Achieving a financial goal of Rs 1 crore is a common aspiration for many investors. The amount required to be invested regularly to reach this goal can vary significantly depending on the time frame and the expected rate of return on investments. Here’s a look at how much you would need to invest to accumulate Rs 1 crore over 10, 15, and 20 years.
Here is a calculation from the Economic Times how to grow a corpus of Rs 1 crore and in how many year:
Accumulating Rs 1 crore in 10 years
To accumulate Rs 1 crore in 10 years, investors need to save a substantial amount regularly, given the shorter time frame.Assuming an annual return of 12%, which is achievable through aggressive investments in equity mutual funds or stocks, the monthly investment required would be approximately Rs 44,640.
Accumulating Rs 1 crore in 15 years
For a longer time horizon of 15 years, the power of compounding works more effectively. Assuming the same annual return of 12%, the required monthly investment would be significantly lower, around Rs 21,020. This demonstrates the benefit of starting early and allowing investments more time to grow.
Accumulating Rs 1 crore in 20 years
With a 20-year investment horizon, the monthly investment required drops even further, leveraging the extended period for compounding. At an expected annual return of 12%, an investor would need to invest approximately Rs 10,880 per month to reach the Rs 1 crore target.
Expert insights
As per the ET report, financial advisors emphasize the importance of disciplined investing and choosing the right mix of assets to maximize returns. “Equity mutual funds have historically provided around 12% annual returns over the long term, making them a suitable choice for long-term goals like accumulating Rs 1 crore,” says Rohit Shah, a Mumbai-based financial planner.
However, investors should be aware of market risks and ensure their investment strategy aligns with their risk tolerance and financial goals. Diversification and periodic review of the investment portfolio are also crucial to stay on track.
Key takeaways
Start early: The earlier you start investing, the lower the monthly investment required to reach your goal.
Consistent investing: Regular, disciplined investing is essential to accumulate wealth over time.
Right investment vehicles: Choosing the right investment options, like equity mutual funds, can provide the necessary returns to meet your financial goals.
Review and adjust: Periodically review your investments and make adjustments as needed to stay aligned with your goals and risk tolerance.
By understanding these principles and planning accordingly, investors can effectively work towards accumulating Rs 1 crore over their chosen time frame.