Can A Rs 5,000 Monthly Investment Make You A Lakhpati In 18 Months?

Rs 1 lakh is a significant financial milestone, especially for young earners, students, homemakers, or anyone starting small. The question topmost on their minds is: How long will it take to achieve this target while investing in mutual funds?

Investing Rs 5,000 every month may seem modest, but can it realistically make you a 'lakhpati' (someone with Rs 1 lakh) in just 18 months?

We have done the math to show how long it takes to achieve a corpus of Rs 1 lakh with a monthly SIP of Rs 5,000.

Monthly investment needed: Rs 5,000

Tenure: 1.6 years

Total investment: Rs 96,000

Expected returns: 12%

Estimated returns: Rs 9,752

Maturity corpus: Rs 1.06 lakh

It is important to remember that actual returns can vary from the value given above. 

As per this calculation, it takes slightly over 1.5 years or 18 months to achieve a corpus of Rs 1 lakh with a monthly SIP of Rs 5,000.

However, Rs 5,000 a month can indeed make you a 'lakhpati' in 18 months if your investments deliver around 15% annual returns. While not guaranteed, equity mutual funds can offer such potential returns over the medium term. If you lean toward safer instruments, you might need to increase your monthly contribution or extend your investment period.

Relying solely on a Rs 5,000 SIP to reach the Rs 1 lakh target in 18 months with realistic returns is unlikely. The required annual return is only achievable in extremely high-risk, high-volatility scenarios (like highly concentrated stock bets or crypto), which is not a sensible strategy for a first-time investor.

If you want a corpus of Rs 1 lakh in 18 months, the simplest solution is to increase your monthly contribution slightly. Even increasing it by Rs 500, that is an SIP of Rs 5,500, will comfortably yield a corpus of Rs 1 lakh.