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Rs500 SIP: In today’s time, when it comes to starting investment, many people feel that investing a small amount will not bring much benefit. But it is not necessary. If only every month ₹500 If invested regularly and continued for a long time, even this small start can help in building a good fund due to compounding.

Suppose the goal of an investor is only ₹2 lakh Have to prepare a fund. The time taken to achieve this goal with a monthly SIP of ₹500 will depend on the returns. Based on different estimated returns, it may take about 10 to 13 years to reach this target.

First understand the complete mathematics of SIP of ₹500.

If you invest ₹ 500 every month, then in one year your pocket will be ₹6,000 Will go. This amount will increase in five years ₹30,000 And your total investment in ten years ₹60,000 Will be done. After this, compounding and returns on investment play a role in growing the fund.

This is the reason why it is not enough to just see how much amount is being invested every month in SIP. For how many years is the investment to be continued?this is equally important.

Assuming 12% annual return, when will it become ₹2 lakh?

Now let’s take an example. If on average monthly SIP of ₹500 12% annual return Assuming this, then approximately 13 years 5 months Funds are estimated to be around ₹2 lakh. During this period, approximately ₹80,500 Will be deposited. The remaining amount can be added to the estimated returns.

That is, the advantage of investing small amounts for a long time is that as the investment period increases, the returns also get a chance to be reinvested.

If there is 15% return then the target will be achieved soon.

If for the same SIP of ₹500 the average 15% annual return If we believe, then the target of ₹ 2 lakh is close to 12 years Estimated to be completed in. Total investment during this period is approximately ₹72,000 and the estimated fund may be a little more than ₹ 2 lakh.

But here it is important to understand that expecting higher returns does not mean that the investor will get the same return every year. The performance of mutual funds depends on market movements.

According to 18% return only 10 years 10 months

Now if in the calculation 18% annual return Assuming a monthly SIP of ₹500, the target of ₹2 lakh would be around 10 years 10 months It is estimated that it will be achieved. During this period investors ₹65,000 Will apply from your side.

This figure may look attractive, but it would not be right to consider 18% return as a fixed or fixed return. Actual returns may vary significantly due to market fluctuations.

Starting from ₹500, you can increase sip later (Rs500 SIP)

If your income is low now, it does not mean that you should not start investing. Starting with ₹500, the SIP amount can be increased later as the income increases. For example, after some time increasing ₹500 ₹1,000 or ₹2,000 per month Can be done.

By increasing the monthly investment, the corpus created in the long run can naturally become bigger. Many investors adopt this strategy with their increasing income.

Why does starting early matter in investing?

The most important thing in SIP is not just the amount but time and regularity Is. Continuing to invest for a longer period gives compounding more time to work. Therefore, for a person, even starting with ₹500 can be the first step towards a bigger goal in the future.

However, this does not mean that every SIP investment will definitely yield profits. Investment performance depends on the scheme chosen and market conditions.

Should SIP be stopped when the market falls?

There are both declines and rises in the stock market. Before panicking and deciding to stop SIP just because the market is falling, you should look at your investment objective and time frame. If the investment is for a long-term goal, then it is important to understand the market fluctuations from that perspective.

Also, to avoid breaking the investment midway in case of sudden financial need, emergency fund It may also be useful to keep.