As interest in long-term financial growth picks pace in India, becoming a crorepati remains a key milestone in this journey. While the goal seems ambitious, even small, consistent steps and a long-term investment horizon can help fulfil this dream.
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To become a crorepati, one does not need a higher contribution, but a long-term investment horizon. One of the easiest paths towards this goal is mutual fund investments, which have historically performed strongly over long-term timelines.
Another option is to invest in gold, which is a safe haven asset and is known for providing stability during economic uncertainty. Investors can also consider traditional options such as government-backed schemes, but they can take significantly longer periods as they offer modest returns. As the investment value here is only Rs 5,000 per month, traditional options may not be the best strategy.
With just monthly contributions into mutual funds, here's how much time it can take to become a crorepati:
SIP amount: Rs 5,000
Investment duration: 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
With just gold investments, here how much time it may take:
SIP amount: Rs 5,000
Investment duration: 29 years
Expected rate of return: 10% (historical)
Invested amount: Rs 17,40,000
Estimated returns: Rs 85,19,021
Total value: Rs 1,02,59,021
These calculations show that it can take around 25-30 years to reach the Rs 1 crore milestone, depending on the asset chosen. If investors wish to accelerate this process, they can choose the ‘step-up' technique. In this, they must increase their contributions annually, which helps compounding process work faster and also aligns with income growth.
For instance, a 10% increase in annual contribution can help the goal this way:
Monthly amount: Rs 5,000
Step-Up % (annual): 10%
Investment duration: 20.5 years
Expected rate of return: 12%
Invested amount: Rs 38,40,149
Estimated returns: Rs 71,21,888
Total value: Rs 1,09,62,038
This shows that with ‘step-up' technique, investors can reach their goal of Rs 1 crore in 20.5 years if they opt for mutual funds. Investors who do not feel confident about solely investing in mutual funds, may also consider diversifying their portfolio. They can create a mix of equities, gold and debt assets to bring stability in the investment journey.
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