How to save Rs 1 crore with a monthly salary of Rs 50,000 (2024)

With the right investment and a little bit of planning, you can easily achieve many financial goals — be it short-term or long-term. So, is it possible to accumulate Rs 1 crore with a salary of Rs 50,000 a month? Absolutely. You need to know where to invest and how to invest. The next question you may have is how much time it will take to save Rs 1 crore with your salary? Well, it depends on how much you can invest. The more amount you invest, the shorter it will take to reach the dream goal of saving Rs 1 crore. Here's how to save to get Rs 1 crore.

Equity mutual funds could be your trusted friend when it comes to saving for the long term. Even if you invest a small amount of money regularly, you will be able to save a huge corpus in the long run. All credit goes to the compounding factor. There are several mutual funds available in the market. Returns from equity mutual are usually higher than debt or hybrid mutual funds. Though equity investments are often termed riskier than other categories, it is the only instrument that offers inflation-beating returns in the long term.

Also Read: How to save Rs 1 crore in 10 years, 15 years, 20 years: Check how much you need to invest every month

To accumulate a lump sum amount of Rs 1 crore, you can start with a systematic investment plan (SIP) in equity mutual funds. How does mutual fund SIP work? You invest an amount in mutual fund SIP regularly, say every month or every quarter. With time, your small investment grows into a large corpus, all thanks to compounding and rupee-cost averaging. It is important to maintain financial discipline if you want the best return from your mutual fund. Let's see how much you need to invest to get Rs 1 crore from a mutual fund.

Earn Rs 50,000 a month? How much should you invest to save Rs 1 crore

Even if Rs 50,000 is not a huge amount, you have to put aside some parts to achieve your long-term goals. If you can invest 15-20% of your salary every month, you can achieve your dream goal of Rs 1 crore within a reasonable period. Keep in mind that when you invest a small amount, it will take a longer time to achieve your goal. When you invest more, the tenure to reach the goal will become shorter.

Assume you invest 15% of your salary — Rs 7,500 every month in an equity mutual fund that offers an annual return of 12%. Considering you get a consistent return for 20 years, you will save Rs 1 crore in 276 months or 23 years.

If you invest Rs 10,000 — 20% of your monthly salary — in a mutual fund that earns a 12% yearly return, you will get Rs 1.01 crore in 249 months or 20.75 years.

If you have a longer tenure, the investment amount will come down. If you invest Rs 5,000 a month, it will take 317 months or 26.4 years to save Rs 1 crore at a 12% interest rate.

How long does it take to save Rs 1 crore with Rs 50,000 salary per month? Check this table

How to save Rs 1 crore with step-up SIP

Another way you can achieve Rs 1 crore a little bit faster. Whether you are salaried or self-employed, your income will increase with time.

When your income increases, you need to raise your monthly SIP amount. This process is known as step-up SIP where you increase your SIP amount every year to accelerate your wealth creation journey. It serves twin purposes — it helps you to beat the adverse effect of inflation on your savings and speed up your savings as and when your income rises.

How will it work? So, imagine you start a SIP with Rs 7,500 per month with a 12% annual return. Now you increase it by 5% every year, you can accumulate Rs 1 crore in 244 months or 20.33 years.

If you can afford to increase the monthly SIP investment by 10% every year, you can get Rs 1 crore in 214 months or nearly 18 months.

If you can increase your monthly SIP of Rs 10,000 by 5% every year, you can accumulate Rs 1 crore in 220 months or 18.33 years. If you can raise your monthly SIP amount of Rs 10,000 by 10% every year, you can earn Rs 1 crore 194 months.

Even if you cannot invest a hefty amount at the beginning, with a regular increase you can easily save a lump sum amount quickly.

Want to become a crorepati by investing in mutual fund SIP? Invest regularly for a reasonable time

To save a lump sum amount such as Rs 1 crore you must have patience and discipline. You need to invest regularly for a reasonable period to achieve your goals. You cannot withdraw SIP in a hurry when the market is down. Historically, equity mutual funds have generated a healthy return when you stay invested for at least 7-10 years. This is the reason SIPs are typically suitable for your long-term investments.