Becoming a ‘crorepati' is a dream for millions of Indians. While it may seem like a distant goal, smart financial planning can make it a reality. The popular television game show, Kaun Banega Crorepati, also offers an opportunity to the contestants to realise their dream of securing Rs 1 crore. The latest season of the show, hosted by Amitabh Bachchan, started on Sony Entertainment Television on Aug. 11. Even if you fail to make it to the hot seat on the popular show, you can still become a crorepati.
Be it equity shares or gold, disciplined saving across various assets and patience can help you achieve your Rs 1-crore corpus fund in just a little over a decade. You can achieve this goal due to the power of compounding with financial discipline and consistent investment.
It may seem a daunting task initially, but you can build a corpus worth Rs 1 crore even with a modest salary of Rs 35,000 per month.
How To Build Rs 1 Crore Corpus
For this goal, let's divide the contribution into three assets: gold, the stock market and fixed deposits or schemes like public provident funds (PPF).
Mutual Fund Investments
Monthly SIP: Rs 20,000
Time period: 12 years
Expected return: 12% per annum
Invested amount: Rs 28,80,000
Estimated returns: Rs 35,65,043
Total value: Rs 64,45,043
Gold Investment
Monthly: Rs 10,000
Time period: 12 years
Expected return: 10% per annum
Invested amount: Rs 14,40,000
Estimated returns: Rs 13,47,415
Total value: Rs 27,87,415
Public Provident Fund
Monthly: Rs 5,000
Time period: 15 years
Expected return: 7.1%
Invested amount: Rs 9,00,000
Estimated returns: Rs 7,08,120
Total value: Rs 16,08,120
After considering the estimated returns in mutual funds and gold, there is a need for an additional Rs 7.6 lakh. Staying invested in PPF for 15 years can generate over Rs 16 lakh, more than double the required value to achieve your Rs 1 crore goal.
The required amount of Rs 7.6 lakh to reach Rs 1 crore gets accumulated in your PPF account in the 9th year itself. However, you will be able to unlock this money only after 15 years. The interesting thing is that with just three additional years of investment compared to mutual funds and gold, you can secure an additional amount of over Rs 8 lakh above your Rs 1 crore goal. This can help you offset the impact of your capital gains taxes.
Alternatively, you can also choose fixed deposits as an option, which come with lower returns. However, FD returns are taxable, unlike the PPF investments. In any case, it's advisable to consult a financial expert to discuss your investment plan before choosing the assets.
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