How to invest to achieve the goal of 1 crore with mutual funds

December 20, 2022

Investing in mutual funds is among the most popular and reliable waysto grow your money, allowing you to achieve greater wealth and financialsecurity. But what if that goal was more ambitious – like investing and getting1 crore? It may seem daunting at first glance, but don’t be discouraged! Withthe right strategy and dedication, it can definitely be done. In this blogpost, we will explain how to invest so you can eventually turn one crore intoreality through mutual funds. Read on for invaluable tips about setting goals,risk management strategies, and more!

How to make 1 crore in 10 years by SIP?

Themost popular option for achieving the target of making one crore rupees in just10 years is a systematic investment plan (SIP). This requires disciplinedinvesting. However, the rewards can be high. If you have the funds readilyavailable, starting with a lump sum and topping this up with SIP investmentswould be a good option. Unless you are willing to take on higher risks,sticking to large-cap mutual funds would be safer in the long term. Your bestbet, however, might be to increase your monthly investments over time, as thatfits better into most budgets. Careful planning with regular contributionsshould help you reach your goal of 1 crore in 10 years through a SIP investmentplan.

How would the SIP work to create 1 crore in10 years flat?

To reach the goal of 1 crore in 10 years, the SIP will requireconsistent and regular investments. The amount you choose to invest each monthis ultimately up to you, but here's an example of how it can work: let’s say you choose to start investing Rs 36,000 every month through a mutual fund SIP. Assuming a 15 percent rate of return on your investment over 10 years (which isvery conservative by industry standards), this would translate into a corpus of₹1, 00,31,662 crores at the end of 10 years.

It's important to remember that nothing is guaranteed in the world of investing. It’s always best to have realistic expectations about your returns and takeprecautions against market risks. Making 1 crore in 10 years is an ambitious goal, but it’s achievable with the right strategy and commitment. If you start early enough, have a disciplined approach, and are willing to stick to yourinvestments for the long term, then investing through SIP should get you there. Here is how much you need to invest to get the return of 1 cr in the certain years.

Tenure of SIP Yield on SIP Fund Your Total Investment Monthly SIP required

10 years 15% 43.6 Lac ₹36,334.96

7 years 15% ₹57.09 Lac ₹67,967.55

5 years 15% ₹67.74 Lac ₹1.13 Lac

4 years 15% ₹73.59 Lac ₹1.53 Lac

So why wait? Start investing today and make that one crore a reality!

If you are very new at investing and need help understanding everything, we suggest you hire a financial advisor or wealth management company. We can also help you with your investment journey; Wealth First Online is the best investment company, dial +91 9979854966 and get in touch with our certified financial planner.

How to make the most of your SIP?

1. Get benefits of power of compounding

Investingin Equity Mutual Funds is an ideal strategy for investment via a SystematicInvestment Plan (SIP). SIPs on equity funds allow you to benefit from the powerof compounding, which is much higher than any type of debt fund. In the longrun, it can provide exponential returns due to compounding, and your money hasthe potential to magnify multiple times. Furthermore, time plays an essentialrole in equities as opposed to "timing" with debt or liquid funds,meaning that by investing for longer, you can increase your wealth. Investingin equity funds through SIPs is a sound way to make long-term financial goals areality.

SystematicInvestment Plans (SIPs) should be set up and adhered to in a disciplinedmanner, as suggested by the acronym. When SIPs are disrupted, the compoundingof gains of long-term investments are also disrupted. Stopping the SIP shouldbe avoided unless there is an absolute necessity to do so. The best practice isestablishing a rule-based approach and making it as passive as possible.Instead of timing SIPs according to highs and lows in the market, invest atregular intervals over an extended period to maximise returns.

2. Always invest in diversifiedfund options

Settinga Systematic Investment Plan (SIP) is an excellent way to save and invest inthe market, but you need to be sure that you have the funds available on time.Choosing a date for your SIP each month is recommended to be comfortable enoughso that you don't miss out. For those who prefer the Electronic Clearing System(ECS) option for their SIPs, it is vital to ensure their bank accounts aresufficiently funded in advance, so there are no problems with paymentprocessing. Additionally, the SIP date should not be too close to one's salarydates, as that can cause unforeseen issues. With this advice in mind, investorswill hopefully have no trouble setting up and managing their SIPs.

Investingin equity funds through a Systematic Investment Plan (SIP) should bestrategically thought out, with a full focus on diversified fund options orflexi cap funds. While thematic, small-cap, mid-cap and sectoral funds may seemattractive on paper due to their higher yields and promising returns, they posegreater risks, too. As changes in the economic cycles tend to impact cheaperstocks more than large ones due to higher volatility, significantunderperformance is likely over a more extended period of time, leading tounwanted stress and financial loss. Hence it is recommended to stay away fromthese funds and invest conservatively in diversified SIPs for better results.

3. Always Choose Growth Plan

Investingin SIPs can be a great way to secure your financial future, but it is importantto understand the options available when choosing between growth and dividendplans. While dividend plans provide the immediate appeal of regular payouts,growth plans offer a more excellent value by automatically reinvesting returnsand compounding them over time. This significantly increases the amount you canpotentially earn over time. Moreover, growth plans are generally more taxefficient than dividend plans, providing another motivation for selecting themover other options. The golden rule is to always opt for a growth plan whenconsidering which plan is right for you.

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