Crorepati Goal: How To Build Rs 1 Crore Corpus Without Compromising On Your Lifestyle

Becoming a crorepati is a significant financial milestone for many in India. Achieving the target of Rs 1 crore corpus paves the way for financial independence, even enabling many to retire early. These days, many young professionals are focused on reaching this milestone much before retirement.

Becoming a crorepati requires financial discipline and a long-term investment commitment. With the rising inflation, many could be forced to compromise on their lifestyle and invest the money by cutting their monthly budget to achieve the Rs 1 crore goal.

Without strategic investment plans, it can take decades to accumulate this amount. For instance, if someone just kept saving Rs 25,000 a month, it would take 35 years to reach Rs 1 crore. However, with the right investment tools, this duration can be significantly reduced without straining one’s regular lifestyle.

With proper financial planning and smart investment strategies, one can become a crorepati by diversifying their investment portfolio across asset classes. It is also important to have a long-term investment horizon of at least 15 years and above for this goal.

Let us assume that someone wants to invest Rs 25,000 per month towards this goal for a period of 15 years. Here’s how the invested amount would grow into Rs 1 crore over the entire investment tenure.

Case I: Only Equities

With such a significant investment period, one may choose to devote their investment amount fully to equities. This strategy can earn significant returns in a much shorter duration with the help of large, mid, or small-cap companies. While stock markets are high-risk in nature, past trends have shown that their volatility gets balanced when a long-term outlook is taken.

A suitable way in this case could be to invest in equity mutual funds and here’s how the amount will grow:

Investment: Rs 25,000 per month

Return assumption: 12%

Time: 14 years

 Invested amount: Rs 42 lakh

Estimated returns: Rs 61.38 lakh

Total corpus value: Rs 1.03 crore

To be clear, this goal may be achieved sooner than anticipated, as the mid and small-cap funds have traditionally given substantial returns over longer periods of time. However, this option is risky due to the lack of asset diversification and the potential market risks.

Case II: Mixed Assets

Here, we have assumed that the investment money is distributed among equities, gold and PPF. This is a more conservative approach towards investment and may take a longer duration to achieve the goal.

We have selected PPF or Public Provident Funds instead of fixed deposits because PPF is a fully tax-free option. However, those looking for more liquidity may choose FDs instead, as PPF comes with a 15-year lock-in period.

PPF Amount

Investment in PPF: Rs 8,000 per month

Final corpus after 15 years (based on current return rate of 7.1%): Rs 25.2 lakh

Mutual Fund SIP

Monthly investment: Rs 10,000

Expected return: 12%

Total invested amount: Rs 18 lakh

Estimated return: Rs 29.59 lakh

Corpus after 15 years: Rs 47.59 lakh

Invested amount in gold ETF: Rs 7,000 per month

Annualised returns based on past trends: 10% per annum

Final corpus: Rs 28.11 lakh 

In this scenario, one can achieve Rs 1 crore in 15 years through mixed-asset class investment. This route is relatively safer due to diversification. Additionally, the total maturity value will be tax-exempt. 

To conclude, achieving the goal of a Rs 1 crore corpus may seem overwhelming initially. However, it can be achieved easily with prudent financial planning. The investment strategy should align with your investment horizon and risk appetite.