How to Become a Millionaire with a Monthly Investment of Rs 500
Becoming a millionaire is a financial milestone many aspire to achieve. When contemplating this lofty goal, the first question that often arises is how much time and money it takes to accumulate one million rupees (Rs 10 lakh). While substantial investment s can expedite the journey to millionaire status, what if you prefer to take a more gradual approach with a modest monthly investment of Rs 500? In this article, we explore three common investment avenues—Public Provident Fund ( PPF ), Equity mutual funds, and Bank Fixed Deposits (FDs)—to determine how long it would take to amass Rs 10 lakh and become a millionaire.
Can You Become a Millionaire with Just Rs 500 a Month ?
To answer this question, we will employ an online investment planning calculator to ascertain the time required to accumulate one million rupees (Rs 10 lakh) by investing a mere Rs 500 per month.
Investing in PPF
The Public Provident Fund (PPF) currently offers an interest rate of 7.1% per annum. If you invest Rs 500 per month in PPF, it would take approximately 37 years to accumulate Rs 10 lakh.
Investing in Equity Mutual Funds
Equity mutual funds' returns can vary based on different periods and schemes. For the sake of calculation, let's assume a conservative rate of return at 12%. Investing Rs 500 per month through a Systematic Investment Plan (SIP) in equity mutual funds would enable you to accumulate Rs 10 lakh in approximately 26 years.
Investing in a Bank Fixed Deposit
Bank Fixed Deposit (FD) rates currently range from 5% to 8.5% across public, private, and small finance banks. For our calculations, let's assume a rate of 7.5%. At this rate, it would take around 34 years to accumulate Rs 10 lakh through a bank FD.
If you are considering investing a larger amount, you can use an online calculator to explore various scenarios. Additionally, you can determine how quickly you can become a millionaire by investing different amounts in different investment avenues.
In conclusion, the examples above demonstrate that investing in equity mutual funds through SIP can significantly accelerate your journey to becoming a millionaire due to their superior returns.
READ ON APP