The magic of earning ₹17,500 every month in ₹1 lakh? You will be amazed to see the calculation!

A retirement fund worth crores can be created even with a lump sum investment of ₹1 lakh. So with the right planning, this amount can give you a regular income of more than ₹17,500 every month for 30 years.

There is often confusion about when and where to invest your money and how much to choose for investment. This is the reason why many people still feel that there is no benefit in investing with a small amount, but the reality is that by investing a lump sum of ₹1 lakh, you can create a retirement fund worth crores in the long term. Not only this, this amount can give you a regular income of more than ₹17,500 every month for 30 years, but let's understand how.

How will this miracle happen?

Actually, its secret lies in the combination of lump sum investment in mutual funds and SWP

(Systematic Withdrawal Plan). In this, the magic of compounding can make even your small amount big over time.

Effect of SIP and Lump Sum

So, suppose an investor makes a SIP of ₹10,000 every month and gets an average return of 12% per annum—

Investment in 20 years: ₹24 lakh → Corpus: ₹91.98 lakh approx

Investment in 40 years: ₹48 lakh → Corpus: ₹9.79 crore approx

Similarly, on a lump sum investment of ₹5 lakh—

Corpus after 20 years: ₹48.23 lakh approx

Corpus after 40 years: ₹4.65 crore approx

All this is possible with the power of compounding.

What is SWP?

Let us tell you that SWP is a process in which you withdraw a fixed amount every month from your mutual fund investment, this includes both your principal and capital gain. With its help, you get regular monthly income and also get protection from market fluctuations.

Complete calculation of SWP income from ₹1 lakh for 30 years

Initial investment: ₹1 lakh (equity mutual fund, 12% expected return)

Corpus after 30 years: ₹29.95 lakh

Corpus after tax deduction: ₹26.49 lakh

Shift to SWP: ₹26.49 lakh (hybrid/debt fund, 7% return)

Monthly income: Around ₹17,525 (continuously for 30 years)

Total withdrawal: ₹63.09 lakh

Last balance: ₹909

Meaning, with a lump sum investment of just ₹1 lakh, you can create a lifetime income option for yourself. Actually, lump sum investment also creates a big corpus, but the advantage of SIP is that it helps in creating funds slowly and with discipline (Disclaimer: This is not an investment advice. Do your own research or seek expert advice for any financial planning)

5 FAQs

Q1. Can ₹1 lakh create a big fund in the long term?

Yes, due to the effect of compounding, this amount can reach crores.

Q2. Can a monthly income be obtained by investing ₹1 lakh?

Yes, with the right planning, one can get ₹17,500+ every month for 30 years.

Q3. What annual return should be assumed in this?

An average return of 12-15% is considered possible in the long term.

Q4. Is this investment safe?

Safety depends on which scheme/fund you invest in.

Q5. For whom is this investment best?

For those who want long term retirement fund and regular income.