CAQM13 min ago
Power of Rs 9,99,999 One-time Investment in Mutual Fund: In how much time can your lump sum investment generate over Rs 9,00,00,000 corpus?
- Written by ZeeBiz WebTeam
Published: Zee Business| Updated: Zee Business
Power of Rs 9,99,999 One-time Investment in Mutual Funds: Mutual funds are an asset class that invests money in various assets like stocks, equities and bonds on behalf of investors. There are many advantages of investing in mutual funds, such as compounding benefits, diversification, rupee cost averaging, liquidity and many more.
Compounding benefits: It is a process in which you will earn capital gain not only on the principle amount but also on the capital gain earned earlier.
Diversification: It is a risk management strategy whereby investments are spread across different asset classes, sectors and geographies to reduce the impact of poor performance of any one security.
Rupee cost averaging: It is an investment strategy where a fixed sum is invested in mutual funds at regular intervals.
Liquidity: It refers to the ease and speed with which you can convert your investment into cash.
Therefore, strategic investment in mutual funds can be beneficial if you are looking for investment ideas.
Now, there are two types of investments in mutual funds: lump sum investment/lump sum investment and monthly investment. In this write-up, we will try to explain how your one-time investment in a mutual fund can grow significantly when you stay invested for the long term.
Let's assume you are making a one-time investment of Rs 9,99,999 in mutual funds and aiming to create a corpus of over Rs 9 crore. Now, can you guess how much time it will take? Let's calculate and find -
Image Source: AI-Generated and Getty Images
(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.)
1/6
Lump Sum Investment in Mutual Funds: Assuming a 12% annualised return
1/6For all calculations, we are assuming a 12 per cent annualised return rate.
2/6
Rs 9,99,999 One-time Investment in Mutual Fund: How many years will it take to build a corpus of over Rs 9 crore?
2/6To create a corpus of over Rs 9 crore with a Rs 9,99,999 one-time investment, one needs to invest for at least 40 years in mutual funds, according to the calculations.
3/6
Rs 9,99,999 One-time Investment in Mutual Fund: Calculating average capital gains
3/6One can expect a total of Rs 9,20,50,878 (on average) as capital gains by making a one-time investment of Rs 9,99,999 in mutual funds for 40 years.
4/6
Mutual Fund Returns on Lumpsum Investment: Actual amount may vary
4/6However, it should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.
5/6
Lump sum investment in mutual funds: How much will Rs 9 lakh become in mutual funds in 40 years?
5/6Consequently, at the end of 40 years, you will get a total of Rs 9,30,50,877 (approx.). This includes the principal investment and capital gain.
6/6
Power of One-time Investment in Mutual Fund: Full calculation summary
6/6Total Investment Amount: Rs 9,99,999 Capital Gains: Rs 9,20,50,878 Total Approx. Return: Rs 9,30,50,877
- 1
- 2
- 3
- 4
- 5
- 6