To Earn Rs1 Crore, How Much Investment is Needed in Mutual Funds?

To Earn Rs1 Crore, How Much Investment is Needed in Mutual Funds?

There are many questions you should ask yourself when looking at investment options that will allow you to reach a certain amount. First, determine the timeframe within which you wish to reach your goal. Secondly, understand your risk profile. The risk profile will affect your fund selection strategy. It will determine whether you are willing to make high-risk investments in order to earn high returns, or if you prefer moderate risk.

Let's find out how much your monthly SIP should cost if you have 1 crore to pay in one year, five years, and twelve years.

Case Study 01: The investment horizon is one year

Let's assume that the expected rate for your returns to reach this corpus is 6.5%.

To reach 1 Crore per year, you will need to make a monthly SIP in the SIP calculator.

Monthly Investment Amount = Rs 900000

Number of Years= 1
6.5% Expected Returns

The Total Value of the Investment at End of Tenure = Rs 958500

Liquid funds are a good option if you want to increase your wealth over a shorter time. You have instant access to your investments and no exit cost. Within 1-2 days of the request, the redeemed amount is credited to your account. These are the top liquid funds to invest in to reach your goal based on past performance.

Case Study 02: The investment horizon is between Three to Five years

It is recommended to invest in large-cap funds or hybrid funds if you have a time horizon of at least three years. Large-cap funds can be a good choice for investors who are looking to get exposure to equity but are cautious about taking on risks. The duration of these funds is only 5 years. This may increase the risk of being exposed to small-cap or mid-cap funds. These schemes are able to withstand market slowdowns because they invest in large-cap financially strong companies.

Hybrid funds are another type of fund you can invest in. These funds offer higher returns than debt, but they are safer than equity. They are a great option for investors who take low risks and those who invest for short- to medium periods. These funds allow investors to have just the right amount of exposure to equity while protecting them from extreme market volatility that can be caused by debt funds.

Let's assume that your expected rate of return for investments over a medium-term period is 9%.

You would need to set up a monthly SIP, which is approximately Rs 130000 per month, in order to accumulate Rs 1 crore over 5 years with a 9 % expected return.

Monthly Investment Amount = Rs 130000
Number of Years = 5
Expected Returns = 9%

The Total Value of the Investment at End of Tenure = Rs 958500

These are the top large-cap and hybrid funds that you can invest in to help you reach your goal.

Case Study 03: The investment horizon is longer than Five years.

A diversified equity portfolio with multi-cap, small-cap, and mid-cap funds will create long-term wealth for those who have a longer investment horizon.

Let's say you want to build a corpus of Rs 1 crore in 10 years. The expected return rate is 11. To reach your goal, you will need to set up a monthly SIP at Rs 47,500.

Monthly Investment Amount = Rs 47000
Number of years= 10 Years 
Expected Returns = 11%

The Total Value of the Investment at End of Tenure = Rs 10919937

These are the top multi-cap, small-cap and mid-cap funds you can have in order to build a 1 Crore portfolio in 10 years.

It is possible to become a crorepati if you choose the right funds based on your risk profile and time horizon. You just need to stick to your asset allocation, and keep investing!

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