What to do if you got 1 Crore Rupees?
By any chance, if you earned or got 1 Crore Rupees by luck, It can be through winning a Lottery ticket, earning from a side hustle, selling something, etc. You can follow this suggestion that I am going to share, which will help you to be financially free forever because it is said by experts who are already rich, that making the first 1 crore rupees is difficult, and if you somehow manage to make it you are good to go earning next crores with ease.
Follow the guide given below:
Invest in Mutual Fund: Lumpsum
What is a Mutual Fund?
A mutual fund is a professionally managed investment plan that pools money from numerous investors to invest in diversified portfolios of stocks, bonds, or other securities, according to a stated investment objective. Mutual funds are managed by professional fund managers who allocate the fund’s assets and attempt to produce capital gains or income for the fund’s investors. Investors in mutual funds purchase shares, which represent their proportional ownership in the fund’s holdings. The main advantages of mutual funds include diversification (spreading investments across various securities to reduce risk), professional management, liquidity (ability to buy or sell shares on any business day), and accessibility to small investors who may not have the expertise or capital to invest directly in individual securities. Mutual funds charge fees and expenses, such as management fees and operating costs, which are typically disclosed in the fund’s prospectus.
How Much to Invest From Rs 1 Crore Rupees?
From the pool of Rs 1 crore rupees invest at least 30 lakhs rupees fixed for 10 years:
If you invest Rs 30 lakhs in a mutual fund that offers a 14% annual return, which is the minimum return that a mutual fund gives, you can expect your investment to grow to approximately ₹1,11,21,663.94 after 10 years. This is due to the power of compound interest, which allows your earnings to grow on top of your initial investment over time.
Here’s a breakdown of how much your investment would grow year after year:
| Year | Amount at the end of the year (in Rs) |
|---|---|
| 1 | 3,420,000.00 |
| 2 | 3,876,000.00 |
| 3 | 4,374,400.00 |
| 4 | 4,918,016.00 |
| 5 | 5,519,027.36 |
| 6 | 6,180,241.20 |
| 7 | 6,904,762.36 |
| 8 | 7,695,730.32 |
| 9 | 8,557,221.58 |
| 10 | 11,121,663.94 |
Important Note: It is important to remember that this is just an estimate, and the actual returns you earn could be higher or lower depending on the performance of the mutual fund. Keep in mind that mutual funds are subject to market risks, so the value of your investment can go up or down.
Invest In the Stock Market: Lumpsum
What is the Stock Market?
The stock market refers to a financial marketplace where buying, selling, and trading of shares or stocks of publicly listed companies take place. It serves as a platform where investors, ranging from individuals to institutional entities, can buy ownership in companies and potentially benefit from their growth and profitability. Companies typically issue stocks through initial public offerings (IPOs), allowing them to raise capital by selling shares to investors. Investors purchase stocks with the expectation of capital appreciation (increase in stock price) and/or income through dividends paid by the company. Stock prices fluctuate based on various factors such as company performance, economic conditions, geopolitical events, and investor sentiment. The stock market plays a vital role in the economy by providing companies with capital for growth, enabling efficient allocation of resources, and serving as an indicator of economic health and investor confidence.
How Much to Invest From Rs 1 Crore Rupees?
From the pool of Rs 1 crore rupees invest at least 10 lakhs rupees fixed for 5 years:
If you make a good stock portfolio by the combination of large-cap, Mid-cap, and Small-cap of 10 lakhs rupees, and it’s giving you an average annual return of 25%, which you can get easily, after 5 years, your portfolio value can be estimated using the compound interest formula. Here’s how you can calculate it:
- Initial Investment (P): 10,00,000 rupees
- Annual Return Rate (r): 25% or 0.25 (as a decimal)
- Time Period (n): 5 years
The formula for compound interest is:
A=P×(1+r)nA = P \times (1 + r)^nA=P×(1+r)n
where:
- AAA is the amount of money accumulated after n years, including interest.
- PPP is the principal amount (the initial amount of money).
- rrr is the annual interest rate (decimal).
- nnn is the number of years the money is invested or borrowed for.
Plugging in the values:
A=10,00,000×(1+0.25)5A = 10,00,000 \times (1 + 0.25)^5A=10,00,000×(1+0.25)5
A=10,00,000×(1.25)5A = 10,00,000 \times (1.25)^5A=10,00,000×(1.25)5
Now, let’s calculate (1.25)5(1.25)^5(1.25)5:
(1.25)5=3.052(1.25)^5 = 3.052(1.25)5=3.052
So, A=10,00,000×3.052A = 10,00,000 \times 3.052A=10,00,000×3.052
A=30,52,000A = 30,52,000A=30,52,000
Therefore, after 5 years, your stock portfolio, assuming a consistent 25% annual return, would be approximately 30,52,000 rupees.
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Invest in the Bank Fix Deposit (F.D)
What is Fix Deposit?
A fixed deposit, also known as a term deposit, is a savings option offered by banks where you invest a lump sum of money for a predetermined period at a guaranteed interest rate. The money is locked in for the chosen term, typically ranging from a few days to several years, and you earn interest on it during that time. Fixed deposits are known for their safety and predictable returns, making them ideal for those seeking to grow their savings with minimal risk.
How Much to Invest From Rs 1 Crore Rupees?
From the pool of Rs 1 crore rupees invest at least 20 lakhs rupees fixed for 5 years:
If you have invested 20 lakhs (2 million) rupees in a Fixed Deposit (FD) that earns a fixed annual return of 7%, after 5 years, the amount accumulated can be calculated using the formula for compound interest for FDs, where the interest is compounded annually. Here’s how you can calculate it:
- Initial Investment (P): 20,00,000 rupees
- Annual Interest Rate (r): 7% or 0.07 (as a decimal)
- Time Period (n): 5 years
The formula for compound interest for FDs is:
A=P×(1+rn)n×tA = P \times \left(1 + \frac{r}{n}\right)^{n \times t}A=P×(1+nr)n×t
In this formula:
- AAA is the amount of money accumulated after n years, including interest.
- PPP is the principal amount (the initial amount of money).
- rrr is the annual interest rate (decimal).
- nnn is the number of times that interest is compounded per year. For annual compounding, n=1n = 1n=1.
- ttt is the number of years the money is invested for.
Since FDs typically compound interest annually:
A=20,00,000×(1+0.071)1×5A = 20,00,000 \times \left(1 + \frac{0.07}{1}\right)^{1 \times 5}A=20,00,000×(1+10.07)1×5
A=20,00,000×(1.07)5A = 20,00,000 \times (1.07)^5A=20,00,000×(1.07)5
Now, let’s calculate (1.07)5(1.07)^5(1.07)5:
(1.07)5≈1.40255(1.07)^5 \approx 1.40255(1.07)5≈1.40255
So,
A=20,00,000×1.40255A = 20,00,000 \times 1.40255A=20,00,000×1.40255
A≈28,05,100A \approx 28,05,100A≈28,05,100
Therefore, after 5 years of investing 20 lakhs rupees in a Fixed Deposit with a 7% annual interest rate compounded annually, your total amount would be approximately 28,05,100 rupees.
Keep some Cash as Savings
You also need to save some cash in a bank savings account for emergency situation, to fulfill your needs or for starting a new business, etc. So save 15,00000 rupees.
Keep some Cash for Expenses
Lastly, keep some money for expenses like fulfilling your desire For Example buying a bike, car, phone, etc., and also use the money to learn new skills that will help you to start a side hustle or use the money to start a new startup/Business. So save 25,00000 rupees.
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