The Indian stock market has recently experienced significant volatility, causing many investors' portfolios to fail to grow substantially, and some have faced large losses. In such conditions, most people consider SIP as the best option.
SIP is considered a way to build significant capital in the long term, as well as a source of financial support for retirement or achieving other goals. For ordinary investors, an amount of 10 million rupees can represent a large capital. However, the main question arises: how exactly can this sum be accumulated?
Investors need to understand what monthly contribution within an SIP they should make to accumulate 10 million rupees, how long this will take with a standard SIP, and how to accelerate reaching the goal using the Step-up SIP option.
A standard indicator for long-term investment in mutual funds is an average annual return of 12 percent. If an investor plans for a 20-year SIP, they will need to contribute 10 thousand rupees monthly. With an annual return of 12 percent, the total investment volume will be 24 million rupees, and the formed fund will reach 91.98574 million rupees, with investment income amounting to 67.98574 million rupees.
When choosing a 15-year SIP, it is necessary to contribute 20 thousand rupees monthly. Based on a 12 percent return, the total investment amount will be 36 million rupees, and the target fund will reach 95.18628 million rupees, with investment profit amounting to 59.18628 million rupees.
If you start with an SIP of 10 thousand rupees and increase this amount by 10 percent every year, accumulating the fund of 10 million rupees will be completed in just 13 years. Furthermore, if you start with a small SIP of 5000 rupees and increase it by 10 percent annually, the capital of ten million rupees will be collected in just 15 years and several months.