Rs. 10,000 investment turned into Rs. 1.50 crore in 10 years! What does it take to generate such returns?

SIPs (systematic investment plans) are ideal for goal-based investing. This feature of SIPs also explains their growing popularity in India. According to an Association of Mutual Funds in India (AMFI) report, the total amount collected by the AMFI via SIP contributions was ₹20,904 crore in May 2024. You can invest ₹10,000 in a mutual fund scheme through SIPs for 10 years to build a corpus of around ₹1.5 crore. Read on to know how to do this and the points that you must keep in mind while following this investment goal. 

How to build a corpus of ₹1.5 crore in 10 years by investing ₹10,000 monthly for 10 years? 

You must keep three points in mind while investing ₹10,000 monthly for 10 years into a mutual fund scheme –

• Use an online mutual fund returns calculator: As the first step, you must use an online SIP returns calculator to calculate your total returns after 10 years. A mutual fund returns calculator is a free online tool that can help you compare the returns offered by more than one mutual fund scheme by inputting the investment amount, duration, and interest rate. In this case, you must enter the monthly SIP amount as ₹10,000 and the investment duration as 10 years. Bear in mind that the calculator might suggest a slightly higher amount to you (monthly SIP amount) as it also accounts for inflation while calculating SIP amounts.

• Identify the right funds that can help you meet your returns-related expectations: Depending on your risk appetite and investment horizon, you can choose a combination of equity-linked instruments and debt-based mutual fund schemes. Equity mutual funds generally pose a higher risk to customers as compared to debt funds. However, they also offer potentially higher returns. To mitigate the overall risk of your investment portfolio, you must invest in a combination of debt and equity mutual fund schemes via SIP. 

• Assess your risk appetite and liquidity-related preferences while investing: You must consider the taxation of the capital gains that you will earn from your mutual fund investments, the risk that they pose, and your liquidity-related expectations too. ELSS funds, for instance, can help you earn high returns in the medium-to-long term, but they come with a 3-year lock-in period. They also offer tax benefits to the customer. You must, therefore, weigh the pros and cons of any investment scheme before deciding to invest in it. 

• Step up your SIP contributions: The value of your financial goals will increase as time passes. They will get more expensive. To catch up with inflation and prepare for these increasing prices, you must step up your SIP contributions regularly. You can use a step-up SIP calculator to increase your SIP contributions by a fixed amount or percentage. 

Points that you must consider before investing in a mutual fund

Here are some points that you must consider before investing in a mutual fund scheme –

• Note down your financial goals and keep revisiting them to check if your investments are helping you achieve those goals.
• Use an online SIP returns calculator to plan for your mutual fund investments. 
• Do not discontinue your SIP investments due to short-term market volatility. 
• Keep reassessing your mutual fund investments and increase them by a fixed percentage or amount after a few months. 

In conclusion, you can certainly build a corpus of around ₹1.5 crore by investing ₹10,000 in a mutual fund scheme in a disciplined manner monthly. You should use a mutual fund returns calculator to check if you might have to increase your SIP contributions after a few months to meet this goal. Planning your SIP investments by using a mutual fund calculator will help you earn higher returns.