Everyone dreams of becoming a crorepati, but to build a net worth of Rs.1 crore you must be patient, disciplined and make smart investment decisions. The sooner you start investing, the higher your returns will be owing to the long investment horizon and power of compounding.In order to make Rs.1 crore, start by saving consistently on a monthly basis. To do this, create a budget where you provide for your expenses, liabilities, and investments and follow it diligently. Then, with a view of raising Rs.1 crore, choose from these 2 investment options.
Recurring deposit
A recurring deposit helps you develop a disciplined approach towards investing and yields steady returns over time. Since RDs are not market-linked, you can choose them even if you’re risk-averse. If you opt one, you will have to invest a fixed amount on a recurring basis, all through the tenor. On maturity, the issuer will pay you the principal and interest as a lump sum. With the goal of earning Rs.1 crore, invest a minimum of Rs.40,000 per month in an RD for 10 years. Assuming it fetches 7% interest, you will earn Rs.69,63,779.
Systematic Investment Plan
Alternatively, if you can handle moderate risk, invest via SIPs or Systematic Investment Plans. SIPs allow you to invest in a mutual funds or ELSS by contributing a fixed amount periodically, based on your affordability. Depending on the underlying assets of the fund that the SIP invests in, the risk you take on will be high, moderate or low. However, since a money manager is handling your investment, the amount of risk is curtailed.That said, before investing you must research the fund house, fund manager, and the fund’s historical performance. This will ensure you choose the right SIP. Assuming that you select one that yields 15% interest and invest Rs.25,000 on a monthly basis for 10 years, you will be able to earn Rs.69.7 lakh on maturity.
What do you do once you accumulate Rs.69 lakh?
Now that you have accumulated Rs.69 lakh over 10 years, your objective should be to reinvest it in a safe instrument so that you can protect your capital and also earn steady returns. To enjoy this outcome, consider Bajaj Finance’s Fixed Deposit. It is rated FAAA by CRISIL and MAAA by ICRA indicating excellent stability. Moreover, Bajaj Finance offers high FD rates of up to 8.75% for regular investors and up to Rs.9.10% for senior citizens on a 36-month FD with interest payable at maturity.You can simply use the FD interest calculator to ascertain returns when you invest Rs.69 lakh. As a new investor, when you invest the amount for 60 months, you earn Rs.1,04,95,314 on maturity, where the interest amounts to Rs.35,95,314.With this step-by-step guide you can achieve your target of Rs.1 crore systematically. Choose the route that suits your risk appetite and get started right away.