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. With a SIP, you invest a fixed amount of money at regular intervals, which helps to reduce the impact of market volatility and timing risks. The power of compounding can work wonders for your investments, especially if you start early and invest consistently.
In this blog post, we will explore how much a person can earn with a ₹5,000 monthly SIP in 10, 20, and 30 years. We will also discuss the total investment value and the returns you can expect from such an investment.
10-year SIP
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. The total investment value in this period will be ₹6 lakh, which means you will have invested a total of ₹72,000 (6 lakh * 12) and earned a return of ₹13.76 lakh.
This means that your investment will have grown by 264 times the original investment value, which is an impressive return. The power of compounding is evident here, as the returns generated in the first few years are reinvested, leading to a significant increase in the overall return.
20-year SIP
For a 20-year SIP, the same investment of ₹5,000 per month at 15% per annum will give you a return of ₹74.86 lakh. The total investment value in this period will be ₹12 lakh, which means you will have invested a total of ₹288,000 (12 lakh * 12) and earned a return of ₹74.86 lakh.
In this case, your investment will have grown by 1,495 times the original investment value, which is an even more impressive return. The longer time period allows the power of compounding to work even more effectively, leading to a significant increase in the overall return.
30-year SIP
For a 30-year SIP, the same investment of ₹5,000 per month at 15% per annum will fetch a return of ₹3.46 crore. The total investment value in this period will be ₹12 lakh, which means you will have invested a total of ₹432,000 (12 lakh 12 30/12) and earned a return of ₹3.46 crore.
In this case, your investment will have grown by 6,920 times the original investment value, which is an incredibly impressive return. The longer time period and the power of compounding work together to generate a staggering return.
Conclusion
As the examples above demonstrate, a monthly SIP of ₹5,000 can generate significant returns over time. The power of compounding is a powerful force that can help your investments grow exponentially over time.
In conclusion, if you start a SIP of ₹5,000 per month at 15% per annum, you can expect to earn:
- ₹13.76 lakh in 10 years
- ₹74.86 lakh in 20 years
- ₹3.46 crore in 30 years
These returns are based on the assumption that the returns remain constant at 15% per annum, which is not possible in reality. However, this gives you an idea of the potential returns you can expect from such an investment.
News Source
This article is based on a news article published on Financial Express, titled “Start ₹5000 SIP and retire with ₹3.5 crore: Know how many years it takes to reach your goal”. You can read the original article here: https://www.financialexpress.com/money/start-rs-5000-sip-and-retire-with-rs-3-5-crore-know-how-many-years-it-takes-to-reach-your-goal-3913498/lite/.
