How much should you invest monthly to build ₹1 crore? The 10, 15, and 20-year plans you need to know

It was summer, and Arnav sat in his office, enjoying the cool breeze of the air conditioner. But his mind was restless. ₹1 crore—that was his dream. He wanted a peaceful retirement, free from financial worries. He glanced at the spreadsheet on his laptop. The numbers on the screen seemed to mock his ambitious goal.

10 years? 15? 20? he wondered, running a hand through his thinning hair. He had been a disciplined saver, setting aside 20% of his salary every month, but accumulating such a large sum felt daunting. He had read about mutual funds, Systematic Investment Plans (SIPs), and the power of compounding, but the jargon felt like a foreign language.

Determined to make sense of it all, he decided to seek advice. He turned to his friend Kunal, a financial advisor. With his calm demeanor and patient explanations, Kunal simplified the complexities of investing.

"Arnav," Kunal said, "it's all about time and discipline. The longer you invest, the more time your money has to grow through the power of compounding."

Kunal demonstrated a simple calculation, assuming an average annual return of 12%—a reasonable estimate for equity mutual funds over the long term.

“To reach ₹1 crore in 10 years, you’ll need to invest approximately ₹45,000 per month,” Kunal explained, tapping on his calculator. By the end of the 10th year, Arnav would have invested ₹54 lakh and accumulated an estimated return of ₹46 lakh.

The figure seemed overwhelming. ₹45,000 per month was a steep commitment. Arnav considered extending his investment horizon. "What if I invest for 15 or 20 years instead?" he asked.

“That would bring down the monthly investment to around ₹21,000 for 15 years and approximately ₹11,000 if you extend it to 20 years,” Kunal said. “In 15 years, you’d invest ₹38 lakh and accumulate an estimated return of ₹62 lakh. Over 20 years, your total investment would be ₹26 lakh, growing to approximately ₹74 lakh.”

Arnav felt a wave of relief. A 20-year timeline seemed achievable. He realised the true power of compounding—the longer he stayed invested, the lower his monthly contribution needed to be.

Kunal further emphasised the importance of starting early. “Even small, consistent investments can make a huge difference over time. The best time to start was yesterday; the next best time is today,” he advised. However, understanding asset allocation and risk management is equally crucial.

While discipline is key in SIP investing, Kunal also highlighted the importance of diversification—spreading investments across different asset classes to mitigate risk. “And remember, market fluctuations are normal. Don’t panic and sell during downturns. Stay invested, trust the process,” he added.

Arnav left Kunal’s office with a newfound sense of clarity. He understood that achieving his financial goal wasn’t about getting rich quickly but about consistent, disciplined investing. He started an SIP in a diversified equity mutual fund, committing a realistic amount based on his budget.

This reinforced an essential lesson: the earlier one starts investing, the lower the monthly contribution required. On the other hand, delaying investments means having to invest larger amounts, as the benefits of compounding diminish over time. Additionally, it’s important to invest according to one's risk tolerance.

(Disclaimer: Expert opinions and illustrative figures are provided for informational purposes only. Actual results may vary based on individual investment choices and market conditions. These views do not represent Fortune India.)