in just 10 years.
But what if you invest for a longer period? In 20 years, the same investment will give you a return of ₹74.86 lakh, with a total investment value of ₹12 lakh. That’s a growth of 4.91 times your initial investment. And if you invest for 30 years, your investment would fetch ₹3.46 crore, which is a growth of 6.92 times your initial investment.
These numbers are staggering, and they highlight the power of compounding in building wealth over time. As you can see, the longer you invest, the more your returns grow. This is because compounding allows your returns to earn returns, resulting in exponential growth.
So, how does this work? Let’s break it down. When you invest ₹5,000 monthly in a SIP, the interest earned on your investment is added to the principal amount. This means that the next month, you’ll be earning interest on the total amount, including the interest earned earlier. This process is repeated every month, resulting in exponential growth.
Another important factor that contributes to the growth of your investment is the power of rupee cost averaging. When you invest a fixed amount regularly, you are buying more units of the investment when the market is low and fewer units when the market is high. This averages out the cost of your investment, reducing the impact of market volatility on your returns.
Now, let’s consider some real-life scenarios. For example, if you start investing ₹5,000 monthly at the age of 25, and continue to do so until you retire at 60, you will have invested ₹12 lakh (₹5,000/month x 12 years). But, as we saw earlier, your total corpus will be ₹74.86 lakh, which is a significant amount that can provide a comfortable retirement.
Similarly, if you start investing ₹5,000 monthly at the age of 35, and continue to do so until you retire at 65, you will have invested ₹24 lakh (₹5,000/month x 10 years). But, your total corpus will be ₹3.46 crore, which is a substantial amount that can provide a luxurious retirement.
To achieve these goals, it’s essential to start investing early and consistently. Even small investments can add up over time, provided you are disciplined and patient. Additionally, it’s crucial to choose the right investment products and asset allocation to ensure that your investments are aligned with your financial goals and risk tolerance.
In conclusion, investing ₹5,000 monthly in a SIP at 15% per annum can lead to significant returns over time. With a total investment value of ₹6 lakh, ₹12 lakh, and ₹24 lakh in 10, 20, and 30 years, respectively, this investment strategy can help you achieve your long-term financial goals. So, start investing early, be consistent, and patient, and you can retire with a significant corpus.
