How to build ₹1 crore corpus by age of 45?:Start with ₹10,200 SIP by the time you are 25 you will get there

If you want to build a substantial fund of ₹1 crore by the age of 45, the age at which you start plays the biggest role. According to financial planners, the earlier you start investing in a mutual fund SIP, the less money you will need to contribute from your pocket. For example, a monthly SIP of ₹10,200 starting at the age of 25 can achieve the same target that would require an investment of ₹44,000 every month if you start at the age of 35. In fact, staying invested in mutual funds for a long period allows you to benefit from compounding. Assuming an average annual return of 12%, starting late reduces the time available for compounding, requiring investors to invest more money from their own pocket. Starting at the age of 25: A monthly SIP of ₹10,200 will be required If someone starts an SIP at the age of 25, they have 20 years to reach the age of 45. With a 12% return, an investment of ₹26.48 lakh will grow to ₹1 crore. Benefit: Due to the long investment period, more than 75% of the total fund will come from returns generated through compounding, while you will contribute only ₹26.48 lakh. Starting at age 30: The monthly SIP will double to ₹20,500 If you start 5 years late, at the age of 30, you will have only 15 years left to reach the target of 45. Since the time is shorter, the monthly installment will have to be doubled. Starting at the age of 35: You will have to invest ₹44,000 every month Starting to invest at the age of 35 leaves only 10 years until turning 45. To achieve a target of ₹1 crore in such a short period, a substantial SIP would be required. Disadvantage: Here, the investor has to contribute more money out of their own pocket (₹52.80 lakh) than the returns they receive (₹48.41 lakh), because compounding did not have enough time to work. The Earlier You Invest, the Lower the Burden Comparing the figures for all three age groups makes it clear that a delay of just 10 years increases the monthly installment by more than four times. While paying ₹10,200 a month at the age of 25 is manageable, saving ₹44,000 every month at the age of 35 may be difficult for many people. It Is Also Important to Consider Market Risks This calculation is based on an assumed potential annual return of 12%. Mutual fund returns depend on stock market performance, so they may be lower or higher. However, over the long term, equity mutual funds have historically been capable of delivering average returns of up to 12%.