Earn Rs 20,000 A Month? Here's An Investment Strategy That Can Make You A Crorepati

Many of us dream of becoming a crorepati. While it seems like a daunting ambition for several, especially those in the lower income brackets, to build a Rs 1-crore corpus fund. However, this milestone can be achieved with a little planning amid the fast-evolving financial services landscape in India.

Investment tools like mutual funds are a good option to build a corpus of Rs 1 crore over the long term through small investments. Individuals can start their wealth accumulation journey through systematic investment plans (SIPs) with even as little as Rs 500 per month.

SIPs, gold, and other assets can help diversify the portfolio and grow one's money through the power of compounding.

With consistency and financial commitment over a long-term horizon, one can create a Rs 1 crore corpus even with a monthly salary of Rs 20,000.

Let’s take a look at how to build a sizeable corpus of Rs 1 crore:

With your current salary of Rs 20,000, you can start with a small SIP of Rs 3,000-5,000. As you earn more, you can opt for ‘step-up’ SIP facility to increase your investments over the years.

Keeping a long-term investment horizon, here’s how this small SIP can grow into Rs 1 crore:

Target: Rs 1 crore

Monthly SIP investment: Rs 4,000

Step-up SIP: 10% annually

Expected returns: 12% per annum

Time required: 22 years

Invested amount: Rs 34,27,331

Estimated returns: Rs 74,41,608

Total corpus value: Rs 1,08,68,940

With more disposable income in future, you should also focus on diversifying your portfolio into gold, silver or other government-backed tools like public provident funds (PPF). This will help create a substantial retirement fund and support your portfolio by diversifying from stock market-linked products toward guaranteed return products.

Before making any major financial commitments, it is important to consider key factors such as inflation, taxes, and the potential impact on your lifestyle to avoid future financial strain. Also consider seeking advice from an investment advisor to prepare a plan that best suits your needs.