Power of Rs 10 Lakh Mutual Fund Investment: Mutual fund investors can invest in a scheme through two methods—lump sum and systematic investment plan (SIP). While in a lump sum, an investor invests an entire sum one time; SIP is a periodic investment. Both investments can create multiple times returns if one lets their investments grow for a long time.
However, equally important is to select the mutual fund scheme carefully and revise the strategy if their investments are underperforming in the long run.
A careful selection and a good strategy can give handsome returns in the long run. If you invest a Rs 10 lakh amount, know in how many years it can grow to Rs 3 crore, Rs 4 crore and Rs 5 crore.
Lump sum investment for long run
If one invests a lump sum amount in a mutual fund scheme for the long run, the results can be outstanding because of the power of compounding.
Let’s assume an investor has an Rs 8 lakh lump sum amount in hand.
They want to invest and expect a 12 per cent annualised return from it, here’s what they can get in 10, 20, 30 and 40 years.
In 10 years, estimated capital gains will be Rs 16,84,679, and the estimated corpus will be Rs 24,84,679.
In 20 years, estimated capital gains will be Rs 69,17,034, and the estimated corpus will be Rs 77,17,034.
In 30 years, estimated capital gains will be Rs 2,31,67,938, and the estimated corpus will be Rs 2,39,67,938.
In 40 years, estimated capital gains will be Rs 7,36,40,776, and the estimated corpus will be Rs 7,44,40,776.
Calculations for story
We will calculate how, at a 12 per cent annualised return, a Rs 10 lakh lump sum investment in a mutual fund scheme can grow to Rs 3 crore, Rs 4 crore and Rs 5 crore.
From Rs 10 lakh investment to Rs 3 crore corpus
It will take an estimated 30 years to create an Rs 3 crore corpus.
In 30 years, estimated capital gains will be Rs 2,89,59,922, and the estimated corpus will be Rs 2,99,59,922.
From Rs 10 lakh investment to Rs 4 crore corpus
It will take an estimated 33 years to create a Rs 4 crore corpus.
In 33 years, estimated capital gains will be Rs 4,10,91,533, and the estimated corpus will be Rs 4,20,91,533.
From Rs 10 lakh investment to Rs 5 crore corpus
It will take an estimated 35 years to create a Rs 5 crore corpus.
In 35 years, estimated capital gains will be Rs 5,17,99,620, and the estimated corpus will be Rs 5,27,99,620.
(Disclaimer: These are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.)
