Imagine you invested Rs 10,000 monthly in a mutual fund SIP over the next 15 years. One day you check your investment account and see a portfolio value of Rs 50 lakh. This would indeed feel like an accomplishment worth celebrating. But have you ever thought about how much of the Rs 50 lakh is actually your wealth? Here is how to find out.
Building Rs 50 lakh in 15 Years:
Monthly SIP amount: Rs 10,000
Investment duration: 15 years
Expected rate of return: 12%
Invested amount: Rs 18,00,000
Estimated returns: Rs 32,45,759
Total value: Rs 50,45,759
ALSO READ: Rs 10,000 SIP For 15 Years: Can Your Starting Date Change The Result?
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
Reality of Rs 50 Lakh After 15 Years
Rs 50 lakh can seem like a significant corpus, which can be used for your personal financial goals. But there is yet another aspect to the story: inflation.
Consider an average inflation rate of 6% every year. Anything that would cost you Rs 1 lakh at present can become as much as Rs 2.4 lakhs after 15 years.
It simply means that you will not be able to purchase the same amount with Rs 50 lakh that you can purchase with Rs 50 lakh today. The purchasing power of Rs 50 lakh after 15 years from today would be close to Rs 20.9 lakh.
What Is Your Real Wealth?
Your real wealth is not just the amount displayed on your investment app. It is what that money can actually buy when you need it.
For example, if you plan to buy a house after 15 years, a Rs 50 lakh corpus may look sufficient today. But if property prices rise steadily, the same house could cost much more by then.
Your financial goal may move further away even while your SIP balance grows.
What Should You Do?
First, it is recommended to increase your SIP as your income grows. Even a 5–10% annual increase can make a meaningful difference over time.
Second, calculate your future expenses instead of relying on today's prices. Finally, review your investments regularly and check whether your portfolio is keeping pace with your goals and inflation.
Rs 50 lakh is a milestone, not necessarily financial freedom. The real question is not how much money you have accumulated, but how much that money will be worth when you need it.
Also Read: Your Salary Rises 10% Every Year. Should Your SIP Rise By 10% Too?
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
