Crorepati with mutual funds: Rs 20,000 monthly SIP turns to Rs 1 crore in 10 years (2024)

FAQs

Crorepati with mutual funds: Rs 20,000 monthly SIP turns to Rs 1 crore in 10 years? ›

Can a monthly Systematic Investment Plan (SIP) of Rs 20,000 make you a crorepati? The answer is Yes. ETMutualFunds did some data crunching and found that a monthly SIP of Rs 20,000 would have turned you into a crorepati in a decade.

Step 3: Calculate the Required Monthly SIP Amount

For example, at the annual return of 11%, to save ₹1 crore rupees in 10 years, an individual would require approximately Rs. Rs. 45,665 per month or should start a SIP of Rs. 37,924 per month and increase this by 5% every year.

An investor may generate at least 48 lakhs by investing 20,000 per month for 10 years. If one sees and analyses the returns on investment under SIP schemes, one may examine how they can build a corpus by investing 20,000 per month for 10 years under SIP schemes.

An example of how SIP calculator works

You expect a return of 12% per year from equity investment. In this case, the total corpus that you will accumulate after 10 years is Rs 23.23 lakhs. If, however, you increase investment to Rs 15000 every month, you will accumulate Rs 34.85 lakhs.

Long-term investment

As mentioned earlier, longer the tenure, the higher the returns. What if the SIP were continued for a decade i.e., 10 years? Then the investment would have grown to ₹30.32 lakh. And in 15 years' time, the investment would have swelled to ₹69.37 lakh by making an investment of ₹18 lakh via SIPs.

What is 15-15-15 Rule? The rule says to achieve the goal of earning Rs 1 crore, an investor should invest Rs 15,000 monthly through SIP for 15 years, considering a 15% annual return from an equity fund. Consistent adherence to this strategy can lead to significant wealth accumulation.

Now, let's consider how our calculations change if the time horizon is 10 years. If you are starting from scratch, you will need to invest about $4,757 at the end of every month for 10 years. Suppose you already have $100,000. Then you will only need $3,390 at the end of every month to become a millionaire in 10 years.

SIPs can be used for investing in all mutual funds, but they are typically more popular for investing in equity funds. On the other hand, FDs require you to invest a lump sum at once, earning a fixed interest rate until the deposit matures. FDs are widely considered safer, offering guaranteed returns.

How much to invest in SIP to get 50 lakhs in 10 years? ›

At this rate, a Rs 10000 monthly SIP started with this fund would have earned over Rs 50 lakh to investors in 10 years. The fund has performed even better in the shorter time-frames like 5 years, 3 years and 1 year. Over the last 5 years, it has grown by 40.55% annually and 167% in absolute terms.

Assuming you invest INR 1000 every month in a Systematic Investment Plan (SIP) for a period of 10 years and earn an average annual return of 12%, the future value of your investment would be approximately INR 3,29,683.

Calculation of SIP returns

To understand this, let us take an example. A monthly investment of Rs 5,000 for 10 years at an expected rate of return of 12 per cent will earn you Rs 11.61 lakh.

Starting a SIP of Rs. 30,000 per month for 5 years is a prudent decision towards achieving your financial goals. By investing in diversified equity funds or balanced funds through a Certified Financial Planner, you can navigate market uncertainties and work towards building a robust investment portfolio.

By investing Rs 50,000 per month one time, he could look to accumulate Rs. 19.16 lakhs in twenty years with 20% annualized returns. We have taken a weighted average of the return of each fund after considering the lower 3-year and 5-year returns as the return over the 20 years.