Becoming a crorepati remains a key financial milestone for many Indians as they focus on long-term wealth creation. With the growing shift from traditional investment tools like fixed deposits, many examples have emerged recently where people have been able to secure a Rs 1 crore corpus with the right tools.

Experts suggest that the key is to adopt habits that encourage long-term financial discipline over chasing short-term returns. Moreover, new-age investment tools such as systematic investment plans (SIPs) give exposure to equities through mutual funds, helping investors reach this dream faster.

Past trends have shown that keeping a long-term investment horizon in mutual funds can help minimise risks while maximising returns. For instance, if someone wanted to build a Rs 1 crore corpus over 20 to 25 years, the investment needed in SIPs is quite low. This is because of the power of compounding, through which even small and regular investments can grow significantly over time.

Here’s how:

Target corpus: Rs 1 crore

Expected returns: 12%

Monthly SIP: Rs 10,000

Time required: 21 years

Total investment: Rs 25.2 lakh

Estimated returns: Rs 79.1 lakh

Final corpus: Rs 1.04 crore

What is more interesting about the impact of compounding is that adding just six more years to this investment plan will further reduce the contribution value.

For instance, if someone invests Rs 5,000 per month for 27 years in an SIP earning 12% returns, then the total amount will grow to Rs 1.08 crore. The total investments in this case would be just Rs 16.2 lakh, much lower than the 21-year period.

To conclude, these projections are based on historical returns. While it’s expected that mutual funds have the potential to spread risks for long-term investment plans, markets can be volatile. Hence, it’s always advisable to consult with a financial advisor before making significant investment commitments.

. Read more on Personal Finance by NDTV Profit.Building a Rs 1 crore corpus involves steady investment over a long-term horizon through instruments like mutual fund SIPs.  Read MorePersonal Finance 

​NDTV Profit