How to Earn 100 Crores from Mutual Funds? Can’t believe? Read to Believe!
We have seen that most investors and their advisors plan for a 1 crore corpus. Somehow even a 10 crore number looks far fetched but here we are talking about a 100 Crore number. So today, we will explain you in details How to Make 100 Crores from Mutual Funds. Yes many of you may think that it is a wild number to achieve and many would not even be able to imagine whether such wealth can be created. But let’s see whether this number is achievable or not.
Start Early
This is the most important financial habit and gives multi fold benefits. Starting early adds a level of financial discipline. Early investors can take much more risk, which helps accumulate returns quicker. But the most important aspect is the power of compounding, which allows you to accomplish your desired corpus at retirement.
Stay Invested
Equity markets can seem volatile to many investors. The graph above shows that some years provide exceptional returns while others provide negative returns due to the economic downturn. But as shown in the graph below, over the long term nifty index has only gone up.
Hence believe in the power of equities to create long term wealth for you. Keep a long term view.
Step Up SIP
SIP as everyone knows is investing fixed sum at regular intervals. In Step-up SIP, as the name suggests, you increase your investments over the period of your investments. Investors can step up their investments in line with their income. Step-up SIP helps investments get the benefits of compounding and achieve the required corpus.
Good Advisor
It will be a long journey for the investor. So it is important to have a good advisor who can handhold the investor during this fruitful journey.
Now lets understand different scenarios below wherein an investor can achieve 100 Crore of corpus.
| Scenario A | Scenario B | Scenario C | Scenario D | |
|---|---|---|---|---|
| Lumpsum Investment | Nil | Nil | Nil | 50,00,000 |
| Monthly SIP | 50,000 | 26,000 | 1,00,000 | 55,000 |
| Annual Step Up | 5% | 0% | 7% | 0% |
| Expected Annual Return | 13% | 12% | 15% | 12% |
| Tenure in Years | 40 | 50 | 30 | 40 |
| Total Investment Value (in Rs Crs) | 7.2 | 1.6 | 11.3 | 3.1 |
| Final Corpus Value of SIP (in Rs Crs) | 103.0 | 102.6 | 106.5 | 53.9 |
| Final Corpus of Lumpsum Investment (in Rs Crs) | - | - | - | 46.5 |
| Final Corpus (in Rs Crs) | Rs 103.04 Crores | Rs 102.56 Crores | Rs 106.45 Crores | Rs 100.38 Crores |
Different return scenarios are taken depending on how market performs and how well an investor’s Mutual Fund portfolio performs. But are these return scenarios practical? Let’s understand below.
The oldest running scheme in India is UTI Mastershare. It was launched in Oct 1986. So it is roughly 36 years old. If someone had invested Rs. 1 Lakh, the value of that investment has become 1.8 Crore as on 30 Apr 2022. The scheme has given 15.73% compounded annual returns since inception.
The world’s most celebrated investor Warren Buffett’s company Berkshire Hathway has given an average annual 20% returns to its shareholders since 1965. That is 57 years of annual average 20% returns.
India is in a growth phase and large investors believe this is Asia’s century so the next 50 years are going to be very fruitful for Indian Mutual Fund Investors. So in our above examples if an Investor is able to make 12-14% average annual returns then there is a very real chance that he may end up with 100 Crore corpus. Yes its doable for the disciplined, diligent and long term investor. As they say “Reach for the Moon, Even if you miss you’ll land among the stars”.
We hope that our above article How to Make 100 Crores from Mutual Funds will help you to plan a financially successful future. If you need any assistance on Investment or How To Invest In Mutual Funds Feel free to contact Wealth Baba – Financial Planner & Investment Advisor in India. We will try to help you out in the best possible way.
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