You want to create a fund of Rs 3 crore through SIP, know for how long and how much you need to invest:

News Topical, Digital Desk : If you have a lump sum of Rs 30 lakh and you think about where and how to invest it so that it can become a big amount in the future, then mutual funds can be a great option. Mutual funds invest in shares, bonds and other assets and grow your money not slowly but rapidly through compounding. That is, the longer the time you invest, the bigger the benefit you will get.

When will it take to make one crore

If you invest Rs 30 lakh in mutual funds at one go and assume an average annual return of 12 percent, then in about 11 years this money will grow to Rs 1 crore. There will be a profit of about Rs 74 lakh i.e. capital gain and your total amount will become about Rs 1 crore 4 lakh. This means that not only the investment amount will increase, but you will also get the benefit of interest on interest which is the real reason for this growth.

In how many years will it make 2 crores

Now if you think beyond one crore and your target is Rs 2 crore, then for this you will have to be a little more patient. If you keep the same Rs 30 lakh in mutual funds for 17 years, then your total amount can be around Rs 2 crore 6 lakh. Out of this, Rs 1 crore 76 lakh will be just return i.e. profit. This shows that as time increases, the scale of returns also increases. And this is the real magic of compounding.

When will it take to make Rs 3 crore?

Now let's talk about a bigger target like Rs 3 crore. If you invest the same Rs 30 lakh and keep it in mutual funds for 21 years without withdrawing it, then your amount can grow to around Rs 3 crore 24 lakh. The profit you get in this entire period will be around Rs 2 crore 94 lakh, that is, more than 9 times your original investment amount. This is the best example of how powerful long-term investing is, especially when it comes to equity-based investments like mutual funds.

Actual returns will depend on the market

Keep in mind, all the calculations mentioned above are based on an estimated 12 percent annual return. But the actual return can go above or below this, because mutual funds are market linked. Therefore, it is important to consult your financial advisor before making any investment.

Be patient, wealth will build itself

If you can wait for a long time and do not disturb your investment, then a lump sum investment of Rs 30 lakh can be converted into Rs 1 crore to Rs 3 crore and that too only with patience, time and the power of compounding. Big goals can be achieved by starting with small steps and mutual funds are an excellent way to do this.