{"id":621,"date":"2023-09-25T18:53:59","date_gmt":"2023-09-25T13:23:59","guid":{"rendered":"https:\/\/taxsaverplus.in\/guide\/?p=621"},"modified":"2025-12-31T13:24:58","modified_gmt":"2025-12-31T07:54:58","slug":"how-does-compounding-work-in-sips-and-how-to-benefit-from-it-for-building-wealth","status":"publish","type":"post","link":"https:\/\/taxsaverplus.in\/guide\/595318how-does-compounding-work-in-sips-and-how-to-benefit-from-it-for-building-wealth\/sip\/","title":{"rendered":"How does compounding work in SIPs? And how to benefit from it for building wealth?"},"content":{"rendered":"\n<p class=\"has-white-color has-vivid-cyan-blue-background-color has-text-color has-background wp-block-paragraph\">Let&#8217;s illustrate compounding with an example: Imagine a monthly investment of Rs 5,000\/- with a 12% annualized return in stock markets. In the initial decade, the investor puts in 6 Lakhs, resulting in an investment value of about 11.21 Lacs. Moving on, in the subsequent 20 years, the invested amount increased by 3 times to Rs 18 Lacs, but the investment value would have gone up 14 times to around 1.54 Cr. Notably, this gain has occurred in the last 5 years. That is how compounding works. Most of the gains are back-loaded.<br><br>In the equation of investing, time is the most critical factor, followed by the amount invested and the potential returns achievable.<\/p>\n\n\n\n<p class=\"has-white-color has-vivid-cyan-blue-background-color has-text-color has-background wp-block-paragraph\">Login\/Register on <a href=\"https:\/\/www.taxsaverplus.in\" target=\"_blank\" rel=\"noreferrer noopener\">www.taxsaverplus.in<\/a> to download the app.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Let&#8217;s illustrate compounding with an example: Imagine a monthly investment of Rs 5,000\/- with a 12% annualized return in stock markets. In the initial decade, the investor puts in 6 Lakhs, resulting in an investment value of about 11.21 Lacs. Moving on, in the subsequent 20 years, the invested amount increased by 3 times to &hellip; <\/p>\n","protected":false},"author":2,"featured_media":82,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,21],"tags":[15],"class_list":["post-621","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sip","category-article","tag-sip","latest_post"],"_links":{"self":[{"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/posts\/621","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/comments?post=621"}],"version-history":[{"count":2,"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/posts\/621\/revisions"}],"predecessor-version":[{"id":1806,"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/posts\/621\/revisions\/1806"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/media\/82"}],"wp:attachment":[{"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/media?parent=621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/categories?post=621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxsaverplus.in\/guide\/wp-json\/wp\/v2\/tags?post=621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}