2 mins Read | 5 Months Ago

How to Earn 1 Crore Through SIP: A Comprehensive Guide

High dividend-paying stocks & Mutual Fund schemes

Many individuals aspire to accumulate a significant sum of Rs 1 crore through disciplined investing. If you are wondering how to earn Rs 1 crore, especially by investing around Rs 20,000 every month, you're at the right place. While achieving this financial milestone is not impossible, it is feasible with the right investment strategy and commitment to long-term financial planning. One of the most effective ways to accomplish this goal is through Systematic Investment Plans (SIP) in Mutual Funds. In this blog, we will help you with the steps to fulfil your dream of becoming a crorepati through SIPs, also emphasising the role of Equity Mutual Funds in this journey.

Understanding the goal: Earning Rs 1 crore

To earn Rs 1 crore, it is essential to be clear about expectations and understand that achieving this goal will require time and consistency. Earning Rs 1 crore through investments is a goal that can be realised with dedication and the right approach. Let's get to know the key elements of this financial aspiration assuming that one has a monthly sum of only Rs 20,000.

Mapping the path

You aim to invest approximately Rs 20,000 every month towards achieving your Rs 1 crore target. The timeline to reach this goal depends significantly on the returns you earn. While calculating, it is wise to consider the lowest expected returns to achieve realistic expectations. Let's explore different scenarios to understand how many years it may take to achieve your target. 

Monthly investment: Rs 20,000

At 10% average annual return: will take 16 years

At 12% average annual return: will take 15 years

At 14% average annual return: will take 14 years

To learn more, use the ICICI Bank Mutual Fund Calculator, to get an approximate amount. Consult an advisor/tax consultant before investing.

While these estimates provide a general idea, it's essential to recognise that the actual time it takes can vary based on market conditions and fund performances. If your investments yield higher returns, you may reach your goals sooner, which is certainly a positive outcome.

Disciplined investing: Consistency is key. To accomplish this goal, you must maintain a disciplined investment approach and stay committed to your investment plan over the long term.

Choosing the right investment: Equity Mutual Funds

When seeking sizeable wealth creation over the long term, Equity Mutual Funds are a popular choice. These funds have the potential to deliver returns that outpace inflation, making them a favoured option for wealth creation. While there are no guaranteed or fixed rates of return in Equity Mutual Funds, historical data can provide valuable insights.

Here are some popular Equity Mutual Fund categories along with their 10-year historical returns, giving an idea of what you can expect from your investments:

Large cap: 10-year return - 13.50%

Large & mid cap: 10-year return - 15.94%

Flexi cap: 10-year return - 14.52%

Equity Mutual Funds have the potential to generate average annual returns ranging from 10% to 14%. These returns, although not fixed, provide a basis for estimating your wealth accumulation journey. 

Selecting the right Equity Mutual Funds

To make the most of your SIP investments and work towards earning Rs 1 crore, you need to choose the right Equity Mutual Funds. Here are some guidelines for selecting suitable funds:

  • Diversification: Consider diversifying your investments across different categories of Equity Funds, such as large cap, mid cap and flexi cap to spread risk. 

  • Past performance: Review the historical performance of the funds to assess their track records and consistencies.

  • Fund manager expertise: Evaluate the expertise and experience of the fund managers responsible for making investment decisions.

  • Research tools: Use financial tools and resources, such as ICICI Bank Mutual Fund Calculator, to get an approximate amount of investment and returns.

Your path to earning Rs 1 crore

Earning Rs 1 crore through SIPs is an achievable financial goal, provided you engage in disciplined investing, select the right Equity Mutual Funds and stay invested for the long term. While the journey may require patience, consistent savings and an effective investment strategy, the potential rewards are significant. Past performance is indicative and market conditions can vary, so it is crucial to consult with a financial advisor, regularly monitor your investments and make informed decisions. Your path to becoming a crorepati begins with a well-structured SIP investment plan and the sooner you start, the closer you get to realising your financial dreams.

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