How to Select Your Investments to Make Rs 10 Crore Fast
The first question is where should you invest to build a corpus of Rs 10 crore? Experts suggest that systematic investment plans (SIPs) in mutual funds are a great way to build substantial wealth over time. Equity mutual funds are emerging as a preferred option for long-term wealth generation. Regular investments, even small ones, in equity funds can lead to significant corpus creation over time. This is primarily attributed to the compounding effect and rupee cost averaging. While equity investments are associated with higher risk compared to debt or hybrid funds, they have historically outperformed inflation, making them ideal for long-term goals. For example, the NIFTY 50 Total Return Index, which is a good barometer of stock market returns, has delivered annual returns of 13.5% over the past 10 years, 13.4% over the past 15 years, 16.2% over the past 20 years and 13.8% over the past 25 years till August 21, 2024. Discipline is paramount to maximize returns from mutual fund investments.
How much to invest from a monthly salary of Rs 1 lakh to become a crorepati?
The next logical question is how much investment is required to reach the Rs 100 crore milestone. The ideal investment amount depends on several factors such as the investment horizon and expected returns. Let us explain how much you need to invest to get Rs 100 crore from a mutual fund.
While 1 lakh a month may seem modest, it is essential to set aside a portion of it every month to build substantial wealth. Allocating 15-20% of monthly income towards investments can help you reach the Rs 100 crore milestone in a decent period. Keep in mind that the higher the monthly contributions, the shorter the time frame. If you contribute a small amount every month, it will take you longer to achieve your Rs 100 crore dream.
Suppose you invest 15% of your salary (Rs 15,000 per month) in an equity mutual fund that gives an annual return of 12%. If you have a consistent return, you will get Rs 10 crore in 211 months.
If you invest 20% of your salary (Rs 20,000 per month) in an equity mutual fund and get an annual return of 12%, you can accumulate Rs 100 crore in 185 months. If you invest Rs 25,000 (25% of your salary) in a mutual fund that generates an annual return of 12%, you will get Rs 101 crore in 166 months.
How much should you invest to save Rs 1 crore on a salary of Rs 1 lakh per month?: Check the calculation here
| SIP Mutual Fund with 12% Annual Return | ||
| SIP amount each month | Annual increase | Number of months it will take to save Rs 10 crore |
| 10,000 rupees | No increase | 249 |
| 10,000 rupees | 5% | 220 |
| 10,000 rupees | 10% | 194 |
| 15,000 rupees | No increase | 211 |
| 15,000 rupees | 5% | 186 |
| 15,000 rupees | 10% | 166 |
| 20,000 rupees | No increase | 185 |
| 20,000 rupees | 5% | 164 |
| 20,000 rupees | 10% | 147 |
Use progressive SIP to accelerate the creation of a lump sum corpus quickly
To speed up your journey to one crore, consider a staggered SIP (Investment Equity Investment) investment. As income increases, so should your investments. This strategy involves gradually increasing your SIP amount annually.
The dual benefits of a progressive SIP are clear: it acts as a hedge against inflation while also taking advantage of rising income. By aligning investments with income growth, individuals can accelerate their wealth creation timeline.
How will the progressive SIP work? Let us say we start a SIP with Rs 15,000 per month and get an annual return of 12%. If we increase it by 5% every year, we can accumulate Rs 10 crore in 186 months.
If you can afford to increase the monthly SIP investment by 10% every year, you can get Rs 1 crore in 166 months.
Similarly, let’s say you start with an initial monthly SIP of Rs 20,000 per month. You get an annual return of 12% from your mutual fund. Now, if you increase the SIP amount by 5% every year, you can build a corpus of Rs 10 crore in 164 months.
The increase will depend on how much you can afford to invest each month. However, as you can see, it will help you reach your goal faster. Even if you can’t invest a considerable amount at first, with a regular increase you can easily save up a lump sum quickly.
Want to make Rs 10 crore? Follow this investment approach
To accumulate a significant amount, like Rs 10 crore, patience and discipline are essential. Achieving this goal requires regular investments over a reasonable period. It is important to avoid withdrawing from your SIPs hastily, especially during market downturns. Historically, equity mutual funds have generated decent returns when held for at least 7 to 10 years. For example, the large-cap equity fund category has generated an annual return of 13.22% over the past 10 years as per the latest data from Value Research. There are many other categories of equity mutual funds that have delivered even higher returns. This long-term investment horizon is why SIPs are particularly suited to building wealth over a period of time.
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