Home in Mumbai with SIP: If You Had Invested 20% of Your Salary Since 2000 in SIP, Could You Buy Your Dream Home in Bandra?

As a young 25-year-old stepping into the financial capital of India in the year 2000, you had a simple yet powerful dream – to one day own a home in Bandra (West), Mumbai

Having an owned home is the most cherished dream for many Indians. It is also one of the top financial goals for those who don’t yet have a place to call their own. While some opt for home loans and commit to years of EMIs, others dream of a path that doesn’t come with the burden of monthly repayments. They want to build their home on the foundation of smart, patient investing.

Consider yourself among those who choose a different path – not the one paved with EMIs payments, but the one that builds wealth quietly, over time. For this you decided to invest a lump sum into a well-chosen mutual fund.

As a young 25-year-old stepping into the financial capital of India in the year 2000, you had a simple yet powerful dream – to one day own a home in Bandra (West), Mumbai. With an annual salary of Rs 1.45 lakh, you had clarity and commitment. You set a financial goal and decided to invest 20 per cent of your monthly salary through SIPs in a mutual fund. Year after year, your income steadily grew at an average pace of 10 CAGR per cent and by 2024, your annual salary reached approximately Rs 14.28 lakh.

Here's the breakdown of the first year (2000) and the last year (2024) based on 20 per cent SIP contribution and 10 per cent salary growth:

Year 2000 (Starting Year)

-        Annual Salary: Rs 1,45,000

-        Annual SIP Investment (20 per cent of Salary): Rs 29,000

-        Monthly SIP: Rs 2,416.67

Year 2024 (Final Year)

-        Annual Salary: 14,28,211.24

-        Annual SIP Investment (20 per cent of Salary): Rs 2,85,642.25

-        Monthly SIP: Rs 23,803.52

You stayed disciplined for almost 24 years, letting your SIPs quietly work in the background. Fast forward to December 2024, you decided to redeem your mutual fund corpus which would have been worth about 2.13 crore, compounding at 18 per cent CAGR.

Now comes the moment you have been patiently working towards all these years – the dream that’s lived rent-free in your heart: owning a home in Bandra (West). Like most Indians, your idea of a perfect home is a 2BHK apartment with amenities. But can your investment journey help you to achieve your dream?

As per property listings on Housing.com and 99acres, the average rate in Bandra (West) today hovers around Rs 59,000 per square foot. For a 2BHK of 600 sq. ft, that works out to Rs 59,000 * 600 = Rs 3.54 crore.

Turns out, the corpus you patiently built over two decades, though impressive at over Rs 2 crore – is still not what you need today to buy that dream home in Bandra (West). It’s a sobering reminder of how real estate prices, especially in prime locations, often outpaced even well-planned investments. But all is not lost. You still have options.

One path is to use your accumulated corpus as a hefty down payment and take a home loan for the remaining amount. The other is to recalibrate the dream slightly – perhaps considering charming neighbourhoods where the budget fits. After all, buying your own house is the top most priority. 

Note: The numbers presented here are based on assumptions for illustrative purposes and may vary in reality.  

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