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The Fastest Route to Becoming a Crorepati

Author: Adhil Shetty/Thursday, August 3, 2017/Categories: Cover Feature, Save, Invest, Profit, Grow, Expert View

The Fastest Route to Becoming a Crorepati

Who doesn’t want a lot of money in the bank? It’s a desirable financial state, and it allows you to fulfill your heart’s desires easily. However, unless you’re winning the lottery or inheriting a big sum, creating your first crore isn’t easy. As the saying goes, you need money to create more money. If you save regularly and invest in the right securities in a disciplined manner over the long term, the power of compounded growth will help your money grow rapidly, and help you realize the dream of becoming a crorepati.

So what exactly do you need to do to become a crorepati? Here are a few points to keep in mind.

The Three Variables

Wealth is best created through careful planning and investing. In the absence of a plan, with your money left to chance, you’re unlikely to achieve your lofty objective. A good investment plan helps you identify a worthy goal, a timeline, and costs. It alsohelps you assess your own risk appetite. Let’s understand this with the example below.

Suppose your age is 25 years and you want to become a crorepati by 35. You have 10 years to achieve your goal.Therefore you need to be aware of your investment options and how you can break down your goal into smaller, achievable steps. Your variables here are a) monthly investment, b) expected ROI, and c) time span. You can tinker with them to control how and when you want to reach your goal.

Calibrating Your Variables

Suppose you assessed that you can save Rs 15,000 per month, i.e. Rs 18 lakh over 10 years. Within 10 years, therefore, your investment needs to grow at an ambitious 28% per annum for Rs 18 lakh to become Rs 1 crore. This calls for an aggressive, equity-oriented investment plan. A growth target of 28% per annum would need you to pick instruments such as equity mutual funds and stocks, which are fraught with market risks.

Of course, it may be that you have a low risk appetite. You may play with the variables and pick a safer instrument. Suppose you picked a balanced mutual fund that invests in a mix of defensive and aggressive instruments, and can provide average long-term returns of 10%. To achieve your objective, you will need to invest Rs. 49,000 per month to create Rs. 1 crore in 10 years. If this isn’t an option and you want to stick to Rs. 15,000 a month, you may simply increase your investment tenure from 10 years to 19 years to achieve the same target.

Instruments To Pick

Mutual Funds: These are the most versatile investment instruments available in the market. The mutual fund marketplace is vibrant, with tons of schemes catering to every returns expectations and risk appetite. Broadly, mutual funds are distributed into equity, debt, and hybrid classes.

If you desire higher than average returns in the long term, you may pick mutual fund schemes that invest in equity. Of these, small-cap, mid-cap, and multi-cap funds have the potential to generate the highest returns, as they take the highest levels of risk. Investing for the long term, you must use monthly SIPs for better rupee-cost averaging. Lump sum investments can be timed with market dips or interest rate movements, which allow you to make meaningful gains that help you optimise your returns. 

Direct Equity: The wealthiest persons in the world derive their worth from their stock holdings. Therefore, in order to amass a fortune, you must have equity in your investment portfolio. If you are an informed investor and can analyse the stock markets and performance of listed companies, then direct investment in equities is a good option for you. Given the high levels of risk involved in this, it would be wise take informed decisions. Be thorough with your research. Don’t put all your eggs in one basket; have a plan to enter and exit your stock options. If you land a multi-bagger stock, you may fast-track your way to realising your crorepati dreams.

What To Avoid

Traditional investment instruments such as endowment insurance plans, gold, recurring and fixed deposits, small savings schemes such as Kisan Vikas Patra, National Savings Certificate, etc are very popular among conservative investors. However, these aren’t the best-suited instruments for wealth creation objectives.

Using these options, you may need a significantly longer timeframe to achieve your objectives. Besides, options such as bank deposits aren’t very tax-efficient. For example, if you’re in the 30% tax bracket and invest in a fixed deposit returning 7%, your post-tax returns are a paltry 4.9%. Assuming an average inflation rate of 6%, your deposit is actually eroding in value. However, exceptions can be made in the case of the best-in-class savings schemes such as Public Provident Fund that provide higher and tax-free returns.

Here’s how many years it would take you to become a crorepati using various investment avenues.

If You Invest Rs. 15,000 Every Month


CAGR (%)*


Final Corpus

Bank deposits*



Rs. 1.02 Crore

Small savings schemes, bonds*



Rs. 1.08 Crore

Bonds, mutual funds, equity



Rs. 1.02 Crore



Rs. 1.05 Crore



Rs. 1.01 Crore



Rs. 1.08 Crore



Rs. 1.11 Crore



Review your investment plan periodically to make meaningful changes. For example, you may be comfortable investing Rs. 25,000 a month in the near future, so you should naturally scale up your monthly contribution in order to achieve your goal quicker.

Understand the risks associated with each investment instrument, and whether it gels with your own risk appetite and investment objectives. It’s wise to diversify across various kinds of instruments for an optimized risk-reward matrix.

Lastly, give your investments time to compound. Start investing early in life, and let your money marinate for higher returns. For example, Rs. 15,000 invested monthly for 10 years with average returns of 10% creates a corpus of Rs. 30.9 lakh. However, the same investment plan continued for only 10 more years creates a corpus of Rs. 1.14 crore. If you invest as per your goal and stay financially alert, you can become a crorepati in a few short years.

The author is CEO,

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