The 4×15×20 SIP Formula: How Small Monthly Investments Can Grow Into ₹8+ Crore — When Done Right

In personal finance, wealth is rarely created through shortcuts. Real wealth comes from discipline, patience, and the power of compounding.

One simple idea that has helped many Indian investors stay disciplined is the 4×15×20 SIP formula. At first, it looks almost unbelievable — how can small monthly investments grow into a multi-crore corpus?

The answer is not magic.

It’s mathematics + consistency + time.

Let’s understand this correctly—and see how it fits into a smart, goal-based plan.

What Is the 4×15×20 Formula?

The formula is commonly used in Systematic Investment Plans (SIPs) and combines three elements of wealth creation:

4 → ₹4,000 monthly SIP (starting amount)15 → 15% annual step-up in SIP contribution20 → investment period of 20 years

👉 In simple terms, you:

• Start with ₹4,000 per month.

• Increase the SIP by 15% every year, and

• Continue this discipline for 20 years

This approach works exceptionally well for salaried and young professionals, whose income gradually increases over time.

How Does It Work in Real Life?

Let’s see the growth pattern:

Year 1: ₹4,000 per month. Year 2: ₹4,600 per month. Year 3: ₹5,290 per month…and the increase continues each year.

So as your income grows, your investment grows too — without financial stress.

This is why the formula is both practical and sustainable.

Assumptions Behind the Numbers

To see what the outcome could look like, let’s use realistic long-term assumptions:

• Starting SIP: ₹4,000 per month

• Duration: 20 years (240 months)

• SIP step-up: 15% every year

• Expected equity return: 12% annually

⚠️ These are assumptions — not guarantees. Markets fluctuate, and actual returns may be higher or lower.

What Could You Potentially Build?

Based on the above assumptions:

• Total investment: ₹49,17,120

• Estimated future value: ₹8,28,67,252

• Estimated wealth created (profit): ₹7,79,50,132

👉 You invest less than ₹50 lakh, yet your wealth can potentially cross ₹8 crore — simply by staying disciplined and letting compounding work.

That’s the real strength of step-up SIPs.

Why Does the 4×15×20 Strategy Work So Well?

✅ 1. Compounding accelerates wealth

Your returns start earning returns — especially in the later years.

✅ 2. Step-up matches salary growth

When income rises, investments increase naturally — without lifestyle pressure.

✅ 3. Rupee-cost averaging

SIPs invest through market ups and downs, reducing timing risk.

✅ 4. Discipline replaces emotion

You invest regularly — instead of reacting to market noise.

Important Reality Check

🔸 Inflation matters

₹8 crore after 20 years will not equal ₹8 crore today. That’s why staying invested in growth assets is essential.

🔸 Taxes apply

Equity mutual funds are subject to Long-Term Capital Gains (LTCG). Your post-tax corpus may be slightly lower — planning can help optimise it.

🔸 Step-ups require commitment

Skipping increases or stopping SIPs midway will reduce the final value.

🔸 Fund selection matters

The right category, asset allocation and periodic review are crucial.

This is where guided financial planning makes a big difference.

Who Should Consider the 4×15×20 Approach?

This strategy is ideal for:

• Young earners starting their investment journey

• Salaried employees receive yearly increments.

• Investors planning retirement, children’s education, or financial freedom

• Anyone who wants a structured, realistic path to wealth creation

Even if you can step up only 10% instead of 15%, you still create meaningful wealth.

The formula is flexible — the goal is consistency.

PaisaNurture Insight: Turning This Formula Into a Real Plan

The 4×15×20 SIP concept is powerful — but it works best when backed by proper planning.

At PaisaNurture, we help you:

✔ Choose suitable mutual funds

✔ Decide realistic SIP step-ups based on your income

✔ Review and rebalance annually

✔ Stay disciplined during market volatility

✔ Align investments with real financial goals

Our focus is simple:

Zero mis-selling. Goal-based planning. Long-term wealth.

Final Thought

Wealth is not built by chasing “hot tips” or timing markets. It is constructed quietly — through time, patience, discipline, and smart planning.

If you’d like to know:

📌 How much SIP should you start with?

📌 What step-up percentage suits your income, and

📌 whether this strategy fits your goals —

We’ll calculate it for you and guide you step by step.

Book a free financial review with PaisaNurture — and let’s build your roadmap to long-term wealth.

Disclaimer

Mutual fund investments are subject to market risks. Returns used above are illustrative and not guaranteed. Please consult PaisaNurture for personalised financial planning and suitability.