SIP Calculator: Building wealth doesn’t require a massive initial investment. With consistent effort and the power of compounding, even a small amount invested regularly can lead to significant wealth creation. This article explores how Systematic Investment Plans (SIPs) can help you achieve your financial goals, using a monthly investment of just Rs 2,000.
How Much Can You Earn with SIPs?
The table below shows the potential future value of your investments based on a 15% expected annual return.
| Duration | SIP Amount (₹) | Future Value (₹) |
|---|---|---|
| 5 years | 2,000 | 1.8 Lakhs |
| 10 years | 2,000 | 5.6 Lakhs |
| 15 years | 2,000 | 13.5 Lakhs |
| 25 years | 2,000 | 65.7 Lakhs |
The table illustrates the potential future value of a Systematic Investment Plan (SIP) with a monthly investment of Rs. 2,000 and an expected annual return of 15%.
Here’s a breakdown of the future value for each year:
- 5 years: After 5 years of consistent monthly investments of Rs. 2,000, your investment has the potential to grow to approximately Rs. 1.8 lakhs.
- 10 years: By continuing the SIP for 10 years, the future value could reach around Rs. 5.6 lakhs.
- 15 years: With 15 years of disciplined investing, the potential future value increases significantly to Rs. 13.5 lakhs.
- 25 years: The power of compounding truly shines over long investment horizons. If you stay invested for 25 years, the potential future value could reach a substantial amount of Rs. 65.7 lakhs.
Comparing SIPs with Other Investment Options:
While SIPs offer the potential for high returns, it’s important to compare them with other investment options:
- Fixed Deposits (FDs): FDs offer guaranteed returns, but they typically have lower interest rates compared to SIPs in the long run.
- Post Office Schemes: Similar to FDs, post office schemes offer guaranteed returns, but their potential growth might be lower than SIPs.
- National Pension System (NPS): NPS is a long-term retirement savings scheme with tax benefits. However, the investment options are limited, and the lock-in period is longer compared to SIPs.
Important Considerations
- Expected Return: The 15% annual return used in the example is an estimate, and past performance is not indicative of future results.
- Market Volatility: SIPs are subject to market fluctuations, meaning your investment value may go down in the short term. However, staying invested for the long term helps average out these fluctuations.
- Investment Horizon: The longer you invest, the greater the potential benefits of compounding.
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)