Summary of this article
Lump sum grows faster with longer investment horizon.
SIP builds Rs 5 crore with consistent monthly contributions.
Step-up SIP reduces initial burden, increases with salary growth.
Making Rs 5 crore in mutual funds isn’t as impossible as it sounds. It all depends on how much you invest, how long you stay invested, and the returns you get. Let’s take a look at how much you actually need to invest if you invest a lump sum amount or via a systematic investment plan (SIP) to accumulate Rs 5 crore in a given time period.
How To Build Rs 5 Crore Corpus With Lumpsum Investments?
If you have a good chunk of money to invest upfront, a lump sum can grow quickly thanks to compounding. For example, to reach Rs 5 crore in five years, you would need about Rs 3.10 crore if your funds give you a 10 per cent annual return. If we push the returns a bit higher to 12 per cent, you would need Rs 2.84 crore. At 14 per cent, it comes down to Rs 2.60 crore.
Time really makes a difference. Stretch this investment to ten years, and the required amount drops to between Rs 1.93 crore and Rs 1.61 crore, depending on returns. Over twenty years, it’s even more dramatic. You only need around Rs 74 lakh at 10 per cent or Rs 36lakh at 14 per cent. This shows why starting early is so important.
How To Build Rs 5 Crore Corpus With Investments Via SIP?
If you don’t have a huge amount to invest upfront, monthly SIPs are a great way to build a big corpus over time. To get Rs 5 crore in ten years, you would need to put in about Rs 2.44 lakh per month at 10 per cent returns. With 12 per cent returns, it drops to Rs 2.17 lakh, and with 14 per cent, Rs 1.93 lakh. But if you extend the horizon, it becomes much more manageable.
Over fifteen years, the SIP comes down to Rs 1.21 lakh per month at 10 per cent and Rs 82,000 at 14 per cent. Over thirty years, you could reach the same Rs 5 crore by investing just Rs 22,000 a month at 10 per cent or Rs 7,200 at 15 per cent. The key is consistency. Small amounts invested regularly for a long time can grow into huge sums.
How To Build Rs 5 Crore Corpus With Step-Up SIPs?
Step-up SIPs make things even easier, especially for salaried people whose income grows over time. With a 5 per cent annual increase in SIP, to reach Rs 5 crore in ten years at 10 per cent, you would start at around Rs 1.97 lakh per month. If you increase the SIP by 10 per cent every year, that is a step up of 10 per cent p.a., you can start lower at Rs 1.54 lakh. Stretch this to twenty years, and the monthly contribution at 5 per cent step-up is Rs 45,000, while at 10 per cent step-up, it’s just Rs 28,000. For more numbers, refer to the table given below.
The takeaway from the calculations is simple. Time and discipline matter more than anything. The earlier you start, the smaller your investments need to be, whether it’s a lump sum, a regular SIP, or a step-up SIP. Higher returns help, but even modest returns can create huge wealth if you stay invested long enough.
