Do you want to be a crorepati?
Are you ready to invest Rs. 10k per month?
If yes, then you have landed in the appropriate place. Everyone wants to be wealthy as soon as possible.
We often hear questions such as:
If I invest 10,000 in the stock market how much money will I get?
How to become a crorepati without investment?… etc.
It is important to remember that it doesn’t happen instantly. Because good things take some time.
Wealth accumulation could be speeded up with the discipline of saving.
Yes, consistency in savings & also stepping up your savings rate, in the long run, will aid you in this Wealth Creation Process.
In this article, let us try to figure out the best way to invest 10k per month to become a crorepati with a monthly 10k investment plan.
“Always invest for the long term.”
— Warren Buffett
As Warren Buffet stated, we should always focus on long-term investing. Down the lane, it will balance your financial status & help you in achieving your financial goals.
The benefit of compound interest works best in the long run. Also, in order to accumulate the required corpus, we need to invest in an investment vehicle that provides inflation-beating returns.
A Mutual Fund Systematic Investment Plan (SIP) is the perfect option to channelize your regular monthly savings.
Mutual Funds that invest in stock markets are a must-have for long-term investors. A well-managed & well-diversified equity Mutual Fund with a good track record has the potential to earn better returns in the long run.
Table of Contents:
1.)Investment Strategy to Invest in a SIP
2.)Mutual SIP Returns for 10K
3.)Best way to invest 10k Regularly: Expert’s View on monthly 10k investment plan
4.)Best Way To Invest 10k for Your Financial Goals
5.)Best short-term investment for 10k
6.)Timing Vs. Time in: How to invest 10000 rupees per month In SIP?
7.)10K Mutual Fund SIP & Crorepati
1. Investment Strategy to Invest in a SIP:
The following table shows, how a a monthly 10k investment in SIP helps you in achieving the required corpus. Yes.Just by investing Rs. 10,000 monthly!
|SIP Annual Step-up Rate||5%|
|Total Amount invested||39.68 Lakhs|
Is saving 10k a month a good idea?
Let us assume you are investing Rs. 10,000 per month for the next 20 years with an annual step-up rate of 5%. The total amount invested would be around Rs. 39.68 lakhs.
The below table shows the various fund categories available in Equity Mutual Funds and the average return they could potentially provide in 10 years.
|Fund Category||10-year Avg. return||Final Corpus|
|Equity: Large Cap||12.32%||1.35 crores|
|Equity: Mid Cap||16.85%||2.24 Crores|
|Equity: Small Cap||18.50%||2.71 Crores|
|Equity: Hybrid Aggressive||12.27%||1.34 Crores|
|Equal Contribution in the above 4 categories||1.91 Crores|
We have taken the average 10-year return for a particular category of funds for calculation purposes.
Let us look at what category of the fund each kind of investor could invest in along with their average returns in the long term below;
- If a person invests Rs. 10,000 in Equity Large Cap Category Mutual Funds the average return is 12.32%.
- Then the final corpus value in 10 years would be Rs. 1.35 crores.
- Investors having a higher risk appetite can go for mid-cap or small-cap, where the average returns are slightly higher than the large-cap category.
- The final corpus under Mid-cap & Small Cap would be Rs 2.24 crores & Rs. 2.71 crores respectively.
- Under the Equity Hybrid category, the average return is 12.27%.
- The final corpus would be around Rs.1.34 crores.
- If you want to diversify your investment portfolio, then you can split your investment under the four categories equally.
- Ex: You can invest Rs. 2500 under each category.
- In that case, the final corpus value would be Rs. 1.91 crores.
2. Mutual SIP Returns for 10K:
Is Mutual Fund SIP the best way to invest 10k?
We can assume an annualized return of 12 for arriving at the above numbers. 12%+ is the annualized return provided by Sensex during the last 38 years. In the past, well-run actively managed diversified equity funds have provided returns far superior to the Sensex.
Please go through the below piece to get complete details of the returns of Sensex and its volatility.
Become a little saintly! Develop detachment. Never react to any of the above scenarios and stay in your charted course. Please note that markets have provided excellent annualized returns despite all these.
At least we have 4 decades of data for the benchmark index and more than the last 25 years of data for well-performing Equity Mutual Funds. Never ever stop your monthly 10k investment plan Mutual Fund SIP or redeem your investments till the time of maturity.
Your detachment and control of emotions will help you take part in the monthly 10k investment plan and would make you crorepati and wealthy beyond your dreams.
3. Best way to invest 10k Regularly: Expert’s View on monthly 10k investment plan
Why do we strongly recommend Mutual Fund SIP, when investing 10K to become a crorepati?
Let us see what stock market experts and legendary investors are saying about Mutual Fund SIP
Benjamin Graham who is considered the father of value investing and security analysis and is also the mentor of Warren Buffet once mentioned:
“A suggestion I can make is that if you were sure that you could follow a dollar-averaging program, you could start [investing] right away.
Dollar averaging is a method of investment under which you set aside a fixed amount of money and invest it in common stocks generally, either in a single common stock or preferably in a group investment through investment-company shares (Mutual Funds).
By investing the same amount of money at regular intervals – say, every three months, you get two advantages.
- One is that over the years your investment reflects the average market price rather than the high market levels – which is where you are likely to buy if you follow the crowd.
- Secondly, the arithmetic of dollar averaging gives you more shares at lower prices than at higher prices, so your average cost is lower than the arithmetic average. If you are putting $1,000 in one kind of stock and the price is $10, you’d get 100 shares. If later it’s $20, you’d get 50 shares. You bought more stock at the $10 basis than at $20. Consequently, your average price would be less than $15.”
What Benjamin Graham has said about investing regularly for the long term works well for a portfolio of stocks like Mutual Funds or indexes rather than an individual stock.
By doing this, we are able to avoid one of the most fundamental and costly errors in investing; investing money only when the markets are high and redeeming or not investing further when the markets are low.
Not only that we get average prices instead of higher prices over the long term, the average price is lesser than the arithmetical average because we buy a lot more when markets are low and a lot less when the markets are high.
Warren Buffett has also mentioned for an ordinary investor (like you and me) the best way to build wealth is to invest regularly over a long period of time. To quote Warren Buffett:
“If you buy equities across the board [through diversified equity Mutual Funds] and you do it over time so you don’t put all your money in at the wrong time … that’s probably the best investment most people can make.”
4. Best Way To Invest 10k for Your Financial Goals:
Why we want to focus on SIP more than lumpsum is SIP is and should be possible for all.
The ideal investment period should not be less than 20 years if you’re planning for retirement.
For other long-term goals, the duration can be decided based on when the financial goal needs to be achieved. It is the duration and not the amount that matters most.
5. Best short-term investment for 10k:
Last but not least, forget about equity investments if your investment tenure is less than 10 years. For anything lesser than that, your stock broker is waiting for you. He is always available to trade for you.
Take your ‘funny money’ there and you will definitely come out ‘richer’ with the experience of what not to do with your money.
Investment or Trading?
The choice is yours.
6. Timing Vs. Time in: How to invest 10000 rupees per month In SIP?
I’m amazed at how many novices including investment advisors, stock brokers, wealth managers, and investors think that they are good at timing the market. These people believe that they could time the market to perfection.
However, genuine expert after expert has gone on to say that trying to time the market is a fool’s game and should be avoided at all costs.
It is not possible, even for the experts, to predict the best and worst days in the stock market.
So, please stay the course and commit to your monthly 10k investment Mutual Fund SIP plan for the long term regardless of the bad news. Correction or crash in the market.
7. 10K Mutual Fund SIP & Crorepati:
Since Mutual Fund SIP allows you to start investing with a small amount, you can gradually build your Investment Portfolio in the long run.
You can watch our video on “How to Turn Rs 10,000 into Rs 1 Crore” to better understand this Investment Strategy in detail.
On the whole, regularly saving through a Systematic Investment Plan is a route to accumulating wealth and becoming crorepati for retail investors. Mutual Fund SIP Investments can make your life easy.
You don’t require special knowledge to study the stock market. You just need to infuse the habit of saving & also increase your savings rate whenever there is income growth.
Choose a Mutual Fund scheme that aligns with your financial goal, risk appetite, and investment horizon to start investing.