Building a corpus of Rs 1 crore is a common long-term financial goal for many Indians. But how quickly you can get there depends on your starting amount, investment returns and whether you continue adding money.
For someone aged 35 who has saved Rs 50 lakh, reaching the next milestone may be closer than it seems. If the existing money remains invested and earns returns over time, it can potentially grow to Rs 1 crore through the power of compounding.
Here's how long it could take for a Rs 50 lakh corpus to double under different return assumptions.
- Investment amount: Rs 50,00,000
- Investment duration: 6.5 years
- Expected rate of return: 12%
- Estimated returns: Rs 54,44,487
- Total value: Rs 1,04,44,487
The calculation shows that at an assumed annual return of 12%, a Rs 50 lakh corpus can turn into Rs 1 crore in just over six years. It also checks the popular 'Rule of 72', which estimates the time needed to double money based on a consistent rate of return.
Rule of 72 Formula works as follows:
Years needed = 72 / Interest Rate
In this case, tears needed = 72/12, which is 6 years
This means that ideally, around six years are needed to double a Rs 50 crore corpus. Investors need to be realistic about capital market returns, as they are never guaranteed.
Markets consistently delivering 12% returns per year may also not be realistic and depend on aspects like macro-economic conditions, global situations, etc.
That is why, while planning such critical financial goals, it is important to consult financial experts to avoid financial stress later.
ALSO READ: Rs 1 Crore Corpus: How Much Of It Could Inflation Take Away Over 20 Years?
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