How to reach one crore?
If you save and invest systematically every month, you can achieve the dream goal of one crore. Mutual funds are an effective way of investing to build wealth. One can also reap the benefits of investing in appropriate mutual fund schemes in SIP style (Systematic Investment Plan).
For example, if the average annual return from a mutual fund is 12 percent, a monthly SIP investment of Rs 10,000 would have grown to Rs 10 lakh in five years and 10 months. (If increase in SIP amount paid every year is implemented the target can be achieved faster)
How to earn a crore in five years?
As mentioned earlier, the first million in your savings will be generated in five years and ten months. At the same growth rate, it will take nine years and two months for the same savings to reach 20 lakhs. Then it takes 15 years to reach Rs 50 lakh and 20 years to reach Rs 1 crore.
On the other hand if instead of Rs 10,000 you have invested Rs 20,000 per month as SIP amount then 15 years will be enough for your savings to reach Rs 1 crore. Similarly, if you invest Rs 30,000 every month as SIP, it will take 12 years for your savings to reach Rs 1 crore. To become a millionaire in five years, it is enough to invest one lakh rupees per month as SIP.
“Investing in mutual funds through SIP can lower the cost of investment as well as save from the monthly salary and inculcate the habit of investing. In short, you go along with your financial cycle of earning, spending and investing every month,” noted brokerage firm Value Research in a recent report.