How much will a person earn with ₹5,000 monthly SIP in 10, 20 & 30 years?
When it comes to saving and investing, starting early and consistently is key. Systematic Investment Plans (SIPs) are a popular investment option for many as they allow individuals to invest a fixed amount of money at regular intervals, usually monthly, in a mutual fund scheme. But how much can one expect to earn with a monthly SIP of ₹5,000? In this blog post, we’ll explore the returns one can expect from a ₹5,000 monthly SIP over 10, 20, and 30 years.
According to SEBI’s SIP calculator, a person investing ₹5,000 monthly in a SIP at a rate of 15% per annum would earn ₹13.76 lakh in 10 years, with a total investment value of ₹6 lakh. This means that the investor would have earned a return of ₹7.76 lakh, which is approximately 128% of the total investment made.
Now, let’s take a look at what the same investment would yield in 20 years. In this scenario, the investor would earn a whopping ₹74.86 lakh, with a total investment value of ₹12 lakh. This means that the investor would have earned a return of ₹62.86 lakh, which is approximately 523% of the total investment made.
But if we fast-forward to 30 years, the returns are even more staggering. With a monthly SIP of ₹5,000, the investor would earn an impressive ₹3.46 crore, with a total investment value of ₹24 lakh. This means that the investor would have earned a return of ₹3.22 crore, which is approximately 13,400% of the total investment made.
As seen from the above examples, the power of compounding is evident. The longer the investment period, the higher the returns. This is because compounding allows the investment to grow exponentially over time, resulting in significant returns.
But what’s the catch? Well, there are a few factors to consider before starting a SIP. For one, the investment returns are based on the assumption of a consistent rate of return over the investment period. In reality, market conditions can be volatile, and returns may vary. Additionally, there may be fees and charges associated with the SIP, which can eat into the returns.
So, how can one ensure that their SIP investments yield the desired returns? Here are a few tips:
- Start early: The earlier you start your SIP, the more time your money has to grow. Even small, consistent investments can add up over time.
- Be consistent: Consistency is key when it comes to SIPs. Try to invest the same amount regularly, without fail, to maximize your returns.
- Choose the right fund: Select a fund that aligns with your investment goals and risk tolerance. It’s also important to consider the fees and charges associated with the fund.
- Monitor and adjust: Keep an eye on your SIP investments and adjust your strategy as needed. If the market is volatile, consider rebalancing your portfolio to ensure that it remains aligned with your investment goals.
In conclusion, a ₹5,000 monthly SIP can yield significant returns over time, provided that it is started early and consistently. With a rate of return of 15% per annum, the investment would earn ₹13.76 lakh in 10 years, ₹74.86 lakh in 20 years, and ₹3.46 crore in 30 years. While there are no guarantees in investing, following the tips outlined above can help ensure that your SIP investments yield the desired returns.
