Reaching the target of Rs 1 crore can be easily achieved through SIPs and a lump sum investment. Let’s see how you can achieve the target with a monthly SIP of Rs 10,000 and a lump sum investment of Rs 10 lakh. For this investment scenario, let’s assume a return rate of 12% per annum.
Lump Sum Investment
Target: Rs 1 crore
Lump Sum Investment: Rs 10,00,000
Expected Return Rate: 12% per annum
Time Period: 20 years
Estimated Returns: Rs 86,46,293
Total Value: Rs 96,46,293
SIP Investment Formula
Target: Rs 1 crore
Monthly Investment: Rs 10,000
Expected Return Rate: 12% per annum
Time Period: 20 years
Invested Amount: Rs 24,00,000
Estimated Returns: Rs 75,91,479
Total Value: Rs 99,91,479
As per the above calculation, you can reach the target of Rs 1 crore through both investment instruments in 20 years. However, the returns on investment in both SIP and lump sum schemes may vary significantly.
For instance, a total investment of Rs 24 lakh through SIPs may yield total returns of Rs 75.91 lakh. On the other hand, a lump sum investment of Rs 10 lakh may provide total returns of Rs 86.46 lakh over the same tenure.
The decision to choose between a lump sum and SIP should be finalized after evaluating your financial condition and risk appetite. Even the guidance of a financial expert may also help in minimising risks while maximising potential benefits.
