Let’s admit, everyone wants to become a millionaire or crorepati. Now the real question is how? It is not difficult to save Rs 1 crore if one starts savings early in his life. Check out this example: “a 25-year old person can become crorepati by the time he/she reaches 55 years by investing just Rs 3,276.53 every month. An assumption is applied i:e investment grows at a compounding rate of 12 percent for the entire 30 years.”
You will be surprised to know that many equity funds have generated in excess of 12 percent CAGR over the long term.
What is Compound annual growth rate (CAGR)?
The compound annual growth rate (CAGR) is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period.
Amount You Need To Save Every Month To Become Crorepati
|Time required to accumulate Rs 1 crore||How much you need to save monthly|
|At 12%||At 10%||At 08%||At 06%|
|20 years||Rs 10974||Rs 13923||Rs 17575||Rs 22054|
|25 years||Rs 5930||Rs 8108||Rs 11001||Rs 14787|
|30 years||Rs 3277||Rs 4848||Rs 7099||Rs 10262|