Often, the dream of investors is to make a fund of crores for the future even by paying less money. But still I do not understand how this will be possible and how it can be completed.
Actually, this dream can be converted into reality by understanding the right planning, patience and especially compounding. Yes, if an investor invests ₹ 4 lakh only once and gives him a chance to grow for a long time, then this amount can reach crores.
What is a lump equal investment?
In lump sum investment, the entire amount is imposed at once. You do not need to add every month installments in this. As soon as you invest, your money starts working immediately. Actually, this method is especially beneficial when the market is below or investing on the right occasion. Yes, the magic of compounding plays the biggest role here. The sooner you invest, the more time your money gets to grow.
How does this work?
In fact, in the lump even investment, you decide once, the money connects directly to the market, which can increase it rapidly and the effect of short-term fluctuations can also have to be faced, that is, the chance of profit is also more and the risk.
The benefits of lump even investing and what are the things to take care of
Immediate benefit: The entire amount starts working in the market from the beginning.
More compounding power: By applying the entire amount at once, interest on interest increases quickly.
Simple and easy: It does not have the hassle of remembering monthly installments or withdrawing money again and again, it is a great option if you get a bonus or large amount.
Market Timing: Investing at high levels may take time to get returns, but investment at the right time can bring big profits.
Risk exposure: By investing the entire amount simultaneously, the impact of the market fall can also look directly.
Estimates of investment on 12% annual returns
So suppose a lump sum investment of ₹ 4 lakh gives 12% annual compounding returns, then it will increase like this.
10 years later: Total amount ₹ 12.42 lakhs
15 years later: Total amount ₹ 21.89 Lakh
20 years later: Total amount ₹ 38.58 Lakh
29 years later: Around ₹ 1.06 crore
How to become ₹ 4 lakh ₹ 1 crore?
Suppose you invested ₹ 4 lakhs (Lumpmas) at one time. This money increases with 12% interest every year. In fact, interest here is not only on the principal, but also on the interest made already. This is called compounding.
How does money grow over time?
10 years later – Your money will be around ₹ 12.4 lakhs
After 15 years – it will increase to ₹ 21.9 lakhs
After 20 years – it will be around ₹ 38.6 lakhs
After 29 years – this money will become ₹ 1.06 crore
Last things
The journey to make ₹ 4 lakh to ₹ 1 crore is not easy, nor is it possible overnight, but it is completely possible by maintaining patience, discipline and prolonged investment. Starting early investment and staying up to long term is the real key to success. (Note: This article is only for information and should not be considered as an investment advice in any way, suggest consultation from financial advisors for investment)
5 faqs
Q1. Can only ₹ 4 lakh to crores of funds be made?
Yes, this is possible by compounding and maintaining prolonged investment.
Q2. What is compounding?
Compounding means interest on investment should also earn further interest, which increases the money rapidly.
Q3. How long will it take for ₹ 4 lakh to become ₹ 1 crore?
About 29 years, if 12% annual average returns are received.
Q4. Where can this type of investment be made?
In equity mutual funds or other high returns options for a long time.
Q5. Is this investment risky?
Yes, equity fluctuations remain, but in a long time the risk is reduced and good returns are available.