How to earn Rs. 1 crore in 5 years

Reaching the Rs 1 crore mark in just five years is achievable with careful planning and consideration of key factors such as age, existing portfolio, asset allocation, and market conditions. By strategically managing your investments and making informed financial decisions, you can steadily work towards this ambitious goal.
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3 min
18-June-2025

One often wonders how to save Rs. 1 crore in 5 years. According to the well-known 15-15-15 Rule, an investor who tries to put Rs. 1 crore in their kitty should ideally opt for a Systematic Investment Plan (SIP) of Rs. 15,000 on a monthly basis for 15 years at 15% to get that one-crore fund. Even though this particular approach is mathematically valid, it may be unsuitable for certain investors. Furthermore, the rule takes for granted that the markets will deliver 15% consistently, and one remains invested through SIP for the entire tenure. The reality, however, may be different.

While market-linked investments like SIPs and stocks can grow your wealth, life insurance savings and investment plans—such as ULIPs—can help you work towards ₹1 crore while also offering insurance protection for your loved ones.

Can I earn Rs. 1 crore in 5 years?

Yes, it is possible to earn Rs. 1 crore in 5 years with a well-planned investment strategy. Achieving this goal requires a disciplined approach and selecting the right investment options. You can choose from systematic investment plans (SIPs), lumpsum investments, or step-up SIPs in mutual funds. Additionally, investing in high-growth assets like stocks, exchange-traded funds (ETFs), or a combination of different investment vehicles can help maximise returns. It is crucial to regularly monitor and adjust your investments based on market conditions and financial goals. Consulting with a financial advisor can also enhance your investment strategy.

For those who want growth plus security, ULIPs (Unit Linked Insurance Plans) can be a strategic choice—they combine market-linked returns with a life cover, ensuring your goal stays on track even if life throws a curveball.

Explore life insurance with savings plans to grow your wealth and achieve your financial goals. Compare plans and get quote!

Strategy to earn Rs. 1 crore in 5 years

Several time-tested strategies have consistently helped individuals reach their financial goals. Some of the most effective ones include:

1. Establish your financial objectives early

How are you going to use the money? Want to take an early retirement? Cover the cost of your kids' college education? Or purchase a second house? Establish your financial objectives first. The first step in making sacrifices or sticking to a budget is setting goals. Building wealth over time is easier the earlier you get started.

2. Plan your investment journey

After you have established your goals, you must create a plan to achieve them. A well-organised financial plan can help you focus on short-term goals like debt reduction and emergency fund establishment. Your strategy needs to be realistic and flexible for the long term. Continue to assess your development.

3. Put money into equity mutual funds

Investing in equity mutual funds can produce significant profits over time. They distribute money across a variety of diversified stocks and reduce the chance of incurring losses. The mutual fund that best suits your investing goals and risk tolerance must be chosen. Investing in mutual funds requires you to do extensive research and seek advice from a professional.

4. Tax planning

Taxes typically go unnoticed, yet they can have a big impact on your efforts to accumulate wealth. Taxes can be paid on your assets and investments in addition to the well-known sales and income taxes. You must, therefore, be aware of your tax obligations and create plans to lessen their impact. Once you make an investment in tax-saving schemes, you can benefit from tax exemptions and deductions, such as:

  • Public Provident Fund (PPF)
  • Equity Linked Saving Scheme (ELSS), and
  • National Pension System (NPS)

How to make Rs. 1 crore in 5 years with mutual funds

Investing in mutual funds can be a smart way to achieve significant financial goals, such as accumulating Rs. 1 crore in 5 years. You can adopt multiple strategies to reach this milestone, depending on your risk appetite, investment discipline, and financial planning. Here, we will explore three main options: SIP (Systematic Investment Plan), lumpsum investment, and step-up SIP. Each method has its own benefits and considerations, illustrated with examples to help you understand how they work in practice.

Option 1 - Saving Rs. 1 crore in 5 years via SIP

Systematic investment plans allow you to invest a fixed amount regularly, usually monthly, into mutual funds. This method benefits from rupee cost averaging and the power of compounding.

Example:

Raj, a 30-year-old professional, decides to invest Rs. 1,20,000 per month in an equity mutual fund with an expected annual return of 12%. By the end of 5 years, Raj's disciplined SIP investment grows significantly, reaching his goal of Rs. 1 crore. The consistent investment approach helps mitigate market volatility and provides a structured path to his financial target.

Option 2 - Saving Rs. 1 crore in 5 years via lumpsum investment

A lumpsum investment involves investing a large amount of money at once. This strategy can be highly effective if you have a substantial amount of savings and prefer to invest it all in one go.

Example:

Neha, a 35-year-old entrepreneur, has a savings of Rs. 57 lakh. She decides to invest this amount in a high-performing mutual fund, expecting an annual return of 12%. By maintaining this investment for 5 years, Neha's lumpsum grows to Rs. 1 crore. The benefit of a lumpsum investment is the immediate exposure to the market, allowing her money to grow right from the start.

Option 3 - Saving Rs. 1 crore in 5 years via step-up SIP

Step-up SIPs allow you to increase your SIP amount periodically, typically annually. This method is beneficial for those expecting their income to rise over time, enabling them to invest more progressively.

Example:

Amit, a 28-year-old software engineer, starts with an SIP of Rs. 75,000 per month. He plans to increase his SIP amount by 10% every year. Assuming an annual return of 12%, Amit's increasing contributions help him accumulate Rs. 1 crore by the end of 5 years. This strategy aligns with his growing income, making it easier to invest higher amounts over time without straining his finances.

By understanding and implementing these strategies, you can choose the method that best fits your financial situation and investment goals, paving the way to achieving Rs. 1 crore in 5 years with mutual funds.

Also read: Direct tax code meaning

How much should you invest in mutual funds to earn Rs. 1 crore?

To earn Rs. 1 crore through mutual funds in 5 years, the amount you need to invest depends on the expected annual return. Assuming an annual return of 12%, here are the options:

  • SIP (systematic investment plan): You need to invest approximately Rs. 1,20,000 per month. SIPs are ideal for those who prefer investing small amounts regularly and benefit from rupee cost averaging.
  • Lumpsum investment: You need to invest a lumpsum amount of around Rs. 57,00,000. This method is suitable for those who have large savings and prefer to invest them all at once.
  • Step-up SIP: You can achieve your target of earning Rs. 1 crore in 5 years by starting with an SIP of Rs. 75,000 per month and increasing it by 10% annually. Step-up SIP option is good for those expecting their income to rise over time, allowing them to progressively invest more.

The key is to start early, stay consistent, and choose the method that best fits your financial situation and goals.

Pro Tip

Create wealth and meet your financial goals with a ULIP investment plan, start investing from Rs. 3,000/month.

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Best investment options to earn Rs. 1 crore in 5 years

Achieving Rs. 1 crore in 5 years requires strategic investments. Here are some of the best options:

  • Mutual Funds
  • Exchange-traded funds (ETFs)
  • Stocks
  • Bonds
  • ULIP Plan
  • Real Estate

1. Mutual funds

Mutual funds are pooled investment vehicles managed by professional fund managers They offer diversification across a range of assets, which can help mitigate risk. Investing in equity mutual funds with a high annual return potential, typically around 12-15%, can significantly grow your wealth. Systematic investment plans and lumpsum investments are two popular methods. SIPs allow for regular investments, leveraging rupee cost averaging, while lumpsum investments benefit from immediate market exposure. Both methods, if chosen wisely, can help you reach your Rs. 1 crore goal.

2. Exchange-traded funds (ETFs)

ETFs are similar to mutual funds but trade like stocks on an exchange. They offer diversification across a particular index, sector, or commodity and have lower expense ratios compared to mutual funds. ETFs are highly liquid and can be bought or sold at market prices throughout the trading day. By investing in high-growth ETFs, you can potentially achieve significant returns. They are suitable for investors seeking a combination of growth, diversification, and flexibility in their investment portfolio.

3. Stocks

Directly investing in stocks can offer high returns, but it comes with higher risk compared to mutual funds and ETFs. Selecting high-growth stocks in sectors with robust performance potential can lead to substantial capital appreciation. It's crucial to conduct thorough research or consult with a financial advisor to identify companies with strong fundamentals, growth prospects, and competitive advantages. Stocks can provide significant wealth creation if chosen correctly and monitored regularly.

4. Bonds

Bonds are fixed-income securities that offer lower risk compared to stocks. They provide regular interest payments and return the principal at maturity. Government, corporate, and municipal bonds are common types. Although bonds generally offer lower returns than equities, they can be a stable and secure investment, contributing to your overall portfolio's diversification. To achieve Rs. 1 crore, you might need to combine bonds with higher-yielding investments.

5. ULIP plan

Unit Linked Insurance Plans (ULIPs) combine investment and insurance. A portion of the premium goes towards life insurance, while the remaining is invested in equity or debt funds. ULIPs offer flexibility to switch between funds based on market conditions and financial goals. They come with tax benefits under Section 80C and maturity proceeds under Section 10(10D) of the Income Tax Act. ULIPs can be a good option for investors looking for a mix of insurance coverage and market-linked returns, helping to reach the Rs. 1 crore target.

6. Real Estate

Real estate stands out as a compelling investment option due to its dual potential for capital appreciation and regular income. As property values generally increase over time—particularly in developing or high-demand areas—investors can benefit from long-term capital gains. Additionally, owning rental properties can offer consistent cash flow through monthly rent, which may help offset costs like mortgage payments, maintenance, and property taxes. However, investing in real estate often involves a substantial initial investment and ongoing management responsibilities. It's crucial for investors to evaluate their financial readiness and risk tolerance before committing to real estate as part of their portfolio.

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Tips to increase savings and reduce expenses

Increasing savings and reducing expenses are fundamental steps towards financial stability and growth. Here are some practical tips:

1. Create a budget

Creating a budget is the first step towards financial discipline. Start by listing all your income sources and categorising your expenses into fixed and variable costs. Track your spending to identify areas where you can cut back. Allocate a portion of your income to savings and investments before spending on non-essential items. Use budgeting tools or apps to monitor your progress. A well-structured budget helps you control your finances, ensuring you live within your means and save more efficiently.

2. Reduce expenditures

Reducing expenditures involves identifying and cutting unnecessary costs. Review your monthly bills and subscriptions to eliminate those you don't use or need. Opt for homemade meals instead of dining out, and take advantage of discounts and sales. Energy-saving habits, like turning off unused lights and appliances, can lower utility bills. Carpooling or using public transportation can reduce commuting expenses. Small changes in daily habits can lead to significant savings over time, freeing up more money to save or invest.

3. Tackle your debt

Managing and reducing debt is crucial for financial health. Prioritise high-interest debts like credit cards and personal loans, aiming to pay them off as quickly as possible. Consider debt consolidation to lower interest rates and simplify payments. Create a repayment plan and stick to it, avoiding new debts while paying off existing ones. Regularly review your credit report to ensure accuracy and maintain a good credit score. Reducing debt frees up more income for savings and reduces financial stress.

4. Invest in your future

Investing in your future is essential for long-term financial growth. Allocate a portion of your savings to investments such as mutual funds, stocks, or retirement accounts. Diversify your portfolio to spread risk and increase potential returns. Take advantage of employer-sponsored retirement plans and contribute enough to receive matching contributions. Regularly review and adjust your investment strategy based on your financial goals and market conditions. Investing wisely helps your money grow, ensuring a secure financial future.

Key takeaways

  • It is possible to accumulate Rs. 1 crore in 5 years with a disciplined investment strategy involving SIPs, lump sum investments, or step-up SIPs.
  • Starting early and staying consistent are crucial to take advantage of compounding and rupee cost averaging.
  • Based on a 12% annual return, you’ll need to invest around Rs. 1,20,000 per month via SIP or make a lumpsum investment of approximately Rs. 57 lakh.
  • Diversifying across mutual funds, ETFs, stocks, ULIPs, and real estate enhances your chances of achieving the Rs. 1 crore goal.
  • Setting clear financial objectives, planning for taxes, and optimising expenses play a vital role in boosting your investment potential.

Summary

Increasing savings and reducing expenses requires a proactive approach to managing your finances. Start with creating a detailed budget to understand and control your spending. Focus on reducing unnecessary expenditures and adopt cost-saving habits. Tackle high-interest debt systematically to free up more income for savings. Finally, invest in your future by building a diversified investment portfolio. These strategies, when consistently applied, can significantly enhance your financial stability and help you achieve your long-term financial goals. These aspects can effectively answer the question, “How to save Rs. 1 crore in 5 years?”

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Frequently asked questions

How long does it take to earn Rs. 1 crore?

The time taken to earn Rs. 1 crore varies greatly and depends on various factors like the investor’s profession, investments, salary, and business ventures. For example, someone who earns more will touch this milestone at a far greater pace than someone having a relatively lower income. Additionally, a wise investment earning good returns accelerates the path to reach Rs one crore substantially. Conversely, with savings without any remarkable investment growth, it might take longer. There are no fixed timeframes; it is a subjective matter and depends solely on the circumstances of the individual.

How many Indians earn 1 CR per year?

The percentage of Indians earning Rs one crore or more annually is negligible and comprises industrialists, top corporate executives, and leading legal, medical and financial professionals. However, there is no specific figure available on this.

Can I earn 1 crore in 10 years?

Yes, but it depends on your career path, profession, financial discipline, and investments. The approaches for consideration are: high-income professions, successful business ownerships, appropriate investing, financial discipline, continuous learning & growth, and discipline, commitment, effort and right strategy.

Is it hard to earn 1 crore?

Yes, it could be challenging, but not impossible. It depends largely on several factors like your skills, profession, financial discipline, economic environment, and investments. The main considerations are: income level, career growth, the ability to make appropriate investments, saving consistently, and patience.

What is the rich class income in India?

The top 1% of Indian income earners earn nearly 22% of the country’s total income on average. This implies that individuals having incomes in higher percentiles are considered to be wealthy or affluent.

How much to invest in SIP to get 1 crore in 5 years?
To achieve the Rs one crore target in five years through a SIP, one needs to work out the SIP amount required monthly based on his expected return rate.
How to earn 1 crore through mutual funds?

Earning Rs one crore by investing in mutual funds involves regular investing in a disciplined manner over a time period and wisely selecting those funds having the potential of generating the highest returns. The general approach is to set clear goals, regularly invest through SIP, choose the most appropriate equity, debt or hybrid funds, or combinations of these, review and monitor regularly, and remain invested for the long term.

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