How to create a fund of 1 crore for your money goals?

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.

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