Planning for a secure financial future often comes down to discipline and smart use of compounding. Financial experts say that a small but consistent investment can grow into a substantial corpus if given
enough time, and a Rs 7,000 monthly Systematic Investment Plan (SIP) in equity mutual funds is a clear example.
If an investor commits Rs 7,000 every month to a SIP and earns an assumed annual return of 12%, a figure based on historical performance of equity mutual funds, they could amass Rs 1 crore in about 22 years.
The Numbers Behind Rs 1 Crore
- Monthly SIP: Rs 7,000
- Investment Period: 22 years
- Total Invested: Rs 18.48 lakh
- Estimated Returns: Rs 81.52 lakh
- Total Corpus: Rs 1 crore
The secret lies in compounding, often described as “interest on interest”. As your returns begin generating their own returns, growth accelerates, particularly over longer investment horizons. Starting early amplifies this effect. For instance, beginning at 25 could get you to Rs 1 crore by age 47, while starting at 35 would push the milestone to age 57.
Increasing the monthly SIP can reduce the timeline significantly:
- Rs 10,000 per month: 17 years to Rs 1 crore
- Rs 15,000 per month: 12 years to Rs 1 crore
While these projections are encouraging, market volatility means actual results may vary. Financial planners recommend diversifying investments across asset classes and reviewing portfolios periodically to stay aligned with evolving goals and market conditions.
Disclaimer: Mutual fund investments are subject to market risks, and past performance is not indicative of future results. This information is for educational purposes only. Investors should consult a certified financial advisor before making decisions.
