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How to Earn ₹1 Crore in 5 Years
Reaching a financial milestone like ₹1 crore in just five years may seem ambitious, but with the right planning, discipline, and smart investments, it's an achievable goal. The key lies in combining high-yield investment strategies, consistent savings, and risk management. Whether you're a seasoned investor or just starting, this article will help you strategize your way to ₹1 crore over the next five years.
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- How To Earn One Crore in 5 Years?
Strategies to Earn ₹1 Crore in 5 Years
There are certain strategies which have proven to be beneficial for years in order to achieve any financial goal, some of them are as follows-
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Plan Your Financial Goals to Start Early
Defining your financial goals early will help you save systematically—whether it's for your child's education, buying a new property, or generating wealth for your family. One should try to save about 20-25% of their after-tax income to invest in high-return plans.
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Tax Planning
Apart from sales and income tax, there are other taxes payable on investments and assets, which can be capitalized if one understands the tax obligations. You can capitalize on this by investing in tax-saving schemes such as the Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), and National Pension Scheme (NPS).
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Track Your Spending
Use budgeting apps or spreadsheets: Monitor where your money goes to identify areas where you can cut back. Review bank statements and look for recurring charges or unnecessary expenses.
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Create a Budget
Allocate funds for essentials like rent, food, and utilities, and discretionary items like entertainment and dining out. Set realistic goals and determine how much you want to save each month and adjust your spending accordingly.
Best Investment Options to Earn ₹1 Crore in 5 Years
If you aim to earn ₹1 Crore in just five years, it’s important to explore various investment options that offer high returns while balancing risk. Whether you're a seasoned investor or just starting, these options can help pave your way to a million.
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Step-Up SIP
A step-up SIP allows you to increase the SIP amount annually. An early investor working professional can always consider this option as the income is expected to grow over time.
For example- An Individual investing ₹98,500 per month in the first year decides to increase the SIP amount by 12% annually with a 12% expected rate of return and can earn a corpus of ₹1,00,48,417 in 5 years.
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ULIP Plans
ULIP is a Unit Linked Insurance Plan which provides you with insurance as well as investing opportunities. ULIP offers the flexibility to switch funds in the market based on performance which creates the opportunity to invest in the right funds at the right time to reach 1 crore in 5 years.
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Stocks
Stocks are usually High-Return Investment options, but they also come with high risk. However, if one can handle the risk and invest in stocks with growth potential sectors and future developments with the help of an investor or portfolio manager, one can earn 1 crore in 5 years.
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Real Estate
Real estate offers a unique blend of appreciation and income potential, making it one of the best investment options. As property values tend to appreciate over time, especially in growing regions, investing in real estate can provide substantial capital gains. Moreover, rental properties can generate a steady stream of income, which can be used to cover mortgage payments, property taxes, and other expenses. While real estate can be a profitable investment, it's important to note that it also requires significant upfront investment and involves ongoing management responsibilities.
Conclusion
It is possible to gather a corpus of as high as 1 crore in 5 years for working individuals. There are certain things to keep in mind while starting the journey beginning from being patient and maintaining discipline towards investing. The trick is to start early and create a diversified portfolio to avoid losses while continuous self-assessment in terms of risk tolerance and future financial goals. Focusing on things as small but crucial as saving more and reducing unnecessary expenses will help to sail even faster towards the goal of saving 1 crore in 5 years.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
Past 10 Years' annualised returns as on 01-12-2024
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).
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