A bank balance of Rs1 crore is indeed a tempting offer. To enjoy a satisfied and relaxed life, one ought to have a financially secured future. And to be truly financially independent, one must implement a well-defined financial strategy and ensure that they regularly exercise it. This process entails saving extra, making educated investment decisions, and also cutting down on unnecessary expenses. Investors often wonder if they can make Rs 1 crore by investing Rs 10,000 each month. Well, to their surprise, they can. This article will help act as an investment guide for the same.

How to achieve Rs 1 crore corpus?

One can achieve this target by investing in mutual funds. You can invest in mutual funds via a lumpsum investment or systematic investment (SIP). If you have the funds available readily, you might consider making a lumpsum investment. A lumpsum investment is when an individual chooses to a invest the entire investment amount in one go.One can use a mutual fund lumpsum calculator to understand the number of years required to become a crorepati by investing a lumpsum of Rs 10 lac. A lumpsum calculator helps to analyse the returns on mutual fund investments over time.

The following table portrays the number of years required to accumulate a sum of Rs 1 crore if you invest a certain amount in lumpsum mutual fund. The table also takes into account different rates of interest earned on mutual funds.

Lumpsum investment Rate of interest earned on lumpsum mutual fund (in %)
  6% 8% 10% 12% 15%
Rs 10 lac 40 30 24 20 16
Rs 20 lac 28 21 17 14 12
Rs 25 lac 24 18 15 12 10
Rs 30 lac 21 16 13 11 9

As you can see, if you invest Rs 10 lac, then your investments are likely to turn into Rs 1 crore after a period of 40 years or 16 years, dependent on the average annual returns by your mutual fund scheme. As, 40 years is a long time, experts suggest investors to regularly invest in mutual funds to achieve the targeted corpus earlier. You can make a lumpsum investment, and then systematically invest in mutual funds. This will reduce your investment tenure to a great extent.

Would it be sufficient?

While this seven-figure amount might seem sufficient to fulfil your financial goals currently, it might not be the same ten to fifteen or even twenty years down the line. Why, you may wonder. Inflation. Inflation tends to eat the value of your money constantly. With time, the purchasing power parity tends to lessen. If you consider the average annual inflation rate as 6%, then you would need around Rs 1.8 crores after 10 years or Rs 3.2 crores after 20 years to meet your future financial goals. So, always make it a habit to account for inflation and taxes. It is always advised to invest in mutual funds as soon as possible to achieve your targeted corpus early. Happy investing!

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