SIP Investment: Want to become a crorepati at 35? Achieve it with 25000 monthly SIP and this small trick!
SIP Investment: In India, most people typically begin their careers around the age of 23 or 24. This is the time when individuals finish college and step into the workforce, usually starting with an entry-level job and a modest salary. However, by the time they reach their 30s, the goal shifts towards earning a stable income and securing a mid-level role. For many, becoming a ‘crorepati’ by their mid-30s is a dream. While accumulating Rs 1 crore by age 35 might sound unrealistic at first, it can be conveniently achieved with smart planning, discipline, and consistency.
To achieve such an aggressive goal, equity mutual funds could be a suitable choice due to their potential for higher returns compared to traditional instruments. However, simply investing a fixed amount monthly might not be enough given the limited time frame. Let’s explore how you can reach this milestone.
How Long Does a Standard SIP Take?
If you start a monthly SIP of Rs 25,000, it will require significant time to grow into Rs 1 crore. Assuming a conservative expected return of 10%, the duration would be around 15 years.
Calculation for Standard SIP:
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Join on Telegram| Details | Amount/Duration |
|---|---|
| Monthly SIP Amount | Rs 25,000 |
| Investment Duration | 15 Years |
| Expected Rate of Return | 10% |
| Total Amount Invested | Rs 45,00,000 |
| Estimated Returns | Rs 59,48,106 |
| Total Value | Rs 1,04,48,106 |
In this scenario, if the target is to raise the corpus by age 35, one would need to start investing at age 20, which is often unrealistic.
Step-Up SIP: The Strategy to Reach the Goal Faster
To achieve the Rs 1 crore target within a shorter tenure, opting for a ‘step-up’ SIP is advisable. This technique allows you to gradually increase your investment periodically, usually every year, as your income grows. This leverages the power of compounding more effectively.
If you start your career just before age 25 and use a step-up strategy, you can reach the goal in 11 years.
Calculation for Step-Up SIP:
| Details | Amount/Duration |
|---|---|
| Initial Monthly Amount | Rs 25,000 |
| Annual Step Up % | 10% |
| Investment Duration | 11 Years |
| Expected Rate of Return | 12% |
| Total Amount Invested | Rs 55,59,350 |
| Estimated Returns | Rs 47,76,940 |
| Total Value | Rs 1,03,36,290 |
By increasing the SIP amount by 10% annually, you can accumulate over Rs 1 crore in just 11 years, making the dream of being a crorepati by age 35 a realistic possibility.
Expert Advice
For the best outcome, it is highly recommended to discuss your financial goals with a certified expert. Since mutual fund investments are prone to market risks, a proper financial plan devised by an expert can help ensure healthy returns while minimising risks.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor before making any investment decisions.
