Earning Rs 50,000 A Month? Here’s How You Can Build Rs 50 Lakh Corpus In 10 Years

It may seem like a tough task to build a corpus of Rs 50 lakh for someone earning Rs 50,000 per month. However, with smart financial planning and disciplined investing, it’s possible to reach this goal in 10 years.

Consistent investments across different assets and savings instruments can help you build a Rs 50 lakh corpus due to the power of compounding. 

Let’s see how you can build Rs 50 lakh fund in 10 years.

First, let’s understand the target. You want to accumulate Rs 50 lakh in 10 years, which would translate to Rs 5 lakh per year. You’ll need to consistently invest a portion of your income into high-return instruments to reach this milestone.

Systematic Investment Plans (SIPs) in mutual funds are ideal for salaried individuals. If you can allocate 40% of your monthly income, which amounts to Rs 20,000, into SIPs across diversified equity mutual funds, you’re on the right track. Choose funds with strong historical performance and stay invested for the long term.

You can also step up your SIP by a certain percentage every year as your salary increases. This “step-up SIP” strategy ensures your investments keep pace with your income and inflation.

If you just put aside money in a savings account or a recurring deposit, it won’t grow fast enough due to lower returns. Instead, invest in mutual funds that can help your money work harder. For instance, if you invest Rs 20,000 per month for 10 years and get an average return of 12% annually (common for equity mutual funds), you will accumulate close to Rs 47 lakh. By increasing your investment by just 3% each year, you could boost that amount to over Rs 51 lakh.

To invest Rs 20,000 monthly, you need to control expenses. Prepare a realistic monthly budget, track spending and cut back on unnecessary costs. Avoid debt traps like credit card rollovers and high-interest personal loans.

Whenever you receive a yearly bonus, tax refund, or gift money, direct a portion of it towards your investment goal. Even occasional lump sum investments can significantly reduce the pressure on monthly contributions.

While chasing this goal, don’t neglect financial basics. Build an emergency fund equivalent to at least three to six months’ of your regular budget and get adequate health and life insurance. This protects your investment plan from unforeseen shocks.

Earning Rs 50,000 a month doesn’t mean you can’t aim big. With a clear plan, disciplined SIPs and careful budgeting, you can turn your Rs 50,000 salary into Rs 50 lakh in 10 years.