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Power of Rs 30,00,000 One-time Investment in Mutual Fund: In how much time can your lump sum investment generate Rs 6.3 crore corpus at 12%?
- Written by Priya Vishwakarma
Published: Zee Business| Updated: Zee Business
Power of Rs 33,00,000 One-time Investment in Mutual Funds: When it comes to investing money for future needs, there are many investment options available in the market. However, some people prefer to invest a lump sum amount rather than monthly basis. For such individuals, strategic investing in mutual funds can be beneficial. This is because a well-planned investment approach can help you meet major life goals – such as buying a home, funding your children's higher education, or preparing for retirement. One of the investment options is mutual funds. They are an asset class that invests money in various assets like stocks, equities and bonds on behalf of investors.
In this write-up, we will try to explain how your investments can grow significantly when you stay invested for the long term.
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(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.)
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Benefits of investing in mutual funds
1/10There are several benefits of investing in mutual funds, which include the following: - Compounding benefits - Diversification - Rupee cost averaging - Liquidity
What is the power of compounding? Compounding is a process in which you earn interest on the interest earned. The power of compounding creates a snowball effect that helps your investments grow exponentially over time.
Time is the key The longer the SIP duration, the greater the compounding benefits.
Power of Rs 30,00,000 One-time Investment in Mutual Funds Let's assume you're investing a lump sum of Rs 30,00,000 in mutual funds and want to build a corpus of over Rs 6.3 crore. Now, can you estimate how long it will take? Let's do the math and find out:
One-time Investment in Mutual Funds: Assuming a 12% annualised return For all the calculations, we are assuming a 12 per cent annualised return rate.
How many years will it take to create a Rs 6.3 crore corpus ? As per calculations, to create a corpus of over Rs 6.3 crore with a lump sum investment of Rs 30,00,000, you need to invest in mutual funds for at least 27 years.
Calculating average capital gain Over 27 years, you can expect to receive a total capital gain of Rs 6,09,74,642 on an average.
Actual amount may vary It should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.
What will Rs 30 lakh become in 27 years in mutual fund? Consequently, at the end of 27 years, including the principal investment and capital gain, you will get a total of Rs 6,39,74,642.
Full Calculation Summary Total Investment Amount: Rs 30,00,000 Capital Gains: Rs 6,09,74,642 Total Approx. Return: Rs 6,39,74,642
2/10
What is the power of compounding?
2/10Compounding is a process in which you earn interest on the interest earned. The power of compounding creates a snowball effect that helps your investments grow exponentially over time.
3/10
Time is the key
3/10The longer the SIP duration, the greater the compounding benefits.
4/10
Power of Rs 30,00,000 One-time Investment in Mutual Funds
4/10Let's assume you're investing a lump sum of Rs 30,00,000 in mutual funds and want to build a corpus of over Rs 6.3 crore. Now, can you estimate how long it will take? Let's do the calculation and find out:
5/10
One-time Investment in Mutual Funds: Assuming a 12% annualised return
5/10For all the calculations, we are assuming a 12 per cent annualised return rate.
6/10
How many years will it take to create a Rs 6.3 crore corpus ?
6/10As per calculations, to create a corpus of over Rs 6.3 crore with a lump sum investment of Rs 30,00,000, you need to invest in mutual funds for at least 27 years.
7/10
Calculating average capital gain
7/10Over 27 years, you can expect to receive a total capital gain of Rs 6,09,74,642 on an average.
8/10
Actual amount may vary
8/10It should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.
9/10
What will Rs 30 lakh become in 27 years in mutual fund?
9/10Consequently, at the end of 27 years, including the principal investment and capital gain, you will get a total of Rs 6,39,74,642.
10/10
Full Calculation Summary
10/10Total Investment Amount: Rs 30,00,000 Capital Gains: Rs 6,09,74,642 Total Approx. Return: Rs 6,39,74,642
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