Investing in Systematic Investment Plans (SIP) is frequently commended as an efficient way to reach long-term financial objectives. With an ambitious objective of Rs 10 crore by the age of 60 and an estimated annual return of 12%, it is critical to understand how the monthly SIP amount required varies based on the age at which you begin saving.
Starting early is a tried-and-true investment technique. If you start investing in a SIP when you are 25, your monthly contribution is only Rs 15,000. According to FundsIndia Research Report, if you invest this amount every month for 35 years with an average annual return of 12%, your SIP investment will finally accrue Rs 10 crore by the time you reach the age of 60. This highlights the power of compounding and the tremendous advantage you have by entering the investment world early.
However, the monthly SIP installment to accomplish the same goal increases with each year you delay entering the investment scene. If you delay starting the SIP until the age of 30, the monthly investment requirement rises to Rs 28,000, about twice the amount required if you start at 25. This sudden increase demonstrates how time is important in the investment world, with those who start early reaping a large profit.
Those who wait until the age of 40 have bleak prospects. The monthly SIP requirement increases to Rs. 1 lakh. This is six times what would have been required if you had started at 25. Starting a decade later requires six times the monthly commitment to achieve the same Rs 10 crore goal.