Want to be a crorepati? Here's how to plan your investments over long term

As per your earnings and financial goal you should decide an amount which you can park in a savings instrument regularly without fail. The amount should be decided depending on your financial target, duration and ability to invest regularly.

You can start SIP with as low as Rs 1,000-5,000 per month.

Dreaming about becoming a crorepati is not unrealistic and you can become a crorepati with a disciplined financial routine as well as little planning. Your small investments over the years can turn into a corpus of more than one crore rupees, but you need a systematic plan to achieve this goal. You can even start saving with as low as Rs 1,000-5,000 per month.

There are various investment options available that attract investors to create assets through systematic planning and choosing the right instrument for savings.

To get on track to achieve your goal of becoming a crorepati one needs to be careful about factors like how much to invest and on what instruments, along with the tenure. It’s important to invest a regular amount in the suitable investment option.

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Here are a few factors to consider carefully before choosing the investment option.

How much to invest and for how long to achieve your goal of being a crorepati

As per your earnings and financial goal you should decide an amount which you can park in a savings instrument regularly without fail. The amount should be decided depending on your financial target, duration and ability to invest regularly.

The table below shows that even a small amount can yield a bigger reward over the years. The below-mentioned table implies an example of an investment for 25 years at a 12 per cent rate of interest per annum.

Amount Invested (Rs)/month (rate of interest 12% per annum )	Total Investment (Rs)	Total Return after 25 years (Rs)
5,000	15,00,000	94,88,175
10,000	30,00,000	1,89,76,351
15,000	45,00,000	2,84,64,526
20,000	60,00,000	3,79,52,702
25,000	75,00,000	4,74,40,877

Total returns on investments for 5, 10, 15 years

Amount Invested (Rs)/month (rate of interest 12% per annum )	5 years	10 years	15 years
10,000	8,24,864	23,23,391	50,45,760
15,000	12,37,295	34,85,086	75,68,640
20,000	16,49,727	46,46,782	1,00,91,520
25,000	20,62,159	58,08,477	1,26,14,400

Where to invest

It’s important for an investor to ensure that the long-term financial plan is returning the benefits effectively. There should be a balance in the schemes and one needs to evaluate the risk and balance the gains over multiple investment avenues. Systematic Investment Plan (SIP) in mutual funds could be an ideal option to achieve your financial goal.

SIP in Index Mutual Funds: In Index mutual funds, start by investing through SIP. For example, 20 percent of the monthly investment the risk involved is low, and returns are expected at 10–12 percent.

SIP in Equity Mutual Funds: In Equity mutual funds, if one invests 30 percent of the monthly investment, the returns are expected to be 14–17 percent. The right equities to pick will be large- cap and mid-cap. The risks are relatively moderate to high.

SIP in Balanced Mutual Funds: The risk range will be from low to moderate in balanced funds with expected returns of 12–14 percent.

Investment in Bank Recurring Deposits: If 30 percent of the monthly investment is parked in this instrument, the return is expected to be around 7 percent with no to low risk.

Benefit of compounding

While investing, compounding is what makes it all so simple to grow the money. It is the percentage of money that one can earn on top of their original investment, along with their earnings from previous periods. It can be calculated by the bank or any financial institution.

For example, if an investor deposited Rs 100 in a savings account at 10 per cent interest annually, after a year, A would have Rs 110 in that savings account, and after two years of getting it compounded, A would have turned into Rs 121.

Eventually, after 10 years of compounding at a rate of 10 per cent, the Rs 100 deposit would grow to Rs 259.37. That is how compounding works, increasing the investment over time.

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