Business

Why SIP investing for 20 years may not have a multiplier effect on your wealth

The first of a two-part series highlights the pitfalls of passive investing style associated with systematic investment plans. It analyses whether SIPs have potential going forward.

We have been loaded with the virtues of systematic investing via contemporary financial literature and industry experts. A cursory examination would indicate most of this associated literature is just about a decade old. The data, however, is quite compelling.

A modest investment of INR10,000 on SIP mode would make you INR1 crore in 20 years and a whopping INR7 crore in 35 years (CAGR assumed at 12%). That’s getting close to a dollar.