How much will a person earn with ₹5,000 monthly SIP in 10, 20 & 30 years?
The power of systematic investment plans (SIPs) is well-known in the financial world. SIPs have been touted as one of the most effective ways to build wealth over the long-term. But have you ever wondered how much you can earn with a monthly SIP of just ₹5,000? In this blog post, we will explore the returns you 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 will earn a whopping ₹13.76 lakh in 10 years. But that’s not all – the total investment value would be a relatively modest ₹6 lakh. This means that the returns would be ₹7.76 lakh, or approximately 128% of the total investment.
But the magic doesn’t stop there. If you continue to invest ₹5,000 monthly for 20 years, the returns would be staggering. According to the calculator, you would earn ₹74.86 lakh, with a total investment value of ₹12 lakh. This means that the returns would be ₹62.86 lakh, or approximately 523% of the total investment.
And if you’re willing to wait even longer, the returns would be truly remarkable. With a ₹5,000 monthly SIP over 30 years, you would earn a massive ₹3.46 crore, with a total investment value of ₹60 lakh. This means that the returns would be ₹2.86 crore, or approximately 4750% of the total investment.
So, how does this work? The key to the success of SIPs is the power of compounding. When you invest a fixed amount of money at regular intervals, you take advantage of the fact that the earlier investments earn interest over a longer period of time. This means that the returns on your investments grow exponentially over time, leading to significant wealth accumulation.
But there are a few things to keep in mind when considering SIPs. Firstly, the returns are not guaranteed and are dependent on the performance of the investment. In this example, we used a rate of 15% per annum, which is a reasonable assumption for a long-term investment. However, it’s important to note that actual returns may vary.
Secondly, SIPs require discipline and patience. It’s easy to get caught up in the excitement of investing and want to see immediate results. But the truth is that SIPs are a long-game strategy, and it’s important to stick to your investment plan over the long-term.
Finally, it’s important to consider the risks involved with investing. SIPs are subject to market fluctuations, and there is always a risk that the value of your investments could decline. However, by diversifying your portfolio and investing for the long-term, you can minimize these risks and maximize your returns.
In conclusion, the power of SIPs is truly remarkable. With a monthly investment of just ₹5,000, you can earn significant returns over the long-term. Whether you’re looking to build wealth for retirement or simply want to grow your savings, SIPs are a great way to achieve your financial goals.
So, how many years does it take to reach your goal? According to the Financial Express, “if you start an SIP of ₹5,000 per month, you can retire with ₹3.5 crore, knowing how many years it takes to reach your goal.” The answer is simple – it takes time, discipline, and patience. But with the right investment strategy and a long-term perspective, the returns can be truly remarkable.
