Do you want to invest Rs 5000 per month ? Start a SIP in Equity Mutual Funds. Over the next 5 to 20 years you can create significant wealth.
Here is how much your money can grow at the rate of ~12% per annum if you invest Rs 5000 per month.
- After year 5, you can have: Rs 4.3 lakhs
- After year 8. you can have: Rs 8.3 lakhs
If you continue doing this, you can have the following amounts in:
- Year 10: Rs 12 lakhs
- Year 15: Rs 25 lakhs
- Year 20: Rs 48 lakhs
- Year 25: Rs 90 lakhs
- Year 30: Rs 1.6 CRORES
- Year 35: Rs 2.9 CRORES
Imagine if you are a 25 year old who starts investing Rs 5000 and continue to do it till you retire at the age of 60 – Your small saving per month can grow from Rs 21 lakhs (5000 x 12 months x 35 years = Rs 21 lakhs) to Rs 2.9 crores.
That’s the magic of compounding and investing in the Equity asset class on a regular basis.
Note: The 12% return is a conservative assumption as Equity as an asset class has given a return of 16 – 17% per annum over the last few decades. However, there is no guarantee that it will grow at such rates hence the 12% assumption.