Saving Rs 10 crore in 20 years might sound like a huge goal but with the right plan it’s achievable. One of the best ways to reach this target is through a Systematic Investment Plan (SIP). SIP allows you to invest a fixed amount regularly in mutual funds helping your money grow over time with the power of compounding.
What is SIP?
SIP is a method where you invest a fixed amount like Rs 5000 or Rs 10000 every month in a mutual fund. Instead of investing a lump sum SIP lets you spread your investment over time. This makes it easier for regular people to save and invest without needing a lot of money upfront. The money you invest grows because mutual funds put it into stocks, bonds or other assets that can give good returns.
Why Choose SIP for Rs 10 Crore?
SIP is perfect for longterm goals like building Rs 10 crore because it offers-
- Discipline: You invest regularly so you don’t miss out on market opportunities.
- Compounding: Your money earns returns and those returns earn more returns over time.
- Affordability: You can start with a small amount and increase it as your income grows.
- Rupee Cost Averaging: When markets go up or down SIP buys more units when prices are low and fewer when prices are high balancing your costs.
How Much Should You Invest?
o reach Rs 10 crore in 20 years the amount you need to invest depends on the expected return from your mutual fund. Equity mutual funds which invest in stocks can give average returns of 10-12% per year over the long term though returns are not guaranteed. Let’s assume a 12% annual return for calculation.
Using a SIP calculator to achieve Rs 10 crore in 20 years with a 12% return you need to invest around Rs 80000 per month. If you expect a higher return say 15% the monthly SIP amount drops to about Rs 55000. These numbers show that starting early and choosing funds with good performance are key.
Tips to Make It Happen
- Start Early: The sooner you start the less you need to invest each month because your money has more time to grow.
- Choose the Right Fund: Pick equity mutual funds with a strong track record. Research or consult a financial advisor to find funds that match your risk level.
- Increase SIP Amount: As your salary increases step up your SIP by 5-10% each year to reach your goal faster.
- Stay Consistent: Don’t stop your SIP even if markets fall. Staying invested through ups and downs helps you benefit from longterm growth.
- Monitor and Adjust: Review your mutual fund’s performance every year. If a fund is underperforming consider switching to a better one.
Final Thoughts
Building Rs 10 crore in 20 years is a big but realistic goal with SIP. By investing regularly choosing good mutual funds and staying patient you can let compounding work its magic. Start small stay disciplined and keep your eyes on the goal. With time your consistent efforts can turn your dream of Rs 10 crore into reality.