Rs 6,000 Monthly SIP: Is Becoming A 'Lakhpati' In Two Years Possible?

Wealth accumulation is a consistent process and it requires financial discipline. It’s a common myth that you need a large amount to start your investment journey. However, you can build a sizable corpus even by investing small amounts regularly with strategic planning, patience and smart money management. For investors looking forward to building wealth, systematic investment plans (SIPs) could be a suitable option.

A systematic investment plan allows an investor to invest small amounts periodically, generally every month, to reach a financial milestone. For many investors, especially beginners, reaching the milestone of Rs 1 lakh could be a significant achievement.

Building a corpus of more than Rs 1 lakh with a modest investment of Rs 6,000 per month may seem a tough task, but it is achievable. For any average investor, a disciplined approach and consistency can lead to remarkable results. You can accumulate a sizable fund over the years by investing a small amount every month in SIPs.

Reaching the target of Rs 1 lakh faster is crucial for your financial security. Achieving the lakhpati goal in the short term could bolster your investment habit. Generally, equity SIPs offer higher returns over a long-term horizon. However, you can easily reach the Rs 1 lakh target even in a shorter duration of two years through consistent investments in SIPs.  

As per industry trends, SIPs have offered average returns of 8-10% per annum over a short-term horizon of two years.

Assuming an average annual return of 10%, let’s see how a monthly SIP of Rs 6,000 for two years could be helpful in accumulating Rs 1 lakh.  

• Monthly Investment: Rs 6,000

• Investment duration: 2 years

• Expected rate of return: 10% per annum

• Invested amount: Rs 1.44 lakh  

• Estimated returns: Rs 16,003

• Total value: Rs 1.6 lakh

As seen from the above calculation, you can easily surpass the target of Rs 1 lakh in two years even with a modest investment of Rs 6,000 per month. The monthly SIP will turn into a corpus of Rs 1.6 lakh in two years at an estimated return of 10% per annum.

In the given scenario, you can become a lakhpati through SIP investments in even a shorter tenure of just 14 months. However, if you have an investment horizon of two years, you can achieve your Rs 1 lakh target with a smaller amount of Rs 4,000 at the assumed returns of 10% per annum.

Let’s see the calculation:

• Monthly Investment: Rs 4,000

• Investment duration: 2 years

• Expected rate of return: 10% per annum

• Invested amount: Rs 96,000  

• Estimated returns: Rs 10,669

• Total value: Rs 1.06 lakh

So, the shortest duration to realise your lakhpati goal through a monthly SIP of Rs 6,000 is a little over one year. You can also achieve the financial milestone even with a smaller amount of Rs 4,000 per month in two years. 

To conclude, it’s not difficult to become a lakhpati with modest investments. It’s advisable to evaluate all risk factors and your financial position before investing in SIPs, as the returns are not guaranteed.