Starting with just Rs 3K/month investment at 30, how one can build Rs 4.50 crore corpus?

Starting to invest early can be the mantra for building a huge corpus by 45 or 50 years of age. But people don't start investing early. Rarely does one start investing at 25. But no age is too late if you begin investing at some point in time. Even if you start investing at 30, save Rs 100 a day, invest that amount in a mutual fund(s) through a systematic investment plan (SIP), and step up your amount every year, you may build a huge corpus even if you get an annualised return of 12 per cent. 

How to get a corpus of Rs 4.50 crore 

You can achieve this target with a 10 per cent SIP step-up strategy. Start with a Rs 3,000 SIP per month, and from next year onwards, make a 10 per cent increase in your SIP every year. If you get annualised return of 12 per cent, after 30 years, you will get a maturity amount of Rs 4,50,66,809. As per the SIP calculator, you will invest Rs 59,21,785 in 30 years, and your long-term capital gains will be Rs 3,91,45,025. 

Compounding returns

Such a huge corpus is built since you get compound returns on your investment. Compound returns are the returns that are calculated on the accumulated returns and not just the principal amount. 
 
Compounding allows an amount to grow more quickly than simple interest. The longer the duration of compounding, the higher the maturity amount is likely to be.

Equity mutual fund is a good option, says expert

According to a lot of investment advisors, equity mutual funds can be a good option to build a significant corpus. SIP, or systematic investment plan, is a better option in mutual funds for equity investment, even if you invest a small amount for a long time and at an early age.

Patience is key

The early years of a SIP may be a true test of your investment discipline. How the market acts in this period is less important for the investment outcome, but how you respond to the market's fluctuations will make all the difference. However, starting slowly but steadily can help you achieve your goals.

Don't skip SIP to reach goal

If you want to get higher gains and want to achieve your financial goals through mutual funds, then try not to skip a SIP.