Lakhpati In 12 Months: Realistic or Not?
To accumulate Rs 1 lakh in just 12 months, mutual fund SIPs could help to reach the target faster due to market-linked returns.
Raising a corpus of Rs 1 lakh could be a significant and motivating financial milestone for many Indians. It represents the first major step towards building wealth.
For many, especially young investors or those early in their careers, this milestone represents financial independence and a safety net for emergencies. One of the ways to achieve a goal like this would be to learn new remunerative skills and start a side income. Another way is to invest in assets such as mutual funds, which offer higher returns compared to traditional instruments. Mutual fund Systematic Investment Plans (SIPs) allow investors to make regular investments for various financial goals. Generally, investors prefer investing a small amount every month in SIPs to build a large corpus.
If you want to accumulate Rs 1 lakh in just 12 months, let’s see how an SIP investment could be helpful in reaching your target.
Investing In Mutual Fund SIPs
Monthly investment needed: Rs 8,000
Tenure: 1 year
Total investment: Rs 96,000
Expected returns: 8%
Estimated returns: Rs 4,111
Maturity corpus: Rs 1 lakh
As seen from the calculation, assuming an interest rate of 8% per annum, you would need a monthly SIP of Rs 8,000 to reach your goal. According to industry trends, for a short-term tenure of one year, SIPs have given returns of 8-10% per annum.
Investing can amplify wealth creation through returns on principal capital. Popular options like fixed deposits, recurring deposits, mutual funds and the provident fund come with varying degrees of risk and reward.
It is also important to focus on one’s skills to raise one’s income. This will also allow you to invest a larger amount in different instruments, thus increasing your wealth. It is also important to cut down on unnecessary expenses.
For example, if you manage to save Rs 5,000 from your salary and earn an additional Rs 3,400 per month through freelance work, you meet the Rs 1 lakh target without needing any market returns. This is because this would amount to an income (Rs 8,400 x 12) of over Rs 1 lakh.
The journey to accumulate Rs 1 lakh in a year is about discipline and consistency. Becoming a lakhpati in 12 months is certainly possible for many Indians with focused budgeting and prudent investing. However, it requires realistic planning and avoiding shortcuts like get-rich-quick schemes.
