₹10 crore in 15 years: Can your SIP really grow that much? How much should you invest every month? Check out the maths

Aman, a 30-year-old with a high-salary corporate job, wants 10 crore. He hopes to reach this target within the next 15 years. Assuming mutual fund returns average 12% annually, the maths reveals interesting possibilities.

Under a flat SIP approach, Aman would need substantial monthly investments. Starting at age 30, he’d invest for a full 15 years.

This requires around 2 lakh per month throughout the period. Total invested capital would reach roughly 3.6 crore over time. Investment gains would contribute an additional 6.4 crore towards the target. Together, these would build the desired 10 crore corpus.

Also Read | Investing in market crash: Why stop SIPs during bloodbaths on Dalal Street?

However, a step-up SIP might prove more realistic for someone like Aman. Given that corporate incomes typically increase over time, this approach makes way more sense.

Aman could start with a smaller monthly investment initially. This would start at around 1.15 lakh per month in the first year. Increasing contributions by 10% annually would gradually raise this amount. By the 15th year, the monthly SIP would reach around 4.37 lakh.

Under this step-up model, the total investment amounts to around 4.39 crore. Investment gains would then contribute roughly 5.61 crore towards the goal. Combined, these figures would similarly reach the 10-crore target.

Can someone in a corporate job save that much for investment in 2041? Well, Aman can put away 1.15 lakh every month now in 2026. There is every possibility that he’ll grow in his career so much that he can do an SIP of 4.37 lakh in his mid 40s.

Also Read | Employees’ Provident Fund is better than stock market, EPFO explains why

Assumed returns significantly affect required monthly investments across different scenarios. At 8% annual returns, a monthly SIP would need to reach 2.87 lakh. Total investment under this scenario would total about 5.17 crore.

At 10% returns, the monthly SIP drops to roughly 2.39 lakh instead. Total investment here would reach approximately 4.31 crore.

At 12% returns, the monthly SIP requirements fall further to 1.98 lakh. Total investment would then total around 3.57 crore.

Higher return assumptions of 14% reduce requirements even further. Monthly SIP would drop to roughly 1.63 lakh under this scenario. At 15% returns, the monthly SIP falls to around 1.48 lakh.

Also Read | ‘Take something’: Startup founder urges entrepreneurs to pay themselves

Assume conservative return

Financial planners generally suggest basing goals on more conservative return assumptions. Relying on 14-15% returns carries considerably more risk. Instead, planning around 10-12% scenarios offers a more sensible approach.

One crucial reality check involves inflation’s impact on future purchasing power. At 6% inflation, 10 crore will lose significant value after 15 years. Its purchasing power would resemble roughly 4.2 crore in today’s terms.

Therefore, achieving today’s equivalent purchasing power requires a much larger target. This adjusted goal would need approximately 24 crore instead.

Disclaimer: These projections remain pre-tax and exclude several important real-world factors. Fund expenses, capital gains tax, and contribution pauses aren’t accounted for here. Market returns also rarely remain as consistent as these calculations assume.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *