From ₹15,000 SIP To ₹9 Crore: Unlocking The Power Of Compounding
For many individuals relying on monthly paycheques, the idea of amassing a ₹9 crore corpus for retirement may seem like an ambitious dream. However, with discipline, time, and the magic of compounding, this dream can become a reality. A structured approach to investing through a monthly Systematic Investment Plan ( SIP ) can yield astonishing results over time, provided you stay consistent and start as early as possible.
Here’s how a ₹15,000 monthly SIP can help you achieve this goal depending on different rates of return and timeframes.
How Compounding Works for Your SIP Investments
The principle of compounding works by reinvesting returns to generate additional earnings over time. In simpler terms, your money earns returns, and those returns, in turn, earn more returns. To harness this potential, investors must give their investments sufficient time to grow.
If you’re aiming for a ₹9 crore corpus, starting early and maintaining consistent investments are key. Depending on the annualised return, it could take anywhere from 29 to 35 years for a ₹15,000 SIP to hit this target.
Years Required to Build ₹9 Crore Corpus at 12% Annualised Return
At a steady 12% return, it will take approximately 35 years to achieve the ₹9 crore goal. Over this period
- Total Investment: ₹63,00,000
- Capital Gains: ₹9,11,29,036
- Total Corpus: ₹9,74,29,036
Shorter Timeframes at Higher Returns
As the annualised return increases, the time needed to hit the ₹9 crore target decreases.
- Time to Target: 33 years
- Total Investment: ₹59,40,000
- Capital Gains: ₹9,24,56,220
- Total Corpus: ₹9,83,96,220
- Time to Target: 31 years
- Total Investment: ₹55,80,000
- Capital Gains: ₹9,04,18,615
- Total Corpus: ₹9,59,98,615
- Time to Target: 29 years
- Total Investment: ₹52,20,000
- Capital Gains: ₹8,51,97,044
- Total Corpus: ₹9,04,17,044
If you wish to make the most of compounding, starting early is crucial. However, if you’ve delayed your investment journey, don’t worry. The alternative is to compensate for the lost time by increasing your monthly investment. Either way, consistency and discipline are paramount.
For instance, a higher monthly SIP can help you reach the ₹9 crore goal faster, even if you start later. By staying committed, you can achieve financial independence and enjoy a secure retirement.
Why Compounding is a Game-Changer
The magic of compounding lies in its ability to turn small, consistent contributions into a massive corpus. With every year you invest, the returns compound further, exponentially increasing your total wealth.
As demonstrated, even modest monthly investments like ₹15,000 can grow into a significant retirement fund, provided you let time and compounding do their work.
Final Takeaway
While the ₹9 crore corpus may seem ambitious, the power of compounding makes it achievable with a systematic approach. Starting early, staying consistent, and aiming for higher returns through quality investments are key to hitting your retirement goals.
(Disclaimer: This article is for informational purposes only and not financial advice. Please consult a financial expert for personalised guidance)
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