SIP Calculator

How this is calculated

FV = D × ((1+r)ⁿ − 1) ÷ r   r = return ÷ 12, n = years × 12, D = monthly

Worked example: $500/month at 12% for 15 years → about $250,000 from $90,000 invested — the rest is compounding. The longer the runway, the larger the gains portion grows.

What a systematic investment plan actually buys

Investing a fixed amount at fixed intervals does two things. It automates the decision, which removes the largest single source of poor returns — waiting for a good moment and then waiting through the recovery. And it buys more units when prices are low and fewer when high, so the average cost per unit comes out below the average price over the period. That effect is real, and it is smaller than most marketing suggests.

The evidence on lump sums is worth knowing: investing all available money immediately beats phasing it in roughly two-thirds of the time, simply because markets rise more often than they fall. Regular investing wins on behaviour rather than arithmetic — it is what people can actually sustain from a salary, which is why it produces better real-world outcomes than a strategy that is optimal on paper and abandoned in March.

Step-ups matter more than timing

Increasing the contribution annually in line with income compounds twice: more money invested, and invested earlier than it otherwise would have been. A 10% annual escalation on a modest starting contribution frequently outperforms a much larger flat contribution over a twenty-year horizon, and it is nearly painless when tied to a pay rise you have not yet adjusted your spending to.

What the projection assumes, and where it breaks

A single smooth growth rate is a convenience. Real returns arrive unevenly, and the arithmetic mean of a volatile series overstates what you actually compound at — a fund returning +30% then −20% has averaged 5% and grown by 4%. Costs also compound: an annual charge of 1.5% against 2% is not a small difference over thirty years, it is a large fraction of the final balance. Enter a return net of fees, or read the result knowing it is gross.