Let's take a hypothetical example to illustrate this better.
Suppose you want to invest in an SIP for a duration of 5 years with an expected return of
12% per annum. Now, let's compare the maturity amount for different
investment amounts, say 500 Rs., 1000 Rs., and 2000 Rs. per month.
Scenario 1: 500 Rs per month
In this scenario, you decide to invest 500 Rs per month in an SIP for a period of 5 years.
The SIP calculator takes into account the monthly investment amount,
the expected rate of return of 12%, and the investment tenure to calculate the maturity amount.
After 5 years of disciplined investing with a 12% annual return, your maturity amount will be 41,243 Rs.
This means that your initial investment of 500 Rs per month has grown significantly due to the power of compounding.
Scenario 2: 1000 Rs per month
Now, let's consider a higher investment amount of 200 Rs per month for the
same 5-year period with a 12% expected return.
With a monthly investment of 1000 Rs over 5 years and a 12% annual return,
your maturity amount will be 82,486 Rs. By increasing your monthly investment,
you've given your money more room to grow, resulting in a larger
maturity amount compared to Scenario 1.
Scenario 3: 2000 Rs per month
In this scenario, you decide to take a more aggressive approach and invest
2000 Rs per month in the SIP for 5 years, also with a 12% expected return.
With a substantial monthly investment of 2000 and a 12% annual return, your maturity amount will be 1,64,973 Rs.
By increasing your investment even further, you've set the stage for significant growth in your
wealth over the 5-year period.
As we can see, the maturity amounts increase as the investment amount increases.
This demonstrates the power of consistent and higher investments over time.
However, it's essential to consider
your financial capacity and risk tolerance when deciding on the monthly investment amount.
While a higher investment can potentially yield greater returns,
it's crucial to strike a balance that aligns with your financial goals and overall financial plan.
In lastly, the SIP calculator empowers you to compare and make informed decisions regarding your investments.
It allows you to explore various investment scenarios, enabling you to choose the one that best suits your
financial aspirations and risk appetite.
So, whether you start with a modest amount or a substantial sum,
taking that first step towards SIP investing is a wise move in your journey towards financial success. Happy investing!