Daily savings may seem like a small thing. Rs 100 a day may not look like much at first. But over time, it can add up to a meaningful corpus. You simply need to be consistent and disciplined. For long-term wealth creation, systematic mutual funds are one of the popular investment vehicles. They are flexible and allow you to invest as per your budget and convenience.
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Many mutual fund houses offer options to invest in SIP both daily and monthly. You need to just start with what you can. You can stay consistent and increase your contributions as your income grows.
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Imagine investing Rs 100 into an SIP everyday. It may seem like a small amount for overtime, it can add meaningful value to your corpus.
Here's How:
Daily Rs 100 SIP for 5 Years
Daily SIP Amount: Rs 100
Time: 5 years
Returns: 12% p.a.
Total investment: Rs 1.82 lakh
Returns: Rs 67,589
Maturity: Rs 2.5 lakh
Daily Rs 100 SIP for 10 Years
Daily SIP Amount: Rs 100
Time: 10 years
Returns: 12% p.a.
Total investment: Rs 3.65 lakh
Returns: Rs 3.40 lakh
Maturity: Rs 7.05 lakh
Daily Rs 100 SIP for 15 Years
Daily SIP Amount: Rs 100
Time: 15 years
Returns: 12% p.a.
Total investment: Rs 5.47 lakh
Returns: Rs 9.88 lakh
Maturity: Rs 15.35 lakh
If average returns remain at 12%, the three scenarios show a very interesting pattern. At five years, the returns look modest and the investment value is also at just Rs 1.82 lakh. However, as time passes by, the power of compounding helps your small contributions grow significantly over time.
For instance, over 10 years, your Rs 3.65 lakh investment can return Rs 3.40 lakh interest. When the investment horizon is 15 years, your investments see a modest rise to Rs 5.47 lakh compared to 10 years. However, the returns are nearly double at almost Rs 10 lakh, taking your total corpus value to more than Rs 15 lakh.
What investors need to note is that these illustrations are based on historical returns. While SIP in mutual funds have proved as a long-term wealth creation tool in the past, their returns are never guaranteed. Investors must assess their risk appetite and financial goals before making any long-term commitments.
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