Compounding is the eighth wonder of the world. We walk you through a realistic retirement plan using SIPs, NPS, and goal-based investing to reach ₹1 Crore.
The Math of Compounding
Can you really reach ₹1 Crore by investing just ₹5,000 a month? Yes, but it requires patience. Assuming an average annual return of 12% in equity mutual funds:
- In 10 years: You invest ₹6 Lakhs, its value becomes ~₹11.6 Lakhs.
- In 20 years: You invest ₹12 Lakhs, its value becomes ~₹50 Lakhs.
- In 26 years: You invest ₹15.6 Lakhs, its value crosses ₹1 Crore!
Accelerate the Process with Step-Up SIPs
Waiting 26 years is a long time. By using a 'Step-Up SIP'—increasing your SIP amount by 10% every year as your salary grows—you can reach the ₹1 Crore milestone in under 18 years.