Rs 30,000 SIP: Can You Become A Crorepati In Eight Years?

Becoming a crorepati is not just a dream goal for many, but it’s a crucial milestone for a financially secure future. Having Rs 1 crore in the bank brings a sense of security and stability. Reaching your first Rs 1 crore corpus may seem an unrealistic target, but it can be easily achieved with disciplined investments and a long-term financial strategy. You can build a corpus of Rs 1 crore conveniently with a systematic investment plan (SIP).

With the right SIP strategy and consistency, you can realise your crorepati goal even by investing small amounts every month. SIPs allow investors to invest a fixed amount at periodic intervals. For long-term wealth creation, SIPs are often preferred by Indian investors as they offer potentially higher returns and allow enormous flexibility in terms of tenure and investment amount.  

It may sound unrealistic, but with a monthly investment of Rs 30,000 in SIP, you can conveniently reach your Rs 1 crore goal. Due to the power of compounding and rupee cost averaging, SIPs allow your investments to grow despite the market risks.

If you have an investment horizon of eight years, let’s see how your monthly SIP of Rs 30,000 can help in building a corpus of Rs 1 crore.

If you invest Rs 30,000 per month for eight years and expect an average return of 12% per annum, let’s see how your money will grow:

Monthly Investment: Rs 30,000  

Investment Duration: 8 years

Expected returns: 12% per annum

Invested amount: Rs 28,80,000

Estimated returns: Rs 19,65,796

Total value: Rs 48,45,796

As seen from the above calculation, you can accumulate Rs 48.46 lakh with a monthly SIP of Rs 30,000 for eight years at an assumed average return of 12% per annum. The maturity value is not even half of your intended target of Rs 1 crore. In this scenario, you can increase the monthly SIP amount or extend the investment horizon to achieve your Rs 1 crore goal.

Let’s see how you can reach the Rs 1 crore target with a monthly SIP of Rs 8,000

Monthly Investment: Rs 30,000  

Investment Duration: 13 years

Expected returns: 12% per annum

Invested amount: Rs 46,80,000

Estimated returns: Rs 65,97,934

Total value: Rs 1,12,77,934

You can easily surpass the Rs 1 crore milestone in 13 years with a monthly SIP of 30,000. The extended tenure plays a key role here, allowing your investments to grow faster due to the power of compounding. However, the crorepati goal can be achieved even in a shorter duration through the same SIP using the step-up feature.  

Many mutual fund SIPs come with the step-up feature, which allows investors to increase the investment amount at a fixed percentage at regular intervals, generally every year.

If you invest Rs 30,000 per month with a 10% annual step-up and an average estimated return of 12% per annum, you can accumulate approximately Rs 1.01 crore in 10 years.

Instead of choosing a single SIP, diversification of the portfolio with multiple mutual fund plans could be helpful for higher returns. Diversification often helps in minimising risks.  It’s advisable to do thorough research and evaluate all risk factors before investing in an SIP. Seeking guidance from a financial advisor before investing could also be helpful in building a strong strategy to mitigate risks.