For many people in India, their first job is also their hope to start their own wealth creation journey. Without any inheritance or generational wealth, it may seem a little challenging to build your portfolio from scratch. However, the selection of the right assets and a disciplined approach to investment can help you reach their milestone. More than investment, your key asset here is time, which will ensure that your money keeps compounding over the years.
5 Crore Corpus: Is It Possible?
At the age of 20, it is important to understand that time is your main asset. Even if you do not start with a lucrative salary, small contributions will significantly help in boosting the power of compounding over time.
If you keep a long-term investment goal and follow a disciplined path, here is what your portfolio can look like:
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Investments in SIP Mutual Funds:
Monthly amount: Rs 4,000
Step Up % (annual): 10%
Investment duration: 30year
Expected rate of return: 12%
Invested amount: Rs 78,95,713
Estimated returns: Rs 2,74,40,781
Total value: Rs 3,53,36,494
You start your mutual fund journey with Rs 4,000 in the first year, ensuring that you grow the contribution every year (matching with your income growth). This will accelerate the power of compounding, allowing your investment to grow more effectively. By the time you are 50, you can end up with a solid corpus worth Rs 3.53 crore.
Similarly, if you start with a small investment into gold every month, here what it can add to your portfolio:
Monthly amount: Rs 3,000
Step Up % (annual): 10%
Investment duration: 30 year
Expected rate of return: 10%
Invested amount: Rs 59,21,784
Estimated returns: Rs 1,33,37,388
Total value: Rs 1,92,59,173
After 30 years, you can end up with a Rs 1.92 crore gold portfolio, assuming that the precious metal follows its historical pattern to give an average 10% returns.
This means that over 30 years, you build a strong Rs 5 crore portfolio even if you start from scratch with an initial investment of Rs 7,000 in the first year. To be clear, market and gold investments are never guaranteed. Still, long-term investment outlook significantly lowers the risks associated with them.
These calculations do not account for inflation or taxes. Moreover, depending on your goal, you can choose from a range of financial assets that are available in the market. To optimize your returns, it is best to consult with an expert and plan your journey accordingly.
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