Nowadays, everyone dreams of becoming a millionaire, but many people assume that for this, lump sum savings of lakhs of rupees are necessary. However, a disciplined way of investing SIP (Systematic Investment Plan) can make you a millionaire even with modest savings. If you save ₹10,000 every month, then let us understand how long it will take you to touch the magical figure of ₹1 crore through mutual funds.
The biggest benefit of investing in mutual funds is compounding. In this, you also get returns on your investments, which creates a huge fund in the long run.
1. Mathematics of 12% annual return
If you invest in a scheme that gives an average annual return of 12%, it will take you 20 years to build a corpus of ₹1 crore.
- Total investment: ₹24,00,000
- Estimated Returns: ₹75,91,479
- Total Fund: ₹99,91,479 (Approximately ₹1 Crore)
2. Mathematics of 15% annual return
If your portfolio performs well and you get annual returns of 15%, the time frame will be much shorter. In this situation you will reach close to ₹ 1 crore in just 17 years.
- Total investment: ₹20,40,000
- Estimated Returns: ₹80,88,382
- Total Fund: ₹1,01,28,382
3. The magic of Step-up SIP
If you want to achieve this target before 20 years, then you should adopt step-up SIP. This means that every year as your income increases, increase the SIP amount by 10%. If you start with ₹10,000 and grow it by 10% every year, you can build a corpus of ₹1 crore in just 15 years with 12% returns.
advice for investors
- Get started early: The younger you start investing, the greater the benefit of compounding.
- Discipline is important: Never stop your SIP due to market fluctuations.
- Portfolio Review: Check the performance of your funds every year and seek help from a financial advisor if needed.
SK Sharma is a content writer who writes on news, entertainment, and lifestyle topics. She has over four years of experience and is known for conveying information in simple and clear language.
