Rs 10,000 Monthly SIP: When Do You Actually Become A Crorepati?
How much time is required to build Rs 1 crore corpus with Rs 10,000 monthly SIPs? Here's everything you need to know.
For many investors, the dream of becoming a 'crorepati' is both inspiring and motivating, marking a major financial milestone. Amid the rapidly changing financial services industry in the country, the concept of accumulating Rs 1 crore might sound daunting to many. In reality, disciplined investing through Systematic Investment Plans (SIP) certainly makes this milestone achievable for almost everybody, thanks to the diverse range of investment choices available these days.
Investors usually prefer mutual fund SIPs as they have the potential to offer higher returns than traditional instruments.
When it comes to SIPs, individuals are required to invest a fixed amount on a regular basis into mutual funds. This amount ranges from one person to another, depending on their financial condition. With time, these small and consistent contributions can grow into substantial wealth, provided that you stay committed and patient.
Building Rs 1 Crore Corpus With Rs 10,000 Monthly SIPs
The journey towards Rs 1 crore corpus is not merely about chasing quick gains. It is more about staying disciplined and letting compounding work its magic. Even the modest investment of Rs 10,000 per month through SIPs can help you build a sizable corpus. A major takeaway here is to start your investment journey early and stay consistent over a long-term horizon. In SIPs, you get flexibility as they have the option of choosing tenure and investment amount based on your financial goals.
When you are investing Rs 10,000 monthly in SIPs, the time required to build Rs 1 crore corpus depends on the rate of return. This means the timeline to reach the financial goal varies significantly.
Traditionally, investors get an average return of 12% per annum from equity mutual fund SIPs.
At this interest rate per annum, it will take you 20 years to accumulate nearly Rs 1 crore with a monthly SIP of Rs 10,000. Here's how:
Monthly investment: Rs 10,000
Tenure: 20 years
Expected returns: 12%
Total investment: Rs 24,00,000
Estimated returns: Rs 75,91,479
Total value: Rs 99,91,479
However, this value changes if the average return rate is more than 12%. For example, if you are getting return of 15% per annum, then you can surpass Rs 1.5 crore mark by investing Rs 10,000 on monthly basis for a total of 20 years. Here's how it works:
Monthly investment: Rs 10,000
Tenure: 20 years
Expected returns: 15%
Total investment: Rs 24,00,000
Estimated returns: Rs 1,27,59,550
Total value: Rs 1,51,59,550
What to know?
Investors must know that returns fluctuate and short-term dips are quite common in mutual fund SIPs. The compounding returns depend on market performance.
Also, a corpus of Rs 1 crore today might not have the same purchasing power after 20 years.
In conclusion, building a Rs 1 crore corpus with a Rs 10,000 SIP is not a fantasy. The key here is to make investments for a longer period as this allows it time to grow exponentially. This is the reason by financial experts usually advise people to start early in life.
