Power of Rs 4,50,000 One-time Investment: How your Rs 4.50 lakh lump sum deposit can generate corpus worth Rs 3 crore in long term

We will show how investment grows when one gets a high return and when they stay in their investment for a long time. In our example, we will show how much extra corpus a Rs 5,00,000 one-time investment can give if it grows at 15 per cent annualised instead of 12 per cent in 30 years.

At a 12 per annualised return, estimated capital gains will be Rs 1,44,79,961; the estimated corpus will be Rs 1,49,79,961. However, if the annualised growth is 15 per cent, estimated capital gains will be Rs 3,26,05,886 and the estimated corpus will be Rs 3,31,05,886.

This difference is because of the compound return on investment. Just a 3 per cent extra investment makes a huge difference in the long term.

Now see if a Rs 5,00,000 investment is growing at 10 per cent annualised growth, what a 5- and 10-year difference can make in corpus. If the amount is invested for 35 years, estimated capital gains will be Rs 1,35,51,218, and the estimated corpus will be Rs 1,40,51,218.

If the amount invested for 30 years, estimated capital gains will be Rs 82,24,701, and the estimated corpus will be Rs 87,24,701. If the amount invested for 25 years, estimated capital gains will be Rs 49,17,353, and the estimated corpus will be Rs 54,17,353.

Now, here is an example of how a Rs 2,00,000 investment can create a corpus larger than the one created from a Rs 10,00,000 investment in the long term if both grow at a 12 per cent annualised return. If a Rs 2,00,000 investment is made for 35 years, it will give estimated capital gains of Rs 1,03,59,924 and the estimated corpus of Rs 1,05,59,924.

If a Rs 10,00,000 investment is made for 20 years, it will give estimated capital gains of Rs 86,46,293 and the estimated corpus of Rs 96,46,293. This is how you can see that a smaller investor can create a larger corpus if they get more years of compound growth compared to a larger investment. 

Now, going by the same logic, an investor can create a Rs 5 crore corpus at a 12 per cent annualised return with a smaller one-time investment if they get more years of compounding.  If one wants to build a Rs 5 crore investment from a Rs 10 lakh one-time investment, they can create it in approximately 35 years.

But if they want to create it in 25 years, their estimated one-time investment should be Rs 29,41,200. The estimated investment is 3 times larger because of 10 years of less compound growth.

In the story, we will show how many years, a Rs 4,50,000 one-time investment can grow to over Rs 3,00,00,000 if the annualised return is 12 per cent. We will show this growth in different phases.

In 10 years, estimated capital gains will be Rs 9,47,632, and the estimated corpus will be Rs 13,97,632.

In 20 years, estimated capital gains will be Rs 38,90,832, and the estimated corpus will be Rs 43,40,832.

In 30 years, estimated capital gains will be Rs 1,30,31,965, and the estimated corpus will be Rs 1,34,81,965.

In 38 years, estimated capital gains will be Rs 3,29,30,849, and the estimated corpus will be Rs 3,33,80,849.