How Do I Invest 5 Lac to Reach 1 Crore?
The Financial Goal
If your financial goal is to reach 1 crore in 10 years, with an initial investment of 5 lakhs in mutual funds, here are a few tips to help you realise your goals.
Your Returns:
We believe that the correct expectation for long-term (7+ years) return in equity funds is 12% per annum (as of 2021).
The Expectations
Your Returns:
Markets can be volatile in the short term (5 or less years) and thus, historical returns tend to be in the 12% range rather than the best-case scenario of 25%.
The Considerations
Well-managed equity funds tend to do better, on average, than the index.
To achieve Rs 1 Crore in 10 years, you will have to start with more than Rs 5 lakhs - approximately Rs 33 lakhs!
How Much Do You Need To Put Down?
Start with Rs 5 lakhs, and invest an extra Rs 22,000 every month. By the end of the first year, you’d have invested a total of Rs 2.6 lakhs.
Start With 5 Lac, Add More
Increase the amount you save by 15% pa, so the amount changes to Rs 25,300 per month from year two.
Your investment figure goes up annually for the rest of the period.
Keep Investing Month On Month
Assuming that returns are in the 12% range, you should be able to reach your Rs 1 crore goal in 10 years.
The end result should be the same as starting with Rs 33 lakhs.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.