To fullfill all the dreams, the only way is to earn a good amount of money. Nowadays, money plays a vital role. Only a monthly salary from an ordinary job, may not prove enough to achieve Rupees 1 crore in 12 years. For this, you have to you have to invest. But where?
If you dream of building a corpus of ₹1 crore in the next 12 years, a SIP (Subsidiary Investment Investment Plan) in mutual funds could be the best way to achieve this. Let’s find out how much you’ll need to invest each month to build a corpus of ₹1 crore in 12 years.
How to earn 1 Cr. in 12 years?
To get this amount in this time frame completely depends on the returns. The higher the returns, the lower the monthly investment amount. If your mutual fund generates a 10% annual return, you will need to invest around Rs 36,000 per month in an SIP. If the return is 11% per annum, the SIP amount will reduce to around Rs 33,500 per month. However, if the return is 12% per annum, you can build a corpus of Rs 1 crore in 12 years with just Rs 31,250 per month in an SIP.
Compounding means that the money earned initially becomes principal and accrues interest. This process generates significant returns over the long term.
To make crores through SIP, two things are crucial. First, the sooner you start investing, the more time your money will have to compound. Second, don’t stop your SIP midway. Investing consistently over the long term is the only way to reach crores.
Benefits of SIP
Start with a small amount – You can start with just Rs 100 per month.
Rupee Cost Averaging – Reduces the impact of market fluctuations.
Discipline investing – The habit of setting aside a fixed amount every month.
Bigger funds in the long run – bigger returns from compounding.
Tax Benefits – Mutual funds like ELSS offer tax benefits.
Flexibility – It is easy to increase or decrease the SIP amount as and when required.