Crorepati by retirement: How Rs 1 lakh grows to Rs 10 lakh, Rs 30 lakh and Rs 1 crore by age of 60

Equities tend to give higher returns that other assets over long term. You can consider investing in mutual fund schemes as per your risk profile.

Teena Jain Kaushal

• Updated Aug 31, 2024, 7:52 AM IST

If you invest Rs 1 lakh at the age of 20, you'll be astounded by the growth potential.

When it comes to investing, time is more valuable than you might think. The magic of compound interest can work wonders, especially when given ample time to grow. Let's explore how the value of a one-time Rs 1 lakh investment multiplies by the time you reach age 60, assuming a 12% annual return.

Investing at age 20

If you invest Rs 1 lakh at the age of 20, you'll be astounded by the growth potential. By the time you turn 60, this investment grows approximately 100 times to around Rs 1 crore. This showcases the immense power of compounding, as your money benefits from 40 years of uninterrupted growth.

Investing at age 30

A decade later, at age 30, the scenario changes dramatically. A Rs 1 lakh investment now grows only about 30 times, resulting in Rs 30 lakhs by the age of 60. The 10-year delay significantly impacts the final amount, highlighting the lost potential for additional compounding cycles.

Investing at age 40

Consider the case where you start investing at age 40. The same Rs 1 lakh, with 12% annual returns, will multiply just 10 times by the time you're 60, growing to Rs 10 lakhs. The 20-year delay from the ideal investment starting point reduces the ending value drastically.

Early investments take full advantage of compounding, leading to substantially greater returns over a long period. As demonstrated, even a small amount like Rs 1 lakh can turn into a fortune of Rs 1 crore when initiated at age 20, compared to significantly lesser sums when invested later.

The lesson? Start investing as early as possible. Equities tend to give higher returns that other assets over long term. You can consider investing in mutual fund schemes as per your risk profile. Even modest investments can grow tremendously over time, securing your financial future. The earlier you begin, the more powerful the compounding effect, converting your investments into a substantial nest egg by the time you reach retirement age.