The power of compounding: Planning for retirement can be daunting with rising inflation and increasing costs of living. However, by harnessing the power of compounding through a Systematic Investment Plan (SIP), it is possible to turn a modest monthly investment into a substantial retirement fund. If you start investing Rs 8,000 a month in a SIP from the age of 30, you could accumulate up to Rs 500 crore by the time you retire. Find out how this disciplined approach can help you achieve financial freedom and a secure retirement, even with a relatively small initial commitment.
Although SIPs are linked to market performance, they tend to offer better returns over the long term compared to most other investment options.
How to create a capital of 50 crores if you are 30 years old: calculation
If you are 30 years old, it means you have 30 years left until your retirement. Therefore, to accumulate a capital of Rs 50 crore, you need to start a SIP of at least Rs 8,000 per month.
For example, if you start investing in SIP at the age of 20, you will have plenty of time to build up a capital of Rs 50 crore, with a minimum amount of Rs 1,600. But since you are already 30, you need to invest more. Find out how, with complete calculations:
Suppose you invest Rs 8,000 per month in SIP for 30 years with an annualized SIP return of 15 percent. During these 30 years, you will have invested a total of Rs 28,80,000. The estimated annualized return on this investment will be Rs 5,319,8565, taking your total wealth to Rs 5,607,8565.
Amount invested: 28,80,000 rupees
Estimated performance: 5,319,8565 rupees
Total value: 5,607,8565 rupees
The power of capitalization
Investing in mutual funds through SIPs is generally less risky than buying stocks directly. With average returns of around 15 percent, SIPs tend to outperform most government schemes. Also, the power of compounding helps your money grow significantly over time, making long-term SIPs an excellent strategy for wealth creation.
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