Building A Rs 25 Lakh Corpus With Rs 200 A Day — Does It Work?

Can you build a large corpus with small investments? It’s a common notion that you need a large amount to begin your wealth accumulation journey. But, with a rapidly evolving financial services landscape in India, it’s possible to accumulate wealth in the long term with consistent small investments.

You can start investing as low as Rs 100 per day through mutual fund systematic investment plans.

Several mutual fund houses are offering daily SIPs, making investment instruments more accessible and inclusive for those who lack a large sum. Daily SIPs could be suitable for investors looking for flexible and affordable investment instruments for long-term wealth accumulation.   

Daily SIPs help to minimise risks due to the advantage of rupee cost averaging. The daily cycle of investments also brings an opportunity for potentially higher returns over the years due to the power of compounding.

A daily SIP of Rs 200 can potentially yield impressive results in the long run. If you want to build a corpus of Rs 25 lakh, let’s see how investing Rs 200 daily in an SIP could help reach your financial goal.

The idea of saving Rs 200 a day, roughly the cost of a coffee and a snack, to build a Rs 25 lakh corpus may sound like a financial fairy tale. However, with the right strategy and consistency, it is possible to achieve the target in over a decade.

Saving Rs 200 a day translates to around Rs 6,000 a month. This amount is manageable for many salaried individuals, freelancers and small business owners.

Let’s see how long it will take to accumulate Rs 25 lakh with a daily SIP of Rs 200 at an assumed interest rate of 12% per annum.     

Daily investment: Rs 200 (Around Rs 6,000 per month)

Tenure: 14 years

Total investment: Rs 10.08 lakh

Expected rate of return: 12% per annum

Estimated returns: Rs 16.1 lakh

Maturity corpus: Rs 26.18 lakh

As per the above calculation, by investing just Rs 200 a day, you can cross the Rs 25 lakh mark in approximately 14 years.

With a rise in your income, you can also increase the amount of the daily SIP to reach the goal faster.

While building a corpus of Rs 25 lakh could be a major financial milestone, inflation and taxes may affect your actual returns.

Building wealth isn't about being rich, it's about financial discipline and smart money management. Investing Rs 200 a day may seem insignificant, but when invested wisely and left untouched, it can grow into a meaningful financial cushion.