Why Starting Your SIP Early Can Make You a Crorepati
The power of compounding is often called the 8th wonder of the world. Here's why starting just 5 years earlier can literally double your wealth.
The ₹5,000 SIP Story
Let's look at two friends: Rahul and Priya. Both earn similar salaries and both decide to invest ₹5,000 per month in an equity mutual fund that gives 12% annual returns.
The only difference? Rahul starts at age 25. Priya starts at age 30.
At Age 55 (Retirement)
Rahul (started at 25)
₹1.76 Cr
30 years of investing
Priya (started at 30)
₹94 Lakh
25 years of investing
Rahul has almost double the wealth—not because he invested more money, but because he gave his money 5 extra years to compound.
What is Compounding?
Compounding is when your returns start earning returns. In year 1, your ₹5,000 earns returns. In year 2, your original ₹5,000 AND last year's returns earn returns. This snowball effect accelerates over time.
"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."
— Albert Einstein (attributed)
The Rule of 72
Here's a simple trick: divide 72 by your expected return rate. That's roughly how many years it takes to double your money.
- →At 12% returns: 72 ÷ 12 = 6 years to double
- →At 8% returns: 72 ÷ 8 = 9 years to double
- →At 6% (FD): 72 ÷ 6 = 12 years to double
But I Don't Have ₹5,000 Right Now
Start with what you have. Even ₹500 per month is a start. The habit of investing matters more than the amount initially. You can always increase your SIP as your income grows.
📌 Key Takeaways
- ✓Start as early as possible—time is your biggest asset
- ✓Consistency beats timing—invest monthly, regardless of market conditions
- ✓Start small if needed, but start today
- ✓Let compounding work—don't withdraw early
Ready to Start Your SIP?
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