SIP Tips: How to become a millionaire in 10 years through SIP? How much investment is required? know..

Becoming a millionaire in India is still a dream for millions of people. It's not just about financial security, but also a major goal for retirement and future protection. The good news is that with the right planning and disciplined investment, this dream can be achieved in just 10 years.

A 10-year investment horizon is considered a balanced period for high-risk investments. During this time, the impact of market fluctuations is balanced out, and the power of compounding can provide investors with better returns in the long run. This is why options like mutual fund SIPs and gold are often considered.

Saving alone is not enough.
Saving alone is not sufficient for this goal. If the target is to build a corpus of ₹1 crore in 10 years, the investment strategy needs to be somewhat aggressive. Options with the potential for high returns, the effective use of compounding, and portfolio diversification play a crucial role. For such a large goal, a step-up SIP is considered essential. In this approach, investors increase their SIP amount every year, usually in line with their income growth. This allows the investment to grow gradually without creating significant financial pressure.

How can a corpus of ₹1 crore be built through mutual funds?
If an investor invests ₹30,000 every month through a mutual fund SIP and increases this investment by 10 percent every year as their income grows, a substantial corpus can be built over 10 years.
Considering an average annual return of 12 percent on this entire investment, the total investment over 10 years would be approximately ₹57,37,472.
The estimated return on this investment would be approximately ₹43,85,505, bringing the total fund value to around ₹1,01,22,978.

How can the ₹1 crore target be achieved through gold investment? On the other hand, if an investor chooses to invest in gold and invests approximately ₹33,000 every month, while also increasing the investment amount by 10 percent every year, a substantial corpus can be built in 10 years.
Based on this calculation, assuming an average annual return of 10 percent on gold, the total investment would be approximately ₹63,11,220.
The estimated return on this investment would reach around ₹37,40,091, and the total value could be approximately ₹1,00,51,311.

Mutual Funds vs. Gold
The data suggests that mutual funds have the potential for higher returns, but this is not guaranteed. Gold, on the other hand, performs better in certain economic cycles, especially when global uncertainty or geopolitical tensions increase. Both options can prove beneficial under different circumstances. Overall, with the right SIP, step-up strategy, and patience, the dream of becoming a millionaire in 10 years can become a reality.

Important advice for investors
The goal of becoming a millionaire in 10 years is ambitious, but not impossible. However, it is essential to understand the risks before investing.

Disclaimer: This content has been sourced and edited from Navbharat Times. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.