A Rs 1 lakh monthly SIP can get you Rs 10 crore: Here's the timeline you need to follow

Investing can be easy, but wealth creation isn’t. The reason is that long-term wealth creation is an outcome of an investing process that is customised, goal-oriented and led by decisions based on informed risk.

Shivansh Dandona, Head - Investment Management at FinEdge, said, “A goal of Rs 10 crore is achievable, but investing with a deeper understanding of risk-adjusted returns is important. At 7 percent annual return, the total time required to achieve this goal would be approximately 27 years. At 10 percent annual return it would take about 22 years to reach Rs 10 crore. At 13 percent annual return, the timeframe shortens to approximately 19 years. However, in those 19 years of investing, there would be times that one may fall prey to their investing behaviour.”

“The key to creating meaningful wealth over the long term is that one must not go by simple mathematical calculations but be disciplined and focused towards financial objectives. Sacrificing long-term goals for short-term gratification or making decisions based on irrational expectations could lead to substantial wealth erosion,” added Dandona.

Pitfalls to avoid

• Randon picks: Random investing should be avoided because it is non-customised and leads to failure to achieve financial goals. Make sure that you invest based on a process that has your financial goals at the forefront at all times.

• Greed for returns: Chasing returns rather than achieving goals can be detrimental to your investments as this often leads to decisions based on emotions rather than clearly defined milestones.

• Speculative investing: Don’t fall into the trap of the trader mindset. Speculative investing gives rise to the ‘get rich quick’ mentality and can destroy wealth rather than create it.

• Sacrificing Long-Term for the Short-Term: Your goals are paramount and not following a plan makes it difficult to achieve them. Frequent redemption of funds that have been allocated towards long-term goals can have a significant impact on your corpus creation.

• Not having an investing expert by your side: An investment expert is not just technically sound but also understands and navigates through your investing behaviour, essential to achieve your financial objectives.