Investing Rs 2,50,000 Lump Sum Today? Check Projected Final Gains In 2030 Vs 2035

If you want to invest in mutual funds or any other instrument, one of the things to consider is the duration of the investment. Investment horizon is a significant aspect of planning your investment.

If you have a lump sum of Rs 2,50,000 sitting idle today, the question isn't if you should invest it, but where and for how long. The truth is, even a few extra years of compounding can dramatically alter your final wealth.

Let's break down the potential final value of this investment in the medium-term (till 2030) versus the long-term (till 2035):

Investing In Mutual Fund Lump Sum Till 2030:

• Total investment: Rs 2.5 lakh

• Tenure: 5 years

• Expected returns: 12%

• Estimated returns: Rs 1.91 lakh

• Maturity corpus: Rs 4.41 lakh

Investing In Mutual Fund Lump Sum Till 2035:

• Total investment: Rs 2.5 lakh

• Tenure: 10 years

• Expected returns: 12%

• Estimated returns: Rs 5.26 lakh

• Maturity corpus: Rs 7.76 lakh

As you can see, if the mutual fund yields an interest of 12% annually, you would more than double your gains by staying invested for five more years. 

The most compelling aspect of this analysis is the stark difference the extra five years makes due to compounding. Time in the market still beats timing the market.

For a relatively small lump sum like Rs 2,50,000, choosing a shorter duration means sacrificing the immense power of compounding. If you don't need the money in the short term, holding onto your investment until 2035 significantly increases your chances of substantial wealth creation and successfully beating inflation.

You can stay invested for an even longer duration to further increase your wealth. At the same time, you can also invest in mutual funds through SIPs and invest in other assets such as gold and real estate. 

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