1 crore in ten years, is it possible? Well, today we will discuss how much you need to invest to get a corpus of 1 crore in ten years. Let’s get started.
1 crore seems to be a non-reachable dream for many individuals. But in this advancing world, that amount is achievable even without any work of your own.
To achieve this goal, you have to make your money work for you. Bank savings is not an option as the returns you get is too low compared to the inflation. There are only two options available to you.
- You can invest small amounts periodically and compound your money as fast as possible. The compounding effect is so powerful that the longer you compound, the higher it grows.
- You can invest large amounts and compound it at a slower pace.
For most us, the second option is difficult to achieve unless you have a pool of money sitting at the bank. So, our only choice to achieve 1 crore in 10 years is to invest small amounts and compound it at a faster rate.
SIPs or Systematic Investment Plan is the best way to achieve this dream. SIPs allows us to invest small amounts periodically (monthly, quarterly, etc) in a selected mutual fund. This allows us to diversify and use dollar cost averaging strategy to reduce the risk exposure.
Now let’s calculate the amount you need to invest to achieve this dream. I’ll be using SIP calculator for this illustration which is easily available online. To calculate, you need three numbers.
- Your goal amount – ₹10000000
- Expected returns – 15% (Average returns on Indian stock market is around 15%)
- No of years – 10
The results are quite fascinating. You just need to invest ₹34,022 monthly for 10 years to get a corpus of ₹1 Cr. See, that’s the power of compounding. Here, the total amount you invest is ₹40,82,640 but in 10 years you have made a return of more than double that amount.
Also, there’s a catch. Most of the funds are able to get a return of more than 15%. This means that your money will be compounding much faster and you will be able to achieve your goals sooner. You don’t have to do any market research. You don’t have to monitor any stocks. Your job is to select a fund that has a good performance record and is safe to invest for the long term. Easy, isn’t it?
Keep in mind that time is an important factor when investing for the long term. The earlier you start, the more money you’ll make. So, start early. Research about mutual funds and learn how they can help you to achieve your goals.