How Much Time It take to Get Crorepati Status Using Systematic Investment Plans (SIPs)

How Much Time It take to Get Crorepati Status Using Systematic Investment Plans (SIPs)

Prajwal Wakhare

Systematic Investment Plans (SIPs) allows investors to achieve financial goals like becoming a crorepati through regular and step-up SIP investments.

Systematic Investment Plans (SIPs) are a method of disciplined investing, where investors regularly invest a fixed amount in mutual funds. Over time, this approach helps in building substantial wealth by leveraging compounding.

Compounding plays a critical role in wealth creation. By consistently reinvesting returns, the accumulated wealth grows over time. Investors are encouraged to begin investing early to maximize benefits.

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Different SIP Amounts and Timeframes
The time taken to reach financial goals depends on the monthly SIP contributions. The following tables show timelines for achieving milestones using simple SIP and step-up SIP methods.

Simple SIP Milestones

Simple SIP
/month

Time to
reach 1 crore

Time to
each 2 crores

Time to
reach 5 crores

Time to
reach 10 crores

Rs  10,000

20 Years 1 Month

25 Years 5 Months

32 Years 10 Months

38 Years 7 Months

Rs  20,000

15 Years

20 Years

27 Years 3 Months

32 Years 10 Months

Rs  25,000

13 Years 5 Months

18 Years 4 Months

25 Years 5 Months

31 Years 3 Months

Rs  50,000

9 Years 2 Months

13 Years 5 Months

20 Years

25 Years 5 Months

Rs  75,000

7 Years 1 Month

10 Years 10 Months

17 Years

22 Years 3 Months

Rs  1,00,000

5 Years 10 Months

9 Years 2 Months

15 years

20 Years

Considerations: 12 per cent annual CAGR

Step-Up SIP Milestones

Step Up SIP
(10 per cent)
/month

Time to
reach 1 crore

Time to
reach 2 crores

Time to
reach 5 crores

Time to
reach 10 crores

Rs  10,000

15 years 10 months

20 years 1 month

26 years 1 month

30 years 11 months

Rs  20,000

12 years 10 months

15 years 10 months

21 years 6 months

26 years 1 month

Rs  25,000

10 years 10 months

14 years 7 months

20 years 1 month

24 years 7 months

Rs  50,000

7 years 8 months

10 years 10 months

15 years 10 months

20 years 1 month

Rs  75,000

6 years 1 month

8 years 11 months

13 years 7 months

17 years 7 months

Rs  1,00,000

5 years 1 month

7 years 8 months

12 years

15 years 10 months

Considerations: 10 per cent annual step up in SIP amount and 12 per cent annual CAGR

Be Realistic with Expectations
Investors should consider the risks involved. While historical data suggests a 12 per cent annual return, market conditions may fluctuate.

Step-Up SIP for Faster Results
Increasing the SIP contribution by 10 per cent annually, known as step-up SIP, helps achieve financial goals faster. This method allows for higher returns as income levels rise.

Long-Term Commitment and Regular Reviews
Reaching a target like Rs 1 crore requires long-term dedication. Regularly reviewing and rebalancing the investment portfolio ensures that it aligns with changing market conditions and personal financial situations.

Impact of Inflation
The purchasing power of Rs 1 crore will reduce over time due to inflation. This factor should be accounted for when setting financial goals.

Tax Planning and Professional Advice
Investors should consider tax implications and consult financial advisors for proper tax strategies and fund selection. A well-planned portfolio ensures efficient wealth accumulation.

Disclaimer: The article is for informational purposes only and not investment advice.

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