Even if one is earning Rs. 5 lakh a month, having and making Rs.10 Cr in 20 years looks impossible. Why 10 Cr figure when people get happy with 1,2 or 5 Cr. Since this is an achievable figure for each one of us .This article is for those who wants to make a big and better corpus via investing.
Yes, you got me right. I am talking about mutual funds here. With mutual fund compounding magic, anyone can get this figure.
Table of Contents
How to make Rs 10 Crore in 20 years?
Accumulating Rs.10 crore via mutual funds investment requires careful planning and a long-term approach.
While writing my friend Bestii joins in and plans along with me and figures out the recipe to make 10 Crore in 20 years.
Know more about Mutual Funds Beginners Guide To Mutual Fund
Bestii Singh Journey to make 10 Crore in 20 years
Let me take you to journey of Mr.Bestii Singh to make 10 Cr with different options:
Option 1 : 10 Cr with mutual fund Lump Sum investment
Option 2 : 10 Cr with mutual fund SIP Investment
Option 3 : 10 Cr with mutual fund Lump Sum & SIP investment
Option 4 : 10 Cr with Step up SIP investment
But before Bestii could have started investing, he wanted to ensure a few things.
- What return could he expect from mutual fund schemes
- Is his money safe in long term?
Ok, let’s first check the returns of different mutual funds since the last 20 years( annualized Returns.) Although a historic return is no guarantee of future performance.
But definitely Bestii can take a clue from these funds performance history.
Should you also expect this much return from your investments too.
The answer is NO and here no means NO 😀.
The return expectation from equity mutual funds should not be kept very high. Because return is market linked.
Then how much to expect?
A safe return expectation of 10%-12% only.
Confused about Lump sum vs SIP, Here is the guide
Mutual Funds Vs Life Insurance- Which Is Better?
| Fund Name | Annual Return 20 years ( %) |
| Nippon India Growth Fund | 25.3 |
| Franklin India Prima Fund | 24.5 |
| SBI Magnum Global Fund | 22.6 |
| HDFC Flexi Cap Fund | 22.2 |
| ICICI Prudential Long Term Equity Fund | 21.9 |
| Nippon India Vision Fund | 21.9 |
| SBI Contra Fund | 21.9 |
| DSP Equity Opportunities Fund | 21.6 |
| DSP Flexi Cap Fund | 21.4 |
| HDFC Top 100 Fund | 21.2 |
| Aditya Birla Sun Life Flexi Cap Fund | 21.2 |
| Franklin India Flexi Cap Fund | 21.0 |
| SBI Long Term Equity Fund | 21.0 |
| ICICI Prudential Technology Fund | 20.7 |
| SBI Large & Midcap Fund | 20.6 |
| HDFC Tax Saver Fund | 20.5 |
| HDFC Capital Builder Value Fund | 20.5 |
| TATA Midcap Growth Fund | 20.1 |
| Aditya Birla Sun Life MNC Fund | 20.1 |
Option 1 : Lump Sum investment to make 10 Cr
Every investor is different, so is Mr. Bestii Singh. Bestii wants to invest a lumpsum amount to make 10 Cr in the next few years.
The return may vary from fund to fund. But lump sum investment of Rs 1 crore is required to accumulate 10 Crore with mutual funds at a safe return of 12%.
Word of caution, the lump sum amount should be invested cautiously in mutual funds. Learn How To Invest Lump Sum Amount In Mutual Funds?
However, high risk takers can also invest a lower amount ( as given in the table below)
| Initial Lump sum Investment | Return | Time |
| 1 Cr | 12.2% | 20 Years |
| 61 lakh | 15% | 20 Years |
| 36.50 lakh | 18% | 20 Years |
| 26 lakh | 20% | 20 Years |
Option 2 : Mutual fund SIP to make 10 Crore
Mutual Fund Systematic Investment Plan ( SIP) is another way of investing. Small pocket friendly monthly/ quarterly/ half yearly/ yearly payments can do wonder for anyone.
Start a SIP and become a 10 crorepati is other secure way to invest.
Looking at the option 2 (i.e. 10 Cr with SIP), Mr. Bestii changed his mind and gave a thought to monthly investment.
Mutual Fund SIP-Systematic Investment Plan II Step By Step Guide On How To Start A Mutual Fund SIP
How 10,000 SIP For 20 Years Can Make You Rich?
Please note; SIP can be started in yearly, half yearly or quarterly mode also.
| Annual | TIME | ||||
| Return | 10 Years | 15 Years | 20 Years | 25 Years | 30 Years |
| 9% | 513,000 | 262,000 | 149,000 | 89,000 | 54,000 |
| 10% | 484,000 | 239,000 | 131,000 | 75,000 | 44,000 |
| 11% | 456,000 | 218,000 | 114,000 | 63,000 | 35,000 |
| 12% | 430,000 | 198,000 | 100,000 | 53,000 | 28,000 |
| 13% | 405,000 | 180,000 | 87,000 | 44,000 | 22,000 |
| 14% | 382,000 | 163,000 | 76,000 | 37,000 | 18,000 |
| 15% | 359,000 | 147,000 | 66,000 | 31,000 | 15,000 |
Read more: SIP or Mutual Fund – What is the Difference & Example
Can’t Start this much SIP, Don’t worry
How To Become A Crorepati With SIP Investment 5000 Per Month
Option 3 : Lump Sum & SIP to make 10 Crore in 20 years
Investing such a high monthly SIP amount ( refering above table) is not cup of tea for Mr. Bestii at this moment.
But the dream of accumulating 10 Cr is still persistent. If not option 1 and 2 then what’s the other alternatives, asked Mr. bestii to his planner.
So the other way is to invest a lump sum amount along with monthly/ Yearly SIP amount.
Let’s take an easy initial lump sum amount of 10L /20L /30L / 50L/ 1 Cr with monthly SIP.
| Initial investment | Duration of Investment | SIP estimate- Return @12% |
| 10 lakh | 20 years | 90000 |
| 20 lakh | 20 years | 80000 |
| 30 lakh | 20 years | 68000 |
| 50 lakh | 20 years | 45000 |
| 1 Crore | 20 years | 10000 |
Option 4 : 10 Cr with Step up / increasing SIP investment
The above option seems not viable to Bestii, thus he decided to invest on monthly basis only. However SIP amount can be very high with SIP only ( without increasing SIP).
Therefore, he decided to opt for step up his SIPs on yearly basis.
Bestii can achieve his figure of 10 crore with a SIP of Rs 1 lac , Rs. 55000 , Rs 20000, Rs 50000 on monthly basis with no increase in SIP, 10% increase, 22% increase or increase by 10000 respectively.
| Year | Option 1 | Option 2 | Option 3 | Option 4 | ||||
| No change In SIP | SIP Increase @10% | SIP Increase 22% | Increase SIP by 10000 every year | |||||
| SIP 1 lac | SIP 55000 | SIP 20000 | SIP 50000 | |||||
| Monthly SIP | Corpus at Year end | Monthly SIP | Corpus at Year end | Monthly SIP | Corpus at Year end | Monthly SIP | Corpus at Year end | |
| 1 | 100,000 | 1,280,933 | 55,000 | 704,513 | 20,000 | 256,187 | 50,000 | 640,466 |
| 2 | 100,000 | 2,767,239 | 60,500 | 1,568,827 | 24,400 | 601,225 | 60,000 | 1,490,253 |
| 3 | 100,000 | 4,399,127 | 66,550 | 2,620,255 | 29,768 | 1,058,783 | 70,000 | 2,575,908 |
| 4 | 100,000 | 6,237,979 | 73,205 | 3,890,275 | 36,317 | 1,658,260 | 80,000 | 3,927,343 |
| 5 | 100,000 | 8,310,043 | 80,526 | 5,415,137 | 44,307 | 2,436,107 | 90,000 | 5,578,268 |
| 6 | 100,000 | 10,644,898 | 88,578 | 7,236,537 | 54,054 | 3,437,464 | 100,000 | 7,566,665 |
| 7 | 100,000 | 13,275,870 | 97,436 | 9,402,399 | 65,946 | 4,718,146 | 110,000 | 9,935,334 |
| 8 | 100,000 | 16,240,515 | 107,179 | 11,967,756 | 80,454 | 6,347,089 | 120,000 | 12,732,502 |
| 9 | 100,000 | 19,581,152 | 117,897 | 14,995,753 | 98,154 | 8,409,348 | 130,000 | 16,012,515 |
| 10 | 100,000 | 23,345,465 | 129,687 | 18,558,794 | 119,748 | 11,009,755 | 140,000 | 19,836,609 |
| 11 | 100,000 | 27,587,187 | 142,656 | 22,739,840 | 146,093 | 14,277,416 | 150,000 | 24,273,786 |
| 12 | 100,000 | 32,366,866 | 156,921 | 27,633,878 | 178,233 | 18,371,195 | 160,000 | 29,401,802 |
| 13 | 100,000 | 37,752,727 | 172,614 | 33,349,609 | 217,444 | 23,486,438 | 170,000 | 35,308,273 |
| 14 | 100,000 | 43,821,651 | 189,875 | 40,011,345 | 265,282 | 29,863,190 | 180,000 | 42,091,924 |
| 15 | 100,000 | 50,660,266 | 208,862 | 47,761,172 | 323,644 | 37,796,253 | 190,000 | 49,864,006 |
| 16 | 100,000 | 58,366,188 | 229,749 | 56,761,410 | 394,846 | 47,647,472 | 200,000 | 58,749,876 |
| 17 | 100,000 | 67,049,415 | 252,724 | 67,197,396 | 481,712 | 59,860,769 | 210,000 | 68,890,790 |
| 18 | 100,000 | 76,833,892 | 277,996 | 79,280,648 | 587,688 | 74,980,506 | 220,000 | 80,445,918 |
| 19 | 100,000 | 87,859,285 | 305,795 | 93,252,452 | 716,980 | 93,673,941 | 230,000 | 93,594,620 |
| 20 | 100,000 | 100,282,975 | 336,375 | 109,387,935 | 874,715 | 116,758,658 | 240,000 | 108,538,999 |
Do’s & Dont’s before Investing in Mutual Funds
Do’s before Investing in Mutual Funds
- Make a portfolio ( mixture of 4-7 funds) and invest money.
- Set your asset allocation
- Check the track record of the fund, risk ratios, alpha generation and compare with Peer category
- Track your goal amount at least on yearly basis.
- Get in touch with an Financial Advisor
- Get your Portfolio Reviewed on yearly basis.
- In case of lump sum investment, use STP.
- Wherever necessary, do tax harvesting.
- Follow one AMC, one Folio Rule ( otherwise it increases the paper work)
Dont’s before Investing in Mutual Funds
- Don’t invest entire amount in single fund, single AMC.
- Do not stop your investment in between.
- Don’t withdraw in between
Conclusion
Anyone can make good monies with mutual funds. The need is to be consistent and get right advice at the right time.
