Can Rs 450 Daily Really Build Rs 1 Crore?

Becoming rich early in life is a dream for many. In order to achieve financial freedom and take early retirement, reaching the milestone of your first Rs 1 crore could be a crucial achievement. It gives confidence to take more risks for a financially secure future. It’s a myth that you always need a large amount to invest for building a Rs 1-crore corpus. You can start your investment journey even with an amount as low as Rs 500 per month for your dream goal.

If you want to start your investment journey to a big target like Rs 1 crore, systematic investment plans (SIPs) could be the most suitable option. Mutual fund SIPs allow investors to invest small amounts regularly, like daily, weekly, monthly, quarterly and annually. You can even start an SIP with as low as Rs 100 per month. However, most mutual funds generally allow a minimum monthly SIP of Rs 500 or Rs 1,000.

You can even start your investment journey to reach the target of Rs 1 crore with a modest amount of Rs 450 daily, which amounts to Rs 13,500 per month. Due to the power of compounding, this modest investment can grow into a substantial corpus over the years. Here, a long-term investment strategy and consistency could be crucial to reach your crorepati goal.  

Assuming a return of 12% per annum, let’s see how a daily SIP of Rs 450 will grow over the years into Rs 1 crore.  

• Monthly Investment: Rs 13,500 (Rs 450 daily)

• Investment duration: 18 years

• Expected rate of return: 12%

• Invested amount:  Rs 29,16,000

• Estimated returns: Rs 74,17,429

• Total value: Rs 1,03,33,429

As seen from the above calculation, an SIP of Rs 450 daily (Rs 13,500 per month) at an assumed return rate of 12% per annum can help you achieve the Rs 1 crore target in 18 years. However, it’s important to note that these are estimated values and actual returns may vary due to market conditions and taxation.

You can also realise your crorepati goal with the same SIP investment in a shorter duration by using the step-up feature. A step-up SIP allows investors to increase investments at a fixed percentage every year.

Let’s see how a step-up SIP at 10% per annum can help you reach the Rs 1 crore goal faster:

• Monthly Investment: Rs 13,500

• Investment duration: 15 years

• Expected rate of return: 12% per annum

• Step up: 10% per annum

• Invested amount: Rs 51,47,142

• Estimated returns: Rs 65,76,054

• Total value: Rs 1,17,23,196

 As the above calculation indicates, a step-up SIP at 10% per annum can help you accumulate Rs 1.17 crore in 15 years at an assumed annual interest rate of 12%, compared to 18 years through a normal SIP.   

Building a corpus of Rs 450 with a daily SIP of Rs 450 is not a difficult task. The ambitious financial goal can be achieved with a disciplined investment approach and long-term planning.