The Harsh Truth: Rs 6,000 SIP Won’t Always Lead to Rs 1 Crore

Assuming a long-term CAGR (Compounded Annual Growth Rate) of 15%, a monthly SIP of Rs 6,000 over 20 years can indeed grow to approximately Rs 1 crore. This is mathematically accurate and theoretically feasible, especially in high-performing equity mutual funds.

Navin Jain, Cofounder & CEO, NeoNest Finserve says, however, 15% annualized return is optimistic, not guaranteed. A more conservative and historically reliable expectation is 10-12% CAGR, which would result in a corpus of around Rs 45-Rs 52 lakhs, and not Rs 1 crore.

To realistically achieve Rs 1 crore, investors should either: Step up their SIP annually to account for inflation and income growth, or Increase the base SIP to Rs 10,000-Rs 11,000/month at 12% CAGR. “Rs 6,000/month can become Rs 1 crore in 20 years – but only if equity markets deliver 15%+ CAGR. A prudent investor probably would plan for lower returns and increase the contribution over time to reach the Rs 1 crore goal with higher certainty,” commented Navin Jain.

Read more at: https://www.goodreturns.in/personal-finance/investment/is-it-true-that-a-monthly-sip-of-rs-6000-for-20-years-can-give-you-rs-1-cr-in-return-if-yes-then-h-1442163.html