How to create a fund of 1 crore. For most of the population, 1 Crore is a magic figure, or if you cannot relate to it, how about the word ‘Crorepati’? still, for many, it might not be such fascinating a number. Whatever it is, no one can deny that a sum of 1 Crore as a liquid asset is quite admirable and a dream come true for many even today.
And the best part is that anyone with a decent income and disciplined approach to investing can easily create a disposable fund of 1 Crore.
If you are not impressed by the target you can set a bigger target as desired and still you can achieve it simply by following any route as below depending upon your risk-taking ability.
1. Regular monthly SIP into mutual funds.
If you have to create a corpus of 1 Crore within 15 years, assuming a return of 10% from the fund, you have to do a SIP of 25,000 per month.
2. Step-up SIP into mutual funds.
If a SIP of 25000 per month is beyond your budget at present, you can still create that 1 crore corpus in 15 years. You need to start with a SIP of 14,000 per month and increase the SIP amount by 10% every year to create that 1 Crore corpus.
3. Regular monthly savings into Endowment plans.
People with conservative risk appetites who do not want to invest in equities can create 1 crore using an endowment insurance plan which provides a safe investment option along with life cover. Let’s take the example of a plan offered by LIC of India. By saving only 500 per day for 16 years you can create a maturity amount in the range of 1 Crore at the end of the 25th year at current bonus rates, along with insurance cover for the full period of 25 years.
4. A combination of mutual funds and endowment plans.
You can combine the benefits of a mutual fund (growth and opportunity) and a LIC plan (safety and disciplined savings) to create a substantial corpus. You can start with a SIP of 10,000 per month and increment it by 10% every year for 15 years and save 500 per day (15000 per month) in the endowment plan discussed above for 16 years, to create more than 1 crore each at the end of the 20th and 25th years and also have an insurance cover for the period of 25 years.
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute professional advice. While full efforts have been made to ensure the accuracy of data and numbers, no responsibility is taken for any errors or omissions. Tax implications on insurance, investments and returns from related products may change due to updates in tax laws. Always consult with your financial advisor or insurance expert before making any investment or insurance decisions. The author is not responsible for any financial losses or damages incurred as a result of relying on the information in this blog.
Disclaimer: Mutual fund investments are subject to market risk. Read all scheme related documents before investing.
