Why Starting SIPs At 25 Builds Double The Wealth Compared To 30
Building wealth through mutual funds has become one of the most popular financial strategies for young and mid-career professionals. Among the different approaches, Systematic Investment Plans (SIPs) are considered highly effective for achieving financial security. Yet, the real power of SIPs lies not just in disciplined investing but in starting early. Financial experts repeatedly underline that even a small delay of a few years can drastically shrink the final corpus due to the compounding effect.
This example demonstrates that a five-year delay can cut your wealth nearly in half, showing how significant early years are for building financial stability.
These figures highlight that every year of postponement reduces the compounding window, making it harder to meet long-term financial goals such as retirement planning, children’s education, or buying a home.
A disciplined approach, combined with early action, can provide financial freedom and security in the later stages of life. Experts also suggest aligning SIPs with goals, reviewing investments regularly, and increasing contributions gradually as income grows.
The numbers make it evident that waiting to start SIPs can cost lakhs in missed wealth. The earlier an investor begins, the greater the benefit of compounding. For those still undecided, financial planners strongly advise starting with any amount today rather than waiting for the “right time”. Time, not timing, is the key to wealth creation.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to consult certified financial planners or experts before making investment decisions, as mutual fund returns are subject to market risks.
Why Early Investments Make A Big Difference
The fundamental reason behind the urgency to begin investing early lies in compounding. When you invest in mutual funds via SIPs, the returns earned during the initial years are reinvested, which in turn start generating additional returns. This creates a snowball effect where your wealth grows at an accelerating pace over time. Starting late breaks this cycle and reduces the potential growth dramatically.Comparing SIP At 25 And At 30
According to calculations based on standard mutual fund assumptions, investing ₹5,000 per month in an SIP at the age of 25 and continuing until 50 at an annualised return of 10% could build a corpus of approximately ₹51.34 lakh. On the other hand, beginning the same SIP at the age of 30 reduces the accumulated wealth to just ₹25.97 lakh. The difference, or cost of delay , is a staggering ₹25.37 lakh.This example demonstrates that a five-year delay can cut your wealth nearly in half, showing how significant early years are for building financial stability.
The Cost Of Waiting Two More Years
If the investor waits until 32 to begin the SIP, the situation worsens further. The corpus by age 50 would drop to around ₹19.23 lakh. Compared with the ₹51.34 lakh corpus possible when starting at 25, this delay results in a cost of delay of nearly ₹36.11 lakh.These figures highlight that every year of postponement reduces the compounding window, making it harder to meet long-term financial goals such as retirement planning, children’s education, or buying a home.
Lessons For Young Investors
Experts recommend that individuals entering the workforce should prioritise SIPs as soon as they start earning. Even modest contributions, when started early, can lead to significant wealth accumulation. Young investors often underestimate the long-term impact of short delays, but the examples above prove how damaging postponement can be.A disciplined approach, combined with early action, can provide financial freedom and security in the later stages of life. Experts also suggest aligning SIPs with goals, reviewing investments regularly, and increasing contributions gradually as income grows.
Why Discipline And Time Matter More Than Amount
While the size of the monthly SIP matters, experts point out that time and consistency are often more important. For instance, a smaller SIP started early often creates more wealth than a larger SIP begun years later. The discipline of sticking with the investment throughout market fluctuations is equally critical.The numbers make it evident that waiting to start SIPs can cost lakhs in missed wealth. The earlier an investor begins, the greater the benefit of compounding. For those still undecided, financial planners strongly advise starting with any amount today rather than waiting for the “right time”. Time, not timing, is the key to wealth creation.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to consult certified financial planners or experts before making investment decisions, as mutual fund returns are subject to market risks.
Next Story