If one starts with equity oriented 2,500/month SIP and increases it by 50% every year for a period of 10 years, can he expect 1 crore corpus?

Author
Anmol Gupta

I have created an spreadsheet for you here. You can play around with the numbers here and see it for yourself.

So you are investing 2500/- through SIP in equity oriented funds, which will increase by 50% each year i.e. next year you will invest 3750/-, then 5625/- 2 years from now and so on.

Assuming a rate of return of 12%, the corpus at the end of 10 years will be ~47 Lakh (4.7 million). To generate 1 Crore with such an arrangement, you need to start with ~5300/- per month at 12% return.

By starting with 2500/- per month, you almost need 39% per annum returns on your investments which is not really possible for 10 years.

Hope it helps.

Originally answered on Quora.

 


About the Author
Anmol Gupta
Anmol is CEO at 7Prosper. He is SEBI Registered Investment Adviser, with expertise in Finance and Technology domains. Anmol is committed to help people achieve their financial freedom.

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