How A Rs 3,000 SIP Can Help You Build A Rs 60 Lakh Corpus Faster Than You Think
Investing in small amounts may seem insignificant, but when done consistently over a long period, it can generate substantial wealth. This is the magic of the Systematic Investment Plan (SIP) combined with the power of compounding . Whether you aim to secure your retirement or fulfil long-term financial goals, starting early can make a huge difference in the final corpus. Here’s a closer look at how starting SIP investments early can help you build a significant corpus, even with a modest monthly contribution.
Understanding SIP Investments
A Systematic Investment Plan (SIP) is a disciplined way of investing a fixed amount regularly in mutual funds . SIP allows you to invest in different types of mutual funds such as equity, debt, or hybrid, depending on your risk appetite. The main advantage of SIP is rupee cost averaging, which helps in averaging out the cost of investment over time, and compounding, which accelerates the growth of your money as the returns generate further earnings.Why Early Investment Matters
One of the key benefits of SIP is the power of compounding. When you start investing early, the returns on your investments also start generating returns, leading to exponential growth over time. For instance, if you begin your SIP journey with just Rs 3,000 per month at the age of 25, the amount you accumulate by the time you turn 45 would be significantly higher compared to someone who starts at 35. The difference lies in the additional years of compounding that your investment enjoys.How a Rs 3,000 Monthly SIP Grows Over Time
Starting with a modest sum of Rs 3,000 per month, you can accumulate substantial wealth over the years:In 10 Years
After 10 years of consistent investment at an estimated 12% annual return, your total contribution of Rs 3,60,000 could grow to approximately Rs 6,72,108, including capital gains.In 20 Years
If you continue for 20 years, your investment of Rs 7,20,000 could multiply to about Rs 27,59,572, thanks to the compounding effect.In 25 Years
At the 25-year mark, your regular monthly SIP of Rs 3,000 could accumulate to Rs 51,06,620, turning your total investment of Rs 9,00,000 into a considerable sum.In 27 Years
Extending the SIP for two more years could help you reach a corpus of around Rs 64,86,939, demonstrating how just a small increase in the duration can significantly boost your wealth.Why SIP is Ideal for Beginners
SIP is particularly suited for beginners due to its low entry requirement—you can start with as little as Rs 100 per month. The automated nature of SIP ensures discipline in investments, allowing you to build a strong financial habit without the stress of market timing.The secret to building a large corpus through SIP is starting early and staying consistent. The longer you stay invested, the more your money grows, and with disciplined contributions, you can secure your financial future with ease.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult with a financial expert before making any investment decisions. According to experts, early investments with SIP can significantly increase your wealth over time.