- Building Rs 1 crore feels slow as initial growth depends mostly on contributions
- Compounding effect is modest in early years but accelerates after crossing Rs 1 crore
- Investing Rs 50,000 monthly at 12% returns yields Rs 41.24 lakh in 5 years
Building wealth in life is often described as a marathon, and it remains quite evident in the pursuit of your Rs 1 crore journey. For most of the investors, the path feels painfully slow, since it requires years of disciplined saving, while investing seems to yield modest results. In reality, reaching the target of Rs 1 crore is the hardest because it relies more on your contributions than on the power of compounding. In the early stages, your monthly SIPs do the heavy lifting, and the growth generated by investments remains relatively small. The dynamics change dramatically when you cross that crucial threshold. This is when compounding begins to accelerate, and money starts working harder than you do.
This is why building Rs 10 crore wealth through SIPs is possible if you stay consistent. The key lies in being patient, disciplined, and have the ability to trust the entire process.
Why Your First Crore Takes Forever?
Creating wealth is exponential, not linear. During the initial phase, your contributions dominate the portfolio, and compounding adds only modest growth. This is the reason why the journey to reach Rs 1 crore feels painfully slow for most investors.
The reason behind this lies in the power of compounding.
For example, if a person continues to invest Rs 50,000 per month and is getting 12% annual returns, then they will be able to generate Rs 41.24 lakhs after five years. That is substantial, but still far away from the Rs 1 crore target.
When you continue to do this for 10 years and are getting the same annual returns, then your corpus jumps to roughly Rs 1.16 crore. This clearly highlights how the second half of the decade delivered more than double the growth of the first half.
(https://www.angelone.in/calculators/sip-calculator)
This is the actual reason why the first crore feels like a grind. This is the time when your savings do most of the heavy lifting, while compounding is just warming up.
How To Reach A Rs 10 Crore Corpus Effortlessly Via SIPs?
Once you are able to reach the Rs 1 crore milestone, compounding begins to accelerate dramatically. From here onwards, the money starts working harder than you do.
Over a period of time, the growth itself compounds and creates a snowball effect. This is why the journey from Rs 1 crore to Rs 10 crore is way faster than the journey to reach Rs 1 crore in life. Here's an example to understand this better:
Monthly SIP: Rs 50,000
Expected annual returns: 12%
After 10 years: Rs 1.16 crore
15 years: Rs 2.52 crore
20 years: Rs 4.99 crore
25 years: Rs 9.48 crore
30 years: Rs 17.64 crore
This clearly shows why reaching the Rs 1 crore target is the hardest because it is built mostly on your savings. But once compounding takes over, the journey towards the Rs 10 crore corpus becomes surprisingly effortless. However, you need to stay disciplined with SIPs.
Watch LIVE TV, Get Stock Market Updates, Top Business, IPO and Latest News on NDTV Profit.
