How much to invest to accumulate Rs 1 crore in 10 years, 15 years, 20 years Strategic investments, like SIPs in equity funds, can help reach that goal. Regular investing and a long-term view are crucial. Even a Rs 1,000 SIP can grow substantially over time, thanks to compounding. Disciplined investing is key to turning your crorepati dream into reality. Here is how to accumulate Rs 1 core from mutual fund SIPs in 10 years, 15 years, 20 years and 25 years
Becoming a crorepati is a dream of every investor. But, to turn this dream into a reality, you need to make the right investment. Equity mutual funds are one of the investments that could help to achieve your dream goal of Rs 1 crore. The next question is how much you need to invest. And for how long? Keep in mind that no matter where you invest, you will not become a crorepati overnight. So, it will take some amount of time. So, the next thing you need to reach the goal is discipline. You need to invest regularly. One of the best ways to invest consistently in a disciplined way is to opt for a systematic investment plan(SIP). Not only it helps to build a big lump sum amount over a period of time but it also allows you to start small and scale it up gradually. Even if you start a SIP in an equity mutual fund with a monthly investment of Rs 1,000, you can accumulate Rs 2.2 lakh in 10 years, assuming you get an annual return of 12%. As you can see, even a small investment in SIP can grow your wealth significantly in the long term.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
How much should you invest in mutual fund to accumulate Rs 1 crore? Here's how to decide
How much you need to invest every month will depend on three key things — return, time horizon and risk appetite. Return is simply the return you will get from the equity mutual funds. The time horizon of your investment will be the time frame within which you want to achieve your target while risk appetite denotes how much risk you can take. As equity mutual funds involve higher risk than debt investment it is suitable for long-term investments. It is even better if you invest in equity mutual funds for a minimum of seven years. The longer you remain invested the risk of volatility will be lower. When you stay invested over the long term, some years of low or negative returns and some years of impressive returns will make the average returns quite reasonable. So, the longer you stay invested in equity mutual funds, the better return you will get.How much to invest to save Rs 1 crore in 10 years, 15 years, 20 years, 25 years
Let us assume that you get an annual return of 12% from your mutual fund investment. Based on it, we will calculate how much you should invest every month to achieve the goal of Rs 1 crore in different horizons — 10 years, 15 years, 20 years, 25 years. Remember that there is no guarantee about the returns from mutual funds. The past returns are used as reference points just to calculate what you can expect.The shorter the tenure, the more amount of money you need to invest.
To earn 1 crore from mutual fund investment in 10 years (annual return is 12%), you need to invest Rs 44,640 every month for the entire tenure.
If you can extend the investment horizon by five more years to 15 years, you have to invest Rs 21,020 a month. As you can see, your monthly investment will significantly reduce if you can wait for five more years.
Follow this table to know how much you need to invest in a mutual fund SIP in a month to achieve Rs 1 crore
How much to invest in mutual funds to accumulate Rs 1 croreAnnual return
Investment tenure
Monthly SIP amount
12%
10 years
Rs 44,640
12%
15 years
Rs 21,020
12%
20 years
Rs 10,880
12%
25 years
Rs 5,880
If you have an even longer timeframe of 20 years, the monthly investment amount will be further reduced. To accumulate Rs 1 crore in 20 years from an equity mutual fund offering a 12% yearly return, you have to invest Rs 10,880 a month for the entire tenure.
When you can invest for 25 years, the monthly investment amount will come down to Rs 5,880.
As you can see, the longer the tenure, the less amount you have to invest. If you are lucky and get a much higher return then the time taken to reach the milestone would be much shorter.
Why should you start your mutual fund investment early?
So you can accumulate a big lump sum corpus with an initial small investment if you start early. This happens due to the power of compounding. You earn returns not just on the principal that you invest, but also on the returns generated from the investments. The longer you stay invested, the greater the impact of compounding. Longer tenure will also help to mitigate the market volatility and get the benefit of rupee-cost averaging. You also have a larger risk appetite when you are young, compared to when you are middle-aged or close to retirement.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
This story originally appeared on: India Times - Author:Faqs of Insurances
