SIP Investment: How to build a corpus of ₹5 crore with a monthly investment of ₹2,000?

Systematic Investment Plans (SIPs) have become a popular investment method these days. Through SIPs, investors can aim to build a large corpus by investing small amounts regularly. This method is especially beneficial for those who cannot afford a large lump sum investment. But, is it really possible to build a corpus of ₹5 crore with a monthly SIP of just ₹2,000? The answer is yes! This goal can be achieved with the help of long-term investing and the power of compounding.

The Outstanding Performance of Nippon India Growth Mid Cap Fund

Nippon India’s Growth Mid Cap Fund is a prime example of this. This fund has delivered an impressive compound annual growth rate (CAGR) of 22 percent to its investors over the past nearly 30 years. These impressive returns have turned even small monthly investments into funds worth crores over time. This Nippon India fund, launched on October 8, 1995, demonstrates the power of long-term investing.

₹2,000 monthly SIP to create a corpus of ₹5.17 crore: Calculation

Let’s look at the math behind building a corpus of ₹5 crore. Nippon India Growth Mid Cap Fund has delivered annualized returns of approximately 22.44 percent to its investors over the past 30 years.

SIP Calculation:

Monthly SIP: ₹2,000

Investment Period: 30 years

Total Invested Amount: ₹2,000 x 12 months x 30 years = ₹7,20,000

Annualized Return Rate: 22.44%

Estimated Fund Value after 30 years: Approximately ₹5.17 crore

This calculation clearly shows that if a person had started a monthly SIP of ₹2,000 from the inception of this fund, they would have a corpus of over ₹5 crore today.

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The Wonders of Compounding in Long-Term Investments

This incredible return reflects the effect of compounding (compound interest) on long-term investments. With compounding, you not only earn returns on your original investment amount, but also on your returns, allowing your capital to grow exponentially over time. By maintaining high annual returns (22.44%) over a long period, a small investment amount of ₹7.20 lakh can grow into a massive corpus of ₹5.17 crore.

Key Takeaways:

Start early: It’s important to start investing early to take advantage of compounding in SIPs.

Invest for the long term: A large goal like ₹5 crore requires a long investment horizon of 20-30 years.

Maintain consistency: It’s important to continue your monthly SIPs despite market fluctuations.

Disclaimer: (The information provided here is for informational purposes only. It is important to note that investing in the market is subject to market risks. Always seek expert advice before investing as an investor. Betultoday.com never recommends investing here.)