'Invest Rs 50,000 Monthly To Build Rs 5 Crore' - Ace Investor Vijay Kedia Reveals Power Of Compounding

Investing regularly can help you build great wealth over time. For example, if you invest Rs 50,000 every month in a Systematic Investment Plan (SIP) for 20 years at a 12% annual return, your money can grow to around Rs 5 crore. This shows the power of discipline and the magic of compounding.

Many people think earning a high salary makes you rich. But actually, it is your ability to save and invest that builds real wealth. Saving consistently, even small amounts, is more important than just earning more.

There is a common belief in some countries like the US that “live for today, tomorrow never comes.” This mindset encourages spending more and saving less. But it has a downside—many people struggle during emergencies because they have no savings. 

In fact, 40% of Americans don’t even have $1,000 saved for an emergency.

The lesson is clear: start saving early and avoid unnecessary spending on parties, fashion, and brands. By saving regularly and investing wisely, you can secure a comfortable future.

As investor Vijay Kedia says, “Either you can have a lavish young age or you can have a lavish old age. Always keep this in mind.” If you spend Rs 50,000 today, remember that amount could grow to Rs 5 crore in 20 years if invested properly.

Investing regularly through a Systematic Investment Plan (SIP) can help you build significant wealth over time. Let’s understand how investing Rs 50,000 every month for 20 years at an average return of 12% per year can grow to around Rs 5 crore.

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How to convert Rs 50,000 to 5 crores?

To explain with simple numbers, imagine you invest Rs 1,000 today and earn 12% interest every year. After one year, you get Rs 1,120. In the next year, you earn 12% not only on Rs 1,000 but also on the Rs 120 profit, making it Rs 1,254. This keeps increasing year after year.

When you invest every month, each monthly amount earns returns for a different length of time. The first Rs 50,000 you invest will grow for 20 years, the next Rs 50,000 will grow for slightly less time, and so on.

Using the 12% annual growth rate, after 20 years, your total investment of Rs 1.2 crore grows to about Rs 5 crore. This is more than four times the money you invested, thanks to compounding and regular investing.

The key lessons are to start early, invest regularly, and be patient. Even small amounts grow big if you give them enough time and the right return. Avoid spending on unnecessary things and focus on saving and investing.

Disclaimer: The views expressed in this article are purely informational, and Republic Media Network does not vouch for, promote or endorse any opinions stated by any third party. Stock market and Mutual Fund investments are subject to market risks, and readers are advised to seek expert advice before investing in stocks, derivatives and Mutual Funds.