Achieving Financial Success: A Guide to Building a 10 Crore Corpus in 20 Years

Earlier this week, I had a chat with someone in their thirties who has managed to establish a thriving career and openly expressed their wish to retire in 20 years. Their dream was all about relishing peaceful moments by the beach, savoring a cola, and gazing at the vast seas—a truly inspiring aspiration. This led me to think about the process of building a significant retirement fund, aiming to accumulate 10 crores over 20 years.

When you first think about it, 10 crores might appear to be a significant amount. But when you consider it in the context of a 20-year timeframe and take into account rising costs and inflation, it becomes a more reasonable target.

A lot of people have the ambition to achieve this financial milestone within two decades so they can enjoy a comfortable and stress-free retirement. This recognition emphasizes the importance of the ten-crore goal.

12 KEY ASPECTS FOR ATTAINING 10 CRORE CORPUS IN 20 YEARS

Now, what can we do to reach the ten crore milestone through effective investment strategies? Let's dive into 12 crucial aspects that shed light on the roadmap to attaining a 10 crore corpus within a span of 20 years.

1. Set Clear Financial Goals

Alright, the first thing you have to do in financial planning is make sure you allocate that ten crore towards a specific goal. In this case, the guy was crystal clear that he didn't want to give up his preferred lifestyle. So, we established a daily living standard as our starting point.

Furthermore, he strongly desired to develop an intense passion for his beloved pastime, which involved traveling the world and experiencing diverse cultures. He aimed to accumulate a substantial amount of funds to support this endeavor.

This way, every three months after turning 50, he could embark on exciting adventures around the world. This burning passion motivated him to work diligently towards achieving his goal. Hence, these two aspects were closely intertwined, forming a clear rationale for his financial aspirations during retirement.

2. Create A Budget

The possibilities are endless if you're willing to put in the effort and financially support your dreams every month, especially when considering long-term investment strategies. This gentleman was beginning to lay out a plan to make it happen.

We suggested that he create a well-defined budget outlining all the money coming in and going out. This way, he can allocate the necessary funds every month and make sure that the money is consistently invested.

3. Create An Emergency Corpus

As part of the investment, we proposed that he create an emergency fund for himself. This would be essential in case there are any unexpected distractions or disruptions in his income, enabling him to handle any financial obligations that may arise during those times.

Having an emergency corpus is absolutely vital when it comes to managing your finances. It provides a safety net, ensuring that you won't be tempted to withdraw your investments or deviate from your plan if unexpected events occur, such as a decrease in income, job changes, or other typical happenings.

Check out the video link for a more in-depth understanding

5. Choose The Right Investment Mix 

If you find yourself in a tight spot and require some emergency funds, consider adjusting your investment portfolio to include safer options like a debt fund or a liquid fund. By doing so, you can secure a stable return while also investing a larger sum for potentially higher gains over a longer period. It's important to find an investment mix that feels right for you. Take the time to figure out how much you want to allocate to each asset.

6. Take some risks

When you're pursuing a 20-year goal, it's crucial to be willing to take risks. Equity can be a valuable tool that aligns perfectly with your long-term investment plan, even if you're not a fan of its ups and downs.

Marrying equity with your investment portfolio, whether it's a mutual fund or a stock, is a brilliant idea. Going for a mutual fund could be a favorable option. Over 20 years, equity has the potential to provide the most effective compounding, resulting in a significantly larger corpus compared to other options. Hence, equity is undoubtedly a valuable asset.

Check out the video link for a more in-depth understanding 

7. Increase Contributions With Income Growth

Ensure consistent growth in your investments for wealth accumulation. Make sure to regularly increase the amount you invest, and by regularly, at least once a year. For example, if you begin with a ₹50,000 investment, you should be able to add ₹5000 to it every year, at the very least. It's always better to have more! But remember, as your salary grows and inflation rises, it's crucial to increase your contribution to an SIP by at least 10% every year.

8. Review and Rebalance Your Portfolio

Remember to periodically review your portfolio and make adjustments accordingly, a process commonly known as ‘Portfolio Adjustment’. As markets can be unpredictable, it's essential to keep track of how your investments are doing.

If a scheme you invested in isn't performing as expected after a few years, it might be worth considering reallocating your portfolio. Always avoid taking out the money, but you're more than welcome to move it from an underperforming fund to a better-performing one. That's perfectly fine.

9. Avoid Emotional Decision Making

Undertaking such a lengthy journey demands a significant amount of self-discipline. It's crucial to keep emotions at bay and stay focused on your objective. There will be instances when the markets are thriving, and there will be moments when the equity markets are in decline.

Your portfolio might not always impress, but don't let that deter you. That's the 1% that sets you apart from the rest. Only 1% of individuals can maintain their emotional stability and continue their journey. 

We strongly urge you to be part of that 1%, aiming for 10 crore in 20 years. Trust me, by the end of the term, you will see returns coming your way, even if the journey is exceptionally challenging along the way.

10. Keep Some Amount Of Liquidity

It's crucial to ensure that you maintain a certain level of liquidity in your portfolio. This is where the emergency fund comes into play. However, it's also important to periodically rebalance your portfolio to ensure a balanced combination of equity and a small portion of debt investments driven by liquidity.

check out the video link for a more in-depth understanding 

11. Invest In Tax-Saving Instruments

It would be awesome if you could combine your investing with tax planning too. It's like hitting two birds with one stone; you not only reduce your tax burden but also build a financial nest egg for the future.

12. Invest In Mutual Funds Through Systematic Investment Plans (SIPs)

Finally, instead of attempting to make a large investment at different times, SIP is the simplest way to go. It may seem like a straightforward solution, but it's not a walk in the park.

SIP, coupled with mutual funds, can be a secret weapon to build a massive corpus. By diligently following these 12 steps, trust me, you'll reach ten crore sooner than you think.

Just keep at it every month, month after month, and you'll see the results. Creating a 10 crore corpus in just 20 years may sound like a huge amount, but in truth, it's not that big of a deal.

Calculation Insights

Let’s break it down for you. If you're aiming for a corpus of ten crores in 20 years with 5% inflation, it's like having 3.76 crores today. And honestly, my friend, that's not a huge amount of money. So, I'd suggest you start considering ten crores as a more reasonable goal than you might think it is.

Inflation is causing money to become cheaper and cheaper. Therefore, you should consider a larger amount. Ten crore is a significant figure in this regard. As I mentioned earlier, 3.76 crores as a retirement corpus in today's time is not a large sum at all. If you aim to accumulate ten crores over 20 years, then you should consider the systematic investment option.

The required amount differs based on various rates. I'm mentioning this because if you're willing to take a higher risk with a small cap mutual fund, which is considered more risky, you might be able to achieve a 15% return over 20 years. In this case, the monthly savings needed are relatively smaller. Just ₹66,000 per month can help you reach ten crore in 20 years.

If you decide to opt for a safer investment, like a hybrid product that combines both equity and debt, you can expect a return of no more than 10%

To reach the ten crore corpus, you'll have to invest about 1.31 lakhs every month. The decision comes down to whether I'm willing to take a bit more risk because I have a slightly longer timeframe for it to unfold.

Maybe I should consider playing it safe? Although it's a more expensive choice in terms of contributions compared to taking a bigger risk. However, keep in mind that the mentioned 66,000 is not the exact amount you need to begin with. You can start with a much smaller amount.

Alright, let's begin with the starting point of 40,000. Over 20 years, if you manage to increase it by 10% each year to account for inflation and the average of your contributions falls between 60,000 and 65,000, you'll eventually reach your goal of ten crore.

As we wrap up this journey to reach a 10 crore corpus in just 20 years, remember that success in building wealth comes from sticking to important principles. Follow the 12 aspects we've discussed‌, stay committed to your plan, and watch as your financial goals come true. Getting to ten crore might seem tough, but with knowledge, determination, and a well-thought-out plan, you can make your financial dreams a reality. 

As long as you keep up with your consistency and discipline in making this contribution every month and are willing to take a bit more risk since you have 20 years ahead of you, we truly believe that a ten crore corpus awaits you at the end of your disciplined journey.