If you're earning Rs 50,000 a month, a dream of building a Rs 1 crore corpus may seem unrealistic. It is not impossible, though. The key is to start early, invest regularly and give your money enough time to grow through the power of compounding.
If you can invest Rs 15,000 every month through a SIP, you can aim to cross the Rs 1 crore mark over a longer period. For example, investing Rs 15,000 monthly for 18 years would yield a total investment of Rs 32.40 lakh.
If we assume a 12% annual return, your estimated returns could be around Rs 74.35 lakh, taking your total corpus to nearly Rs 1.06 crore.
If your expenses are under control and you can invest a little more, you can increase your SIP amount to Rs 20,000 per month, which can help you reach your goal faster. In this case, investing for 16 years would mean a total investment of Rs 38.40 lakh.
At an assumed 12% return, your estimated return could be around Rs 70.76 lakh, taking the total value of your investment to about Rs 1.09 crore.
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For those who have fewer financial responsibilities, no major loans or liabilities, and can put aside a bigger portion of their income, a Rs 25,000 monthly SIP can build an even larger corpus in a shorter time.
A SIP of Rs 25,000 every month for 15 years would mean you invest Rs 45 lakh. With an assumed 12% annual return, the estimated returns could be around Rs 73.98 lakh, taking the total corpus to nearly Rs 1.19 crore.
Instead of investing a very large amount from the beginning, you can start with a smaller SIP and increase it every year as your salary grows. For example, you can start with a SIP of Rs 10,000 or Rs 15,000 per month and increase the amount by 5-10% every year after a salary hike.
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