How to invest in SIPs to get 10 Crores after 20 years

Glad to note that you want to have 10 Crores after 20 years and wish to plan for that now.

SIP is the best way to achieve your long term wealth creation goals as you can accumulate a large corpus by saving a small amount monthly while getting into a disciplined way of investing. However the selection of funds for your long term SIPs should be based on your risk tolerance level. For example, if you can take high risk then you can choose to invest in mid & small cap funds. For a slightly lower risk, diversified equity funds can be a good fit.

How to achieve your financial goal is a function of how much risk you can take on your investments and if you can afford to invest the right amount from now onwards. Typically, the return on mutual funds will depend largely on the category of funds that you are choosing to invest based on your risk profile. Higher the risk, higher could be the return. If you look at historic returns, large cap funds can give around 12%, diversified funds around 14-15% and mid & small cap can give 15-18% annual returns over long period of time. Based on these range of returns, you need to decide the monthly SIP amount in order to reach your goal of 10 Crores.

You can see your probable monthly SIP amount as below, based on the expected rate of returns –

1. If the fund return is 12% per annum – you need to have SIP of Rs 103,000

2. If the fund return is 14% per annum – you need to have SIP of Rs 80,000

3. If the fund return is 15% per annum – you need to have SIP of Rs 70,000

4. If the fund return is 16% per annum – you need to have SIP of Rs 62,000

5. If the fund return is 17% per annum – you need to have SIP of Rs 55,000

6. If the fund return is 18% per annum – you need to have SIP of Rs 48,000

You can explore this calculator to check the above numbers https://www.advisorkhoj.com/tools-and-calculators/become-a-crorepati

As you can see from the above chart, the SIP amount reduces drastically if the returns are high. Now that you know the tentative monthly SIP amount, you should select the right category of funds suiting your risk profile.

For selecting top funds from various categories try this research tool on our website – https://www.advisorkhoj.com/mutual-funds-research/top-consistent-mutual-fund-performers

Hope you can now decide the right monthly SIP amount and right funds for achieving your long term financial goal.

Happy investing and thanks for writing to Advisorkhoj.