SIP has been gaining popularity among Indian Mutual fund investors, as it helps in Rupee Cost Averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market. If you are wondering what “Rupee Cost Averaging” is, let’s briefly understand it.
Rupee Cost Averaging (RCA) is a method where you invest a fixed amount of money at regular intervals, despite of the current market price of the investment. By investing consistently, you buy more units when prices are low and fewer units when prices are high, which can lead to a lower average cost per unit over time. Simply put, buying low and selling high. Perhaps it is the best way to get good returns on your investments. On that note, let’s find out how quickly you can generate Rs 13 crore corpus with Rs 15,000 monthly investment in an SIP.
What is a Systematic Investment Plan (SIP)?
SIP is a way to invest in mutual funds. It allows investors to invest a fixed amount in mutual funds. You can invest daily, weekly, monthly, quarterly, or yearly, depending on your choice.
How does SIP work?
A Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly. You can set up a SIP with a mutual fund company, instructing them to deduct a specified amount from your bank account at regular intervals, such as monthly, and invest it in your chosen mutual fund scheme. This approach helps you invest disciplined way and build wealth over time.
What is compounding?
Compounding helps your investment generate returns not only on the principal investment amount but also on the accumulated returns. The secret to benefiting from compounding is to start early and stay consistent with your investment.
Why should you invest early?
To get maximum returns from investment in the long run, one should start investing early.
SIP calculation conditions
- Target corpus: Rs 13 crore corpus
- Monthly investment: Rs 15,000
- Annualised return: 12 per cent
How much can Rs 15,000 monthly SIP build in 10 years?
The investment amount will be Rs 18,00,000, the capital gains will be Rs 15,60,538, and the estimated retirement corpus will be Rs 33,60,538.
How much can Rs 15,000 monthly SIP build in 20 years?
The investment amount will be Rs 36,00,000, the capital gains will be Rs 1,01,97,860, and the estimated retirement corpus will be Rs 1,37,97,860.
How much can Rs 15,000 monthly SIP build in 30 years?
The investment amount will be Rs 54,00,000, the capital gains will be Rs 4,08,14,598, and the estimated retirement corpus will be Rs 4,62,14,598.
How much can Rs 15,000 monthly SIP build in 39 years?
The investment amount will be Rs 70,20,000, the capital gains will be Rs 12,39,66,221, and the estimated retirement corpus will be Rs 13,09,86,221.
How quickly can you build over Rs 12 crore with Rs 15,000 monthly SIP?
It will take approximately 39 years to build Rs 13 crore with Rs 15,000 monthly investment in an SIP.
