Want ₹1 crore in the next 10 years? Here's how much you need to invest in SIP

Long-term wealth creation typically requires consistent investing. Wealth advisors often recommend opting for a systematic investment plan (SIP) over a lump sum for the benefit of rupee cost averaging. This means when you invest via SIP, you acquire mutual fund units at different price points, thus maximising the chances of earning higher returns.

Let us suppose you have a financial goal of ₹1 crore in the next 10 years – how much monthly investment in mutual funds would you require to achieve it?

Notably, it would be inversely proportional to the return on investment. The higher the return, the lower the SIP requirement. For instance, you would need a lower SIP when the return on your investment is 12% vis-a-vis when it is 10%.

SIP for ₹1 crore

Back to our case study. If you need ₹1 crore in the next 10 years, the amount of SIP that you would need depends on the rate of return on your investment.

Let us suppose the annual rate of return on your investment varies between 9% and 13%. When the annualised rate of return is 9%, you would need an SIP of ₹51,676, thereby needing a total investment of ₹62.01 lakh over the next decade to save ₹1 crore by 2035.

(Source: MF SIP calculator)

If the annualised rate of return on your investment is 10%, you would need an SIP of ₹48,817 to accumulate ₹1 crore, thus requiring a total of ₹58.58 lakh.

At the same time, if the rate of return is marginally higher at 11% per annum, you would need an SIP of ₹46,083, thereby investing a total of ₹55.30 lakh over a 10-year period, shows the SIP calculator.

Meanwhile, if the mutual funds you are investing in deliver a better return of 12% a year, the monthly SIP would be ₹43,471. In this scenario, your total investment would be ₹52.17 lakh.

Finally, if the rate of return is 13% per annum, you would need a relatively smaller SIP of ₹42,320 to be able to accumulate ₹50.80 lakh

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.

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