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Will you be compensated this way?
Compound interest can boost returns as time goes on. You can have a mixed portfolio, which can include equity, index, ELSS and debt funds. If you plan your SIP investments very carefully, there are good chances that you can get much higher returns than the guaranteed return schemes run by the government.
At what age will you get how much return from investment?
The advantage of starting a SIP at the age of 25 is that if you want to retire at the age of 60, you get many years for the compound interest to grow. Your retirement fund target of Rs. 5 crore does not require you to invest a large amount. If you start a SIP of Rs 8,000 at the age of 25 and run it for 10 years i.e. 35 years, then your total investment will be Rs 33,60,000. As a 12 percent annual return, you get long-term capital gains on an investment of Rs. 4,86,02,153. This will make you the owner of Rs 5,19,62,153 at the age of 60. If you want to start a SIP at the age of 30, invest Rs 15,000 per month. The investment will be Rs. 54,00,000 and the long-term capital gains will be Rs. You will receive Rs. 4,75,48,707. Your investment net worth will be Rs. 5,29,48,707.
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