‘10% return myth...’: CA explains why SIP investors need 25 years for real gains
The financial expert also cautioned investors to remember that real-world returns can differ due to taxes, fund management fees, and market fluctuations. “If your portfolio isn’t growing fast today, relax — the foundation is being built, and the magic of compounding accelerates with time,” he added.
- Nov 2, 2025,
- Updated Nov 2, 2025 9:36 PM IST
In a thought-provoking post on X (formerly Twitter), Chartered Accountant Nitin Kaushik has challenged one of the most popular beliefs in personal finance — that a “10% annual return” can double your money quickly. His post, which has sparked widespread discussion among investors, highlights the often-overlooked nuance of compounding when it comes to systematic investment plans (SIPs).
“Everyone dreams of doubling their money with a magical 10% return. But here’s the catch — compounding with monthly SIPs isn’t as fast as finance charts suggest,” Kaushik wrote.
Explaining further, Kaushik pointed out that investors contributing monthly through SIPs need nearly 25 years before their investment gains finally exceed the total amount they’ve put in. In contrast, a one-time lump sum investor sees gains overtake the principal much faster — in just about seven years.
“The first two decades of SIP investing are largely about patience, discipline, and consistent contributions,” he noted. “It’s only after staying invested long enough that the market truly rewards you through the power of compounding.”
Kaushik also cautioned investors to remember that real-world returns can differ due to taxes, fund management fees, and market fluctuations. “If your portfolio isn’t growing fast today, relax — the foundation is being built, and the magic of compounding accelerates with time,” he added.
Patience, Kaushik emphasises, is the true currency of wealth creation through SIPs. Unlike a lump-sum investment that begins compounding immediately on the full amount, SIPs grow gradually — each monthly contribution gets less time in the market to compound.
This staggered investment pattern means the early years may seem slow or unrewarding, but the longer one stays invested, the faster the growth curve becomes. The compounding effect kicks in meaningfully only after years of disciplined investing, turning time and consistency into the most powerful allies for long-term wealth creation.
His post underscores a key lesson for retail investors — compounding is not an overnight phenomenon but a long-term process that rewards perseverance. For many, Kaushik’s reminder serves as a reality check against unrealistic expectations set by simplified financial projections and online calculators.
In a thought-provoking post on X (formerly Twitter), Chartered Accountant Nitin Kaushik has challenged one of the most popular beliefs in personal finance — that a “10% annual return” can double your money quickly. His post, which has sparked widespread discussion among investors, highlights the often-overlooked nuance of compounding when it comes to systematic investment plans (SIPs).
“Everyone dreams of doubling their money with a magical 10% return. But here’s the catch — compounding with monthly SIPs isn’t as fast as finance charts suggest,” Kaushik wrote.
Explaining further, Kaushik pointed out that investors contributing monthly through SIPs need nearly 25 years before their investment gains finally exceed the total amount they’ve put in. In contrast, a one-time lump sum investor sees gains overtake the principal much faster — in just about seven years.
“The first two decades of SIP investing are largely about patience, discipline, and consistent contributions,” he noted. “It’s only after staying invested long enough that the market truly rewards you through the power of compounding.”
Kaushik also cautioned investors to remember that real-world returns can differ due to taxes, fund management fees, and market fluctuations. “If your portfolio isn’t growing fast today, relax — the foundation is being built, and the magic of compounding accelerates with time,” he added.
Patience, Kaushik emphasises, is the true currency of wealth creation through SIPs. Unlike a lump-sum investment that begins compounding immediately on the full amount, SIPs grow gradually — each monthly contribution gets less time in the market to compound.
This staggered investment pattern means the early years may seem slow or unrewarding, but the longer one stays invested, the faster the growth curve becomes. The compounding effect kicks in meaningfully only after years of disciplined investing, turning time and consistency into the most powerful allies for long-term wealth creation.
His post underscores a key lesson for retail investors — compounding is not an overnight phenomenon but a long-term process that rewards perseverance. For many, Kaushik’s reminder serves as a reality check against unrealistic expectations set by simplified financial projections and online calculators.