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Often people think that to become a millionaire or to create a huge corpus of Rs 1 crore at retirement, they have to invest a huge amount every month. However, financial discipline and planning started at the right time makes achieving this big goal very easy. If you start a Mutual Fund SIP (Systematic Investment Plan) of ₹ 6,000 every month by saving just ₹ 200 daily from your monthly income, then by the time of retirement you can have a corpus of more than ₹ 1 crore in your hands with the estimated 12% annual return available in equity mutual funds and the ‘power of compounding’.
Monthly SIP of ₹6,000 to ₹1 crore: Understand the complete mathematics of time and returns
Long-term equity mutual funds (large cap, flexi cap or index funds) have historically delivered an average compound annual return (CAGR) of 12%.
If an investor continues to invest ₹6,000 every month without stopping, his corpus over time builds up like this:
| Investment Period (Years) | Total Investment | Estimated Returns (@12% pa) | Total Maturity Fund (Expected Corpus) |
| 10 years | ₹7,20,000 | ₹6,72,234 | ₹13,92,234 (~₹14 lakh) |
| 15 years | ₹10,80,000 | ₹19,07,678 | ₹29,87,678 (~₹30 lakh) |
| 20 years | ₹14,40,000 | ₹45,54,923 | ₹59,94,923 (~₹60 lakh) |
| 25 years | ₹18,00,000 | ₹95,85,811 | ₹1,13,85,811 (~₹1.14 crore) |
Real magic of compounding: ₹ 18 lakh out of pocket, return received more than ₹ 95 lakh!
It is clear from the above figures that the total out-of-pocket cost to the investor over 25 years is only Rs. ₹18 lakh She goes. the rest ₹95.85 lakh Made only by compound interest and compounding growth of the market.
While in the first 10 years the total fund reaches only ₹ 14 lakh, in the next 15 years the speed of compounding becomes so fast that the fund directly crosses ₹ 1.14 crore. This is why the great scientist Albert Einstein called compounding the ‘eighth wonder of the world’.
How to complete the journey of 25 years in 18-20 years with ‘Step-up SIP’?
If you don’t want to wait as long as 25 years and want to become a millionaire quickly, then you Step-up SIP You can opt for:
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10% increase every year: Increase the SIP amount by 10% every year along with the annual increment in your salary.
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Fast Growth: ₹6,000 per month in the first year, ₹6,600 per month in the second year, ₹7,260 per month in the third year and so on.
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Result: By adding 10% step-up, the target of ₹1 crore can be achieved in just 25 years instead of 25 years. 18 to 20 years It is achieved within.
4 important golden rules to achieve the target of ₹1 crore
It is important to keep these basic points in mind while investing in mutual funds:
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1. Never stop SIP when the market falls: Market dip proves to be a boon for SIP investors as more units are allotted at lower NAV.
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2. Choose a diversified portfolio: Divide your monthly investment of ₹6,000 among 2-3 good funds—like 1 Nifty 50 index fund, 1 flexi cap fund and 1 mid cap/multi cap fund—instead of putting it in a single fund.
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3. Keep auto-debit mode on: Set the SIP date for the next day of salary credit (between 1st and 5th) so that savings happen automatically first and only the remaining money is spent.
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4. Take care of long-term taxes: Equity mutual funds attract a 12.5% tax on annual long-term capital gains (LTCG) above ₹1.25 lakh, which should be kept in mind while redeeming.
If you are in the age group of 25 to 30 years, you can make your retirement completely financially secure and stress-free by starting a monthly SIP of ₹6,000 today.