Rs 25 Lakh One-time Investment in Mutual Funds: How many years will it take to create Rs 9 crore corpus? Check calculations
Rs 25,00,000 One-time Investment in Mutual Funds: Everyone wants to accumulate a substantial corpus to secure their future, but only a few of them can take risks. And if you can also take risks, then investing in Mutual Funds can be beneficial. It invests your funds in various assets and helps you generate substantial wealth in the long term. One of the best things about mutual fund investment is - you have the option of investing in a lump sum amount or investing monthly. Getting confused? Let us understand what mutual funds are and how they help in accumulating substantial wealth in the long term –
(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.)
What is a Mutual Fund?
A mutual fund is an investment tool that parks funds in various assets like stocks, equity, and bonds on behalf of investors.
Benefits of Mutual Fund
- Compounding benefits
- Diversification
- Rupee cost averaging
- Liquidity
How does compounding work?
The power of compounding is the process of earning interest on interest. It creates a snowball effect that helps your investments grow exponentially over time.
Start early for better returns
Time is the key to getting maximum benefit from mutual funds. The longer the duration of the mutual fund, the greater the compounding benefit. Confused? Let's understand with an example -
Rs 25,00,000 One-time Investment in Mutual Funds: What is the scenario?
Let's suppose you are investing Rs 25,00,000 in mutual funds as a lump sum investment. Your aim is to create a wealth of over Rs 9 crore in the long term.
Can you guess how much time it will take?
Now, can you guess how much time it will take to create a Rs 9 crore corpus with a Rs 25,00,000 one-time investment in mutual funds? Let's calculate and find -
Assuming a 12% annualised return
We are assuming a 12 per cent annualised return rate for all the calculations.
Rs 25,00,000 One-time Investment in Mutual Funds: How many years will it take to create a Rs 9 crore corpus?
As per the calculations, you need to invest for at least 32 years in mutual funds to create a corpus of Rs 9 crore.
Rs 25,00,000 One-time Investment in Mutual Funds: Calculating average capital gain
In these 32 years, you can expect a total of Rs 9,14,54,316 (on average) as capital gains.
Things to remember
It should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.
Rs 25,00,000 One-time Investment in Mutual Funds: Final Corpus Received
Consequently, at the end of 32 years, including the principal investment and capital gain, you will get a total of Rs 9,39,54,316.
Full Calculation Summary
Total Investment Amount: Rs 25,00,000
Capital Gains: Rs 9,14,54,316
Total Approx. Return: Rs 9,39,54,316