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 popular way to build wealth over time. SIPs allow investors to invest a fixed amount of money at regular intervals, regardless of the market conditions. The power of compounding and the consistency of SIPs can lead to significant returns over the long term. In this blog post, we will explore how much a person can earn by investing ₹5,000 monthly in a SIP for 10, 20, and 30 years.
According to SEBI’s SIP calculator, if a person invests ₹5,000 monthly in a SIP at an annual return of 15%, they can expect to earn significant returns. Here are the calculations for 10, 20, and 30 years:
10 years
- Monthly investment: ₹5,000
- Annual return: 15%
- Total investment: ₹6,00,000 (₹5,000 x 12 months x 10 years)
- Return: ₹13,76,000
- Simple interest: ₹7,76,000
- Compound interest: ₹6,00,000 (total investment)
In 10 years, the investor can expect to earn a return of ₹13.76 lakh, with a total investment value of ₹6 lakh. This means that the investor will earn a return of 229% of their total investment.
20 years
- Monthly investment: ₹5,000
- Annual return: 15%
- Total investment: ₹12,00,000 (₹5,000 x 12 months x 20 years)
- Return: ₹74,86,000
- Simple interest: ₹62,86,000
- Compound interest: ₹12,00,000 (total investment)
In 20 years, the investor can expect to earn a return of ₹74.86 lakh, with a total investment value of ₹12 lakh. This means that the investor will earn a return of 624% of their total investment.
30 years
- Monthly investment: ₹5,000
- Annual return: 15%
- Total investment: ₹18,00,000 (₹5,000 x 12 months x 30 years)
- Return: ₹3,46,00,000
- Simple interest: ₹2,28,00,000
- Compound interest: ₹18,00,000 (total investment)
In 30 years, the investor can expect to earn a return of ₹3.46 crore, with a total investment value of ₹18 lakh. This means that the investor will earn a return of 19,200% of their total investment.
As we can see from the calculations, the power of compounding and consistency of SIPs can lead to significant returns over the long term. Even with a monthly investment of ₹5,000, an investor can expect to earn substantial returns in 10, 20, and 30 years.
It’s also important to note that these calculations are based on an annual return of 15%, which is a reasonable assumption for the long term. However, actual returns may vary based on market conditions and other factors.
Conclusion
Investing in a SIP is a great way to build wealth over time. By investing ₹5,000 monthly in a SIP at an annual return of 15%, a person can expect to earn significant returns in 10, 20, and 30 years. The power of compounding and consistency of SIPs can lead to substantial returns, even with a relatively small monthly investment.
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