₹20,000 SIP for 10 years: what it becomes

What does ₹20,000 a month become in 10 years?

At an illustrative 12% a year, a ₹20,000 SIP for 10 years grows to about ₹44,80,718. You put in ₹24,00,000. At 10% it is ₹40,29,152, and at 8% it is ₹36,25,664.

Is it enough for ₹1 crore?

Not in 10 years. At 12% you would be about ₹55,19,282 short. To reach ₹1 crore in 10 years you need about ₹44,700 a month at 12%. A flat ₹20,000 takes 15 years 5 months at 12% and 16 years 10 months at 10%.

Three ways to close the gap

1. Raise it every year. Start at ₹20,000 and raise it 10% a year. At 12% you reach ₹1 crore in 12 years 3 months.
2. Add a lump sum. With ₹5,00,000 invested on day one, ₹20,000 a month ends at about ₹60,33,642 after 10 years.
3. Give it a few more years. At 12%, ₹20,000 a month needs about 15 years 5 months.

What if the market gives less?

If you plan at 12% and get 8%, your ₹20,000 SIP ends at ₹36,25,664 instead of ₹44,80,718. That is ₹8,55,054 less. Ten years is not long, so a plan with only 10 years has little cushion. Use the 10% case as your main number.

Year by year

Here is the balance of a ₹20,000 SIP at 12%, one year at a time.

The balance in year 10 is ₹44,80,718. Of that, ₹20,80,718 is growth. Growth in the last year alone (₹4,68,050) is far bigger than growth in the first year (₹15,330).

Who this amount suits

A ₹20,000 SIP is often a good fit when your take home is ₹80,000 or more, your fixed costs are covered and your emergency fund is in place. If your take home is much lower, it may be too tight to keep, and a smaller SIP with a yearly raise is better than a big one you cancel.

If you have more than one goal

Most people have more than one goal in the next 10 years, like a home deposit or a wedding. Money for a goal that is 3 years away should not sit in equity. A common approach is to give each goal its own SIP and its own time frame. Keep the long goal, like your first crore, separate from the short ones.

After year 10

At the end of 10 years, you do not have to stop. At 12%, ₹20,000 a month reaches ₹1 crore in 15 years 5 months, which is about five years after year 10. If you keep going, the second crore arrives much faster. See why the first crore is the hardest.

How to use ₹20,000 well

• Put it on auto, a day after payday.
• Keep 6 months of expenses as a cushion outside the SIP.
• Raise it when you get a raise.
• Do not stop in a market fall.

See how to become a crorepati in 10 years for the full 10 year picture, and the calculator to test your own numbers.