Why ₹42-lakh SIP can beat a ₹1.8-Cr investment: SIP lesson you can't ignore

Time beats size: A ₹10,000 SIP started early can outperform a ₹1 lakh SIP started late.

Two friends, one investing modestly early and the other launching large SIPs later, serve as a vivid illustration of how compounding and time in the market matter more than the size of the investment. According to Value Research’s analysis, the first friend, Akanksha, put in ₹10,000 a month over 35 years starting at age 25. Her friend Smita waited until age 45 and then invested ₹1 lakh a month for 15 years. Though Smita’s monthly SIP was five times larger, Akanksha’s total contribution was just ₹42 lakh compared to Smita’s ₹1.8 crore, yet Akanksha ended up with a much larger corpus.

 

By the time Akanksha turns 60, her simple Rs 10,000 SIP can grow into a massive Rs 5.5 crore, assuming a 12 per cent annual return.

 

Smita, despite investing five times more every month, can end up with Rs 4.75 crore, even if her investments also grow 12 per cent annually. 

 

Same return. Same instrument. Very different outcomes.

 

Why? Because Akanksha had something Smita didn’t: time in the market.

 

"Her money got 35 years to compound. Smita’s got 15. And with compounding, time matters more than timing, income and even the size of the SIP. Akanksha’s smaller SIP investment beat Smita’s giant, delayed SIP by Rs 4.3 crore. Not because she invested more. Not because she was luckier. But because she started early enough to let compounding do the heavy lifting.

 

The numbers are clear:

 

Smita poured Rs 1.38 crore more of her own money into the market in 15 years than Akanksha did over 35 years (Rs 1.8 crore vs Rs 42 Lakh).

Yet, Akanksha's final portfolio is Rs 75 lakh larger.," explained Value Research in a note. 

 

For investors, especially those in their 30s or early 40s, this means it’s better to begin a modest systematic investment plan (SIP) today rather than delay and increase the monthly amount later. The mathematics of compounding rewards early entry.

 

What this means in practice:

 

A smaller SIP started early gives your money more years to grow exponentially.

 

Delaying investment means you lose out on growth years, and even much larger contributions cannot always catch up.

 

A 12% return assumption may be conservative or aggressive depending on market conditions, but the principle remains: longer time horizon => much greater benefit.

 

Investors should resist the temptation to wait for higher salary, perfect market timing, or “ideal” investment conditions. Instead, start what you can now.

 

Your risk profile, fund choice and monthly budget matter, but what matters most is consistency and duration.