How can Rs 100 a day help you earn more than 1 crore with the power of SIP?

Saving and investing for the future often seem daunting, especially when faced with the prospect of achieving large financial goals with seemingly small contributions. However, the concept of building wealth through consistent saving, even in modest amounts, holds remarkable potential.

Consider the case of saving Rs 100 a day, which translates to Rs 36,500 annually or approximately Rs 3,041.66 per month. While this might appear trivial at first glance, its cumulative effect over time can be transformative, particularly when invested wisely.

According to financial experts, allocating at least 20% of one's monthly income towards savings is prudent. For someone earning around Rs 15,500 per month, saving Rs 3,041.66 aligns with this recommendation.

Now, let's delve into the impact of this disciplined saving strategy when coupled with market-linked investment plans such as mutual funds, specifically through a systematic investment plan (SIP). Assuming an annual return of 12%, the potential for wealth creation becomes evident.

In a span of 15 years, the expected corpus from investing Rs 3,041.66 monthly would amount to Rs 15,34,416, with a total investment of Rs 5,47,380, resulting in long-term capital gains of Rs 9,87,036.

As time progresses, the compounding effect of SIP investments becomes more pronounced. Over 20 years, the corpus is projected to grow to Rs 30,38,409, with an investment of Rs 7,29,840, yielding long-term capital gains of Rs 23,08,569.

Continuing this disciplined approach for 25 years further accelerates wealth accumulation, with the corpus reaching Rs 57,70,708, while the investment totals Rs 9,12,300, leading to long-term capital gains of Rs 48,58,408.

Finally, after 30 years of consistent saving and investing, the potential for achieving crorepati status becomes tangible. With a total investment of Rs 10,94,760, the expected wealth stands at an impressive Rs 1,07,34,468, with long-term capital gains amounting to Rs 96,39,708.

It's important to note that mutual fund investments carry market risk, and due diligence is essential before making any investment decisions. Nonetheless, the overarching message remains clear: the journey to financial security and wealth creation begins with small, consistent steps, exemplified by the power of saving just Rs 100 a day.

By starting early, individuals can leverage the compounding effect to build a substantial corpus over time, paving the way towards achieving their long-term financial objectives.