The Power of Compounding: How Rs. 1000 Monthly Can Make You a Crorepati
by Admin
It is for this reason that one of the biggest benefits of investing is that it is possible to amass a lot of wealth by investing a set amount of money at regular intervals because the money will compound. And for the Indian investors anyone investing just Rs. 1000 per month with appropriate portfolio management can turn them into a crorepati or a millionaire. Let us look into the details of how this operates and how you could harness this power so as to create your own fortunes.
What is Compounding?
Compounding, this means that the earnings on your investment provides further income for itself. This also different than making money in the initial sum you invested.
How Rs. 1000 Monthly Can Grow Over Time
Now let’s try to understand how Rs. 1000 invested monthly can be compounded and grow over a certain period of time given an average annual return of 12% as is quite possible with equity mutual funds in India.
| Time Period | Total Investment (Rs.) | Total Value (Rs.) | Profit (Rs.) |
|---|---|---|---|
| 10 years | 1,20,000 | 2,32,339 | 1,12,339 |
| 20 years | 2,40,000 | 9,26,630 | 6,86,630 |
| 30 years | 3,60,000 | 29,72,801 | 26,12,801 |
| 40 years | 4,80,000 | 95,48,090 | 90,68,090 |
Becoming a Crorepati
From the above table, you will realize that, if you are consistent with your investment strategy and invests Rs. 1000 monthly for the next 40 years at an average annual Rate Of Interest (ROI) at 12%, your invested amount will be around Rs. 1 crore. This is the magic of compounding of which time is on your side.
Tools to Help You Choose the Right Mutual Funds
To generate such returns, it is very important to select appropriate mutual fund. At IpoTec, you can select mutual funds based on various criteria. Visit our Mutual Funds Screener.This is the right time for you to begin your wealth building process
Selecting the Right AMC
Believe it or not, the performance of your mutual funds is closely tied to the Asset Management Company (AMC) that you select. Explore different AMCs and their offerings on our AMC page to make informed decisions.
Conclusion
When investing is consistent it does mean that even a small investment can give a big return when compounded. If you are able to begin at an early age and stick with your investment plans you can be a crorepati.
Begin your investments right now to understand how the concept of compounding will work for you.
Disclaimer: The above returns are projected, and the expected rates of returns used are arbitrary. The returns you get in actual are influenced by numerous factors such as the market conditions, the selected mutual funds and the like.