Compound Return Benefits: Can Rs 4 crore retirement corpus be created with Rs 9.55 lakh one-time investment? Know how it is possible
A lump sum investment can also be appropriate for beginners, as long as they are willing to accept the risk involved with a big one-time market exposure.
Planning to invest in mutual funds SIP? You have both one-time (lump sum) investment and SIP options. That means, if you want to invest an amount for a long time then you can achieve your financial goal at retirement depending on your investment amount. The same can be achieved through SIP also (weekly, monthly, quarterly, half-yearly or yearly). You just need to do the calculations wisely.
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What is lump sum SIP?
A lump sum investment means a one-time investment. In this, you pay the entire amount at once. The lump sum SIP has both pros and cons.
Advantages of lump sum investment
- Good for long-term investors.
- It is convenient as you need to make payment once.
- Investment of large amount in one go.
Disadvantage of lump sum investment
- The cost of investment is high as it is a one-time investment.
- There is lower flexibility than SIP.
- The risk is moderate to high.
Things to consider before investment
Before investing, you must think about your goals, capacity, risk appetite, and available funds.
Market Timing
There is a risk of market volatility if you make a large investment in equity stocks.
Can inexperienced investors invest lump sum amounts in mutual funds?
A lump sum investment can also be appropriate for beginners, as long as they are willing to accept the risk involved with a big one-time market exposure.
How to achieve a Rs 4 crore corpus at retirement through lump sum MF plans?
If you are 27 years old and have invested Rs 9,55,000 in mutual funds for 33 years, then you can achieve your goal.
Understand through calculations
One-time investment: Rs 9,55,000
Expected returns: 12% per annum
Estimated returns: 3,92,42,414
Period: 33 years
Total maturity amount: 4,01,97,414
Starting investment at 40 and want Rs 4 crore corpus at retirement? Know how to achieve
If you are 40 years old and want to make a one-time investment now, then also you can achieve a Rs 4 retirement corpus. Here's how:
Calculations
One-time investment: Rs 41,50,000
Expected returns: 12% per annum
Estimated returns: 3,58,82,116
Period: 20 years
Total maturity amount: 4,00,32,116
Investing in mutual funds is subject to market risks. Consult your advisor before making any investment.