According to Knight Frank’s 2022 Wealth Report, the net wealth required to be in the top 1% in India is $175,000 (Rs 1.45 crore). This means that if you have a net worth of more than $175,000, you are wealthier than 99% of the people in India.
So, if you are not in that position and want to reach that spot then here are some calculations. To calculate I’m assuming the following figures.
- Annual Inflation: 7%
- CAGR: 12%
- Investment Mode: Mutual Fund (Index Fund)
- In the next 5 years, you need Rs. 2.03 crores to reach that spot. For this, you need to invest Rs. 2.1 Lakh per month with an annual increment of 10% p.m. in Mutual Fund to achieve that figure.
- To reach that spot in the next 10 years, then this amount increases to Rs. 2.85 Crores. In this case, you need to invest Rs. 87,500 per month with an annual increment of 10% p.m..
- To achieve this in the next 15 years, this figure becomes Rs. 4 Crores. In this, you need to invest Rs. 48,500 per month with an annual increment of 10% p.m..
- In the next 20 years this becomes Rs. 5.6 Crores. In this case you need to invest even less than the previous figure. The amount is Rs. 30,000 per month with an annual increment of 10% per month.
- In the next 25 years it becomes Rs. 7.87 Crores. Guess what, in turns out you need 1/3rd less amount than previous figure. With Rs. 20,000 per month and an annual increment of 10%, you can achieve this.
One thing you must have noted, with each passing year the 1% spot increases by certain amount due to inflation. But the monthly investment amount is decreasing with next target period. That’s the Power of Compounding. It beats the inflation and makes wealth for you. And if you run a business and grows well, you can beat the above-mentioned figures even before that.
With an effective money management skill and utilising your core skill to make money, you can easily beat the rest 99% of Indians to reach that top 1% in India.
