Creating a corpus of Rs 1 crore depends on what age you start and how much you invest every month. Consistency is the key to reaching a goal. A delay of even 10 years can make a big difference because your money gets less time to grow.
Let’s take the example of two people. One starts investing at the age of 25, while the other waits until 35. Both want to accumulate Rs 1 crore by the age of 60. For this calculation, let us assume an annual return of 12 per cent from their investments. The return is only an illustration and is not guaranteed.
If you start an SIP at 25
A person starting at 25 has 35 years, or 420 months, to build the required corpus. At an assumed annual return of 12 per cent, a monthly SIP of around Rs 1,555 can grow to nearly Rs 1 crore by the age of 60.
Over 35 years, the person would invest around Rs 6.53 lakh from their own pocket. The remaining amount would come from the growth of the investment over the years. This is where starting early makes a big difference. The monthly contribution is relatively small because the investment gets more than three decades to compound.
What if you start at 35?
Now consider someone who begins at the age of 35. This person has only 25 years, or 300 months, before turning 60. To reach the same Rs 1 crore goal at an assumed return of 12 per cent, the required monthly SIP rises to around Rs 5,322. In 25 years, the person would invest around Rs 15.97 lakh over these 25 years.
So, by waiting 10 years, the monthly investment requirement increases by around Rs 3,767.
| Starting age | Investment period | Monthly SIP required | Total investment |
| 25 years | 35 years | About Rs 1,555 | About Rs 6.53 lakh |
| 35 years | 25 years | About Rs 5,322 | About Rs 15.97 lakh |
The difference becomes clearer when you look at the total money invested.
The person starting at 25 invests about Rs 6.53 lakh to reach the target. The person starting at 35 needs to put in nearly Rs 15.97 lakh. That is roughly Rs 9.44 lakh more from their own pocket. The monthly SIP requirement is also more than three times higher for the person who starts at 35.
The reason is simple. Money invested at 25 gets much more time to earn returns, and those returns themselves get more time to generate further returns.
Starting small can still help
Many people postpone investing because they feel they cannot spare a large amount every month. But beginning with a smaller SIP can be more useful than waiting several years to start with a bigger amount. You can also increase the SIP as your salary grows. For example, someone may begin with Rs 2,000 or Rs 3,000 a month and gradually raise the amount every year.
What should investors remember?
The 12 per cent return used in this example is only for calculation. Mutual fund returns are market-linked and can be higher or lower, and actual results will depend on the investment chosen and market conditions. But the basic lesson remains the same: time can do a large part of the work for you.
If Rs 1 crore is your long-term goal, starting at 25 instead of 35 can considerably reduce both the monthly SIP and the total amount you need to invest yourself.
Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.