Power of SIP: A Systematic Investment Plan (SIP) is a disciplined, automated method for investing fixed amounts into mutual funds at regular intervals (daily, weekly, monthly, or quarterly), starting as low as Rs 100. SIPs offer the benefit of rupee cost averaging, mitigating market volatility, and leveraging the power of compounding to build long-term wealth without timing the market. It is also convenient as you can give your bank standing instructions to debit the amount every month.
Now, let’s understand with the help of calculations which would generate a higher corpus: a Rs 11000 monthly investment for 20 years or a Rs 30,000 monthly investment for 10 years.
Power of SIP: Rs 11000 monthly investment for 20 years
Power of SIP: How much can Rs 11,000 monthly SIP build in 10 years?
In 10 years, the investment amount will be Rs 13,20,000, the estimated return in 10 years could be Rs 12,35,730, and the estimated corpus in 10 years could be Rs 25,55,730.
Power of SIP: How much can Rs 11,000 monthly SIP build in 20 years?
In 20 years, the investment amount will be Rs 26,40,000, the estimated return in 20 years could be Rs 83,50,627, and the estimated corpus in 20 years could be Rs 1,09,90,627.
Power of SIP: Rs 30000 monthly investment for 10 years
Power of SIP: How much can Rs 30,000 monthly SIP build in 10 years?
In 10 years, the investment amount will be Rs 36,00,000, the estimated return in 10 years could be Rs 33,70,172, and the estimated corpus in 10 years could be Rs 69,70,172.
Rs 11k monthly investment for 20 years vs Rs 30k monthly investment for 10 years
Thus, it is quite clear from the above calculations that Rs 15,000 monthly investment for 20 years was able to generate a higher corpus than Rs 40,000 monthly investment for 10 years.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
