How To Accumulate Rs 5 Crore Corpus In 10 Years?

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"How do I accumulate Rs 5 crore in 10 years?" is a question many Indian investors ask when they set their sights on a large target corpus for financial independence. Rs 5 crore is undeniably an aspirational milestone. While it may appear out of reach for some, it can certainly be attainable for others willing to make prudent investments and work hard for them over time. 

This article presents a well-rounded perspective - assessing both possibilities and challenges involved in striving for Rs 5 crore in a decade. We offer guidance across factors within your control - managing cash flows, planning investments, and optimising returns while tempering expectations on aspects like market volatility requiring acceptance.

Defining the Problem Objectively

The first step is objectively assessing whether Rs 5 crore in 10 years is a realistic target for you based on your income, expenses, and ability to save. We can break this down further:

1. Your Current Savings Rate

What percentage of your net monthly income can you set aside for investments? 30% would be good, 40% fantastic. Your savings rate determines how soon you achieve the Rs 5 crore goal.

2. Expected Investment Returns

For equities, moderate return expectations are 10-12 % CAGR and 15% on the higher side over 10-year horizons. Debt options yield 6-8% based on duration. What's your optimal asset allocation?

3. Investment Horizon

Ten years allows your core equity fund investments sufficient time to ride intermittent volatility and benefit from compounding.

For instance, say your current monthly investible surplus is Rs 50,000, which you ramp up by 10% yearly as your income rises. If you allocate 70% to equities aiming for 12% CAGR returns and 30% to debt earning 8%, your portfolio value after 10 years with monthly SIPs would be approx. Rs 3.5 crore.

So while Rs 5 crore in 10 years is achievable for some given the right factors and discipline, do set return expectations that don't promise overnight riches. Be realistic based on your risk appetite and income sustainability.

Setting an Investment Framework

1. Choosing the Right Investment Instruments

●     Equities: Equity exposure is key since your goal is sizable capital appreciation across a reasonable horizon. Equity mutual funds across categories and market capitalisations should form 60-80% of your portfolio. ABSL PSU Equity Fund provides actively managed exposure to the government-owned PSU sector.

●     Debt: You need 20-40% exposure to debt mutual funds as well to balance portfolio stability with equities' growth potential. Based on the risk profile, the target mix is short, medium, and long term debt funds. 

●     Alternatives: Allocate 10-20% to gold funds or international funds to further diversify.

2. Investing through SIPs

Target investing a fixed monthly amount into your mutual fund portfolio through Systematic Investment Plans (SIPs), irrespective of market ups and downs. SIPs average out cost, ease liquidity strain, and aid investing discipline targeting long-term compounding.

3. Accounting for Timelines, Goals

Assess specific portfolio allocation and withdrawals, keeping respective financial goal timelines in mind. Your core Rs 5 crore goal has a 10-year horizon - suitable for a higher 70-80% weighting to equity funds focused on growth.

Optimising Your Investment Approach

1. Start SIPs Early, Set Increasing Targets

Start investing early and increase your contributions as your income rises.

2. Improve Savings Rate Strategically 

Save more by tracking expenses, avoiding lifestyle inflation, budgeting smartly, and starting early.

3. Deploy Lump Sums Opportunistically

Instead of spending it all, invest your lump sum bonuses or windfalls in mutual fund SIPs.

4. Review and rebalance Asset Mix Periodically

Review your investment returns every 6-12 months and adjust as needed to meet your goals.

Calculating SIP Requirements for Rs 5 Crore

Now let's run monthly SIP contribution requirement scenarios for a Rs 5 crore target in 10 years across assumed annualised portfolio return rates:

Returns         Monthly SIP Needed

10%:                Rs 3.3 lakhs

12%:                Rs 2.6 lakhs

15%:                Rs 2 lakhs

18%:               Rs 1.6 lakhs 

Based on the portfolio, delivering Rs 5 crore in 10 years requires extremely high discipline. Contributing Rs 2 lakh every month for 10 straight years could prove challenging for most individual investors. Here are 5 practical ways to adapt and overcome this constraint: 

1. Start Small, Increase Annually: Start with a lower, feasible SIP amount instead and increase by 10-20% yearly or on salary hikes. 

2. Pool Family Savings: Combine investment firepower with your spouse's income instead of relying solely on your salary. 

3. Deploy Lump Sums: One-time payouts, bonuses, or asset sales - direct them into mutual fund SIPs to supplement periodic contributions. 

4. Set 10-15 Year Horizon: Adding just 2-5 extra years reduces requisite monthly SIPs, given compounding's exponential effect over time. 

5. Actively Monitor Progress: Review portfolio size each quarter or half-year versus target corpus. Make tactical changes in SIPs or rebalance mutual fund schemes accordingly.

Managing Risks

While potentially generating higher inflation-beating returns, equity funds carry inherent volatility risks over shorter periods. This clashes poorly with rigid short-term goals - hence the need for risk mitigation strategies: 

1. Don't Overexpose to Equities

Maintain some debt scheme allocation for stability instead of overly aggressive equity exposure chasing exceptional returns. Define asset allocation boundaries based on risk tolerance.

2. Stagger Across Fund Categories

Split equity allocation into 2-3 focused funds - large cap, flexi cap, mid-cap, sectoral - rather than concentrating risk in just 1 scheme. This smooths volatility.

3. Build Emergency Reserves

Before chasing such sizable investment targets, ensure adequate protection via insurance covers and emergency funds so basic expenses remain funded for 6-12 months despite income interruptions.

4. Expect Interim Fluctuations

Over 10-15-year horizons, interim equity losses or missed return expectations by a few percentage points can get bridged. But avoid panic redemptions due to normal corrections.


Investors can accumulate Rs 5 crore over 10-15 years with disciplined investing and a realistic assessment of risk. Invest in equity funds and balanced mutual funds, keeping asset allocation needs in mind. Stay invested for the long haul, let compounding work its magic, and maintain a high savings rate while keeping a close watch on expenses.

This article is part of a featured content programme.
Published 22 April 2024, 10:46 IST

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