Rs 90,000 Lump Sum At 25 — Future Value At Age 35, 45, 55
Starting investments early at the age of 25 is crucial for wealth accumulation, but an extended tenure can potentially generate higher returns.
When it comes to building wealth, consistency and a long-term strategy can lead to remarkable results. You can create a large corpus even by investing small amounts regularly. Wealth creation is a gradual process and a disciplined investment approach can help you to reach your goal conveniently. The return you get on your investments and the duration you remain invested could significantly affect your maturity corpus.
If you have a lump sum amount to invest at once, it may also help you to generate a large corpus in the long term due to the power of compounding. A lump sum investment in a mutual fund helps to generate higher returns when timed well during a market slump. The entire lump sum amount benefits from compounding from day one, leading to higher returns over the years.
A lump sum investment involves deploying the entire amount into a mutual fund at once rather than in instalments.
Generally, equity-linked mutual funds have offered higher returns over a long-term horizon, as per industry trends. So, an extended tenure could be crucial to building a sizable corpus even with a lump sum investment. If you have Rs 90,000 to invest upfront in a mutual fund, let’s see how it can grow over different investment tenures. For instance, assuming that you start your investment journey at the age of 25, here’s how the lump sum amount can potentially grow by the time you turn 35, 45, and 55.
Here, we have assumed an annual interest rate of 12%.
Investing Rs 90,000 In A Mutual Fund Till 35
Total investment: Rs 90,000
Tenure: 10 years
Expected rate of return: 12%
Estimated returns: Rs 1.9 lakh
Maturity corpus: Rs 2.8 lakh
Investing Rs 90,000 In A Mutual Fund Till 45
Total investment: Rs 90,000
Tenure: 20 years
Expected rate of return: 12%
Estimated returns: Rs 7.78 lakh
Maturity corpus: Rs 8.68 lakh
Investing Rs 90,000 In A Mutual Fund Till 55
Total investment: Rs 90,000
Tenure: 30 years
Expected rate of return: 12%
Estimated returns: Rs 26.06 lakh
Maturity corpus: Rs 26.96 lakh
As the above calculations show, the most important factor is not the size of the investment, but the time it is given to grow. This calculation demonstrates the power of the investment horizon in wealth creation.
As the duration of the investment increases, the returns get more time to compound, thus increasing your overall maturity corpus. Thus, you will get a substantially greater corpus at the age of 55, compared to 45 or 35, when you start investing at the age of 25. However, it’s advisable to assess risk factors and your financial goals, as mutual fund investments are prone to market risks.
