For many investors, reaching the target of Rs 1 crore corpus may look like a distant dream, but it is not an impossible task. You can become a crorepati even with modest investments every month. A long-term investment strategy with consistency and financial discipline could be helpful in conveniently building a corpus worth over Rs 1 crore.
With rising financial awareness in India, investors have been exploring new asset classes and investment options. In recent years, mutual funds have gained popularity among Indian investors for long-term wealth accumulation. Mutual fund Systematic Investment Plans (SIPs) offer enormous flexibility, allowing investors to choose tenure and the amount as per their financial goals.
Even a modest SIP of Rs 5,000 every month can grow substantially over 20-30 years. The journey from Rs 5,000 per month to Rs 1 crore is not about chasing quick gains. It is rather about consistency and letting time do the heavy lifting.
As per past industry trends, equity mutual funds have delivered average returns of around 10–15% over a long-term horizon. At these rates, even a relatively small SIP of Rs 5,000 can grow exponentially due to the power of compounding.
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Rs 1 Crore Target: How Fast Can A Rs 5,000 Monthly SIP Grow?
If you are planning to build a Rs 1 crore corpus with a monthly SIP of Rs 5,000, here's how your money would grow at different return rates:
1. At an average return of 10% per annum
Target: Rs 1 crore
Monthly SIP: Rs 5,000
Time needed: 29 years
Expected rate of return: 10%
Invested amount: Rs 17,40,000
Estimated returns: Rs 85,19,021
Total value: Rs 1,02,59,021
2. At an average return of 12% per annum
Target: Rs 1 crore
Monthly SIP: Rs 5,000
Time needed: 26 years
Expected rate of return: 12%
Invested amount: Rs 15,60,000
Estimated returns: Rs 91,95,560
Total value: Rs 1,07,55,560
3. At an average return of 15% per annum
Target: Rs 1 crore
Monthly SIP: Rs 5,000
Time needed: 22 years
Expected rate of return: 15%
Invested amount: Rs 13,20,000
Estimated returns: Rs 90,33,294
Total value: Rs 1,03,53,294
The above scenarios show how a monthly SIP of Rs 5,000 can help investors in creating a large corpus, provided they have an investment timeline of more than 20 years.
The investment horizon plays a key role in SIP investments, with a longer tenure often leading to higher returns. A step-up SIP, which allows you to increase your investments at periodic intervals, generally every year, could also be helpful in reaching the Rs 1 crore target in a shorter duration.
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