Investing Rs 25,000 Monthly? Here's The Timeline To Become 'Crorepati' At 10%, 12% And 15% Returns

Building a corpus of Rs 1 crore does not require a large initial investment. What matters most is a long-term financial strategy and consistency in investments. Becoming a crorepati is a remarkable milestone for many people and it can be easily achieved even with small investments over a long tenure. Mutual fund systematic investment plans (SIPs) allow investors to build wealth by investing small amounts every month instead of a lump sum investment.  

A long-term horizon allows the power of compounding to give higher returns. Over a medium to long-term outlook, small amounts could even grow multi-fold. New-age investment options, such as mutual funds, have further accelerated the process of wealth creation by offering market-linked returns.

Despite temporary downturns in markets, mutual funds have rewarded investors during booming cycles. In certain years, many equity funds have generated 15% or even more returns, helping investors achieve a corpus of over Rs 1 crore faster than they anticipated.

While such returns may not always remain true for all investments, historical trends indicate that mutual funds have generated 10% to 12% average returns per annum, allowing investors to benefit from steady, consistent investing.

For building a corpus of Rs 1 crore, the annual returns can play a crucial role as they influence the investment amount and the estimated tenure to reach the milestone. Let’s see, with a monthly SIP of Rs 25,000, how you can reach the target of Rs 1 crore at assumed interest rates of 10%, 12% and 15% per annum.

You can achieve your crorepati goal with a monthly SIP of Rs 25,000. However, return rates could significantly alter your investment tenures.

Let’s take a look at investment scenarios across three given interest rates:

With 10% Returns:

• SIP amount: Rs 25,000

• Investment duration: 15 years

• Expected rate of return: 10%

• Invested amount: Rs 45,00,000

• Estimated returns: Rs 59,48,106

• Total value: Rs 1,04,48,106

With 12% Returns:

• SIP amount: Rs 25,000

• Investment duration: 13.5 years

• Expected rate of return: 12%

• Invested amount: Rs 40,50,000

• Estimated returns: Rs 60,81,800

• Total value: Rs 1,01,31,800

With 15% Returns:

• SIP amount: Rs 25,000

• Investment duration: 12 years

• Expected rate of return: 15%

• Invested amount: Rs 36,00,000

• Estimated returns: Rs 64,89,615

• Total value: Rs 1,00,89,615

As seen from the above calculations, different return rates can have a significant impact on the investment horizon to achieve the milestone. With higher return rates, you can become a crorepati not only in a shorter tenure but also with a lower investment amount. As per the above investment scenarios, you can reach the Rs 1 crore target in 15 years at an estimated annual return rate of 10% with a monthly SIP of Rs 25,000. Similarly, it will take more than 13 years to reach the target at estimated returns of 12% per annum and 12 years at 15%.

It's advisable to assess all risk factors before investing, as stock market returns are not guaranteed. It could be a prudent step to discuss your financial goals with a certified expert to finalise a realistic timeline for achieving your crorepati goal.