Step 1: Understanding the Basics
To raise Rs 8 crore from a monthly SIP of Rs 6,000, there are a few factors to consider: how much time you are willing to invest, and what returns you can expect on your investment. Let’s understand this in simple terms.
Step 2: Assumptions for This Calculation
- MONTHLY SIP: Rs 6,000
- TARGET AMOUNT: Rs 8,000
- EXPECTED RETURN: Historically, equity mutual funds tend to return around 12% per annum on average. We will use this as a benchmark (which is roughly 1% per month).
Step 3: Estimating How Long It Will Take
Here’s the rough calculation:
- MONTHLY SIP: 6,000
- ANNUAL RETURN: 12% (or 1% per month)
- TARGET AMOUNT: 8 crore
When you calculate this, it turns out that, with Rs 6,000 invested monthly at a 12% annual return, it would take roughly 35–40 years to reach Rs 8 crore.
Step 4: The Power of Compounding
While 35–40 years may seem like a long time, the magic of compounding kicks in as your money grows over time. The longer you stay invested, the more powerful your returns will become.
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