One-time Investment to Create Rs 94 Lakh Fund: The basic instinct of a human being is to get the maximum output from the minimum effort.

Be it their daily work or investment.

In either way, they want to get the maximum mileage from the minimum effort.

But optimised outcomes are not possible without proper planning.

In their daily lives, it has motivated human beings to develop machines.

In terms of investment, such a result can be possible with a good investment strategy and long-term investment.

Just by staying in their investment for long durations, they can multiply investments multiple times.

They can create a system where compound growth can maximise their investment the same way as a machine can maximise output to save human effort.

Know how duration plays a key role in multiplying wealth and in how many years a Rs 2,50,000 one-time investment can create a corpus of Rs 94,00,000.

How duration matters in investment 

Time is a key factor in investments where investors get compound growth.

The returns grow faster with time because one gets return on return.

In the short term, the compounding phenomenon may not appear to be much significant, but in the long term, it may take your corpus to dizzying heights.

Let’s understand this concept with examples of one-time (lump sum) and monthly SIP investments in mutual funds.   

Example of Rs 7,000 monthly SIP for 10 years and 30 years

If a person invests Rs 7,000 monthly in a mutual fund SIP scheme and gets a 12 per cent annualised return on their investments, let’s see what results they may get in 10 years and 30 years.

In 10 years, the investment will be Rs 8,40,000, estimated capital gains will be Rs 8,40,000, and the estimated corpus will be Rs 15,68,251.

In 30 years, the investment will be Rs 25,20,000, estimated capital gains will be Rs 1,90,46,812, and the estimated corpus will be Rs 2,15,66,812.

Just 20 years of extra time multiplied the corpus by more than 13 times.

Example of Rs 1,50,000 investment for 12 years vs 36 years

Here, an investor invests Rs 1,50,000 in a mutual fund scheme and lets it grow. Now, see what the results can be in 12 years and 36 years if the annualised return is 12 per cent.

In 12 years, estimated capital gains will be Rs 4,34,396, and the estimated corpus will be Rs 5,84,396.

In 36 years, estimated capital gains will be Rs 1,90,46,812, and the estimated corpus will be Rs 88,70,336.

Here, the person didn’t invest a single extra rupee but just let the corpus grow for 24 more years, and the result is over a 15-times higher corpus.

Power of compounding for retirement corpus

Here, the lesson is that if one starts their retirement journey early, they can create a large corpus even with a small monthly investment or a one-time investment.

If one starts at 25, a small investment can create a giant corpus, but if they start at 40, they will need a much higher investment amount to generate the same corpus.

From Rs 2,50,000 one-time investment to Rs 94,00,000 corpus

Here, we will see that if the annualised rate of return is 12 per cent, in how many years can a Rs 2,50,000 one-time investment reach Rs 94,00,000?

We will show how this investment will grow in different phases.

Retirement corpus from Rs 2,50,000 one-time investment in 10 years

In 10 years, estimated capital gains will be Rs 5,26,462, and the estimated corpus will be Rs 7,76,462.

Retirement corpus from Rs 2,50,000 one-time investment in 20 years

In 20 years, estimated capital gains will be Rs 21,61,573, and the estimated corpus will be Rs 24,11,573.

Retirement corpus from Rs 2,50,000 one-time investment in 30 years

In 30 years, estimated capital gains will be Rs 72,39,981, and the estimated corpus will be Rs 74,89,981.

Retirement corpus from Rs 2,50,000 one-time investment in 32 years

In 32 years, estimated capital gains will be Rs 91,45,432, and the estimated corpus will be Rs 93,95,432.

(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)