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How To Become A Crorepati In 5 Years?

Want to know how you can become a crorepati in the next 5 years? Get started with the dos & don’ts and investment options that can help you get there.
September 28, 2021

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A Crorepati is someone who consistently has a net worth of one crore or more. That said, becoming a crorepati means different things to different people. 

For example, for some it could mean simply crossing the 1 Cr mark once in life, for others it could just be about driving fancy cars and dining at exclusive high-end luxury venues. 

Whether it's about living luxuriously or simply the dream of retiring early, having surplus cash reserves is the means to many ends. If you’re young, you have time on your side, but time is of the essence! 

There are multiple ways to earn that first crore in 5 years. However, for the purpose of this story, we’ll talk about how you can invest to become a crorepati. 

How Much To Invest To Become A Crorepati In 5 Years?

While it’s likely that you have a reasonable investment corpus before you start eyeing the 1 Crore plus mark, let’s assume you have no savings or investments on Day 0. 

Let’s look at how much money you would need to invest in different financial instruments to hit the 1 crore mark. 

For example, by parking ₹1,59,000 every month in a bank savings account you could touch the 1 Cr mark. However, this isn’t the optimal way to become a crorepati in 5 years.

This is because the rate of inflation in India has been 5% on average over the past decade. The interest you’ll earn on most savings accounts in India will be at best 2-2.5%.

Subtract inflation from the returns and you’ll notice that you’re actually losing 2.5-3% of your savings monthly. That’s why we need to turn to another option - investing in quality assets like mutual funds.

Returns

Monthly Investment

Total 

6%

₹1,43,000

₹1,00,26,999

8%

₹1,36,000

₹1,00,70,300

10%

₹1,29,000

₹1,00,61,653

12%

₹1,21,300

₹1,00,05,596

15%

₹1,12,000

₹1,00,44,349

The table shows you what’s needed to become a crorepati in 5 years with the: 

  • Minimum return required to beat inflation
  • Realistic returns earned by investors 5 years
  • Monthly investment required

You can also consider this to be a snapshot of the whole risk spectrum from conservative (debt funds, liquid funds, P2P lending) to aggressive (international mutual funds, US stocks, IPOs). 

What To Focus On To Become A Crorepati In 5 Years?

You’ve more or less understood one of the most important parts of becoming a crorepati in 5 years - the monthly investment amount. Let’s chart a roadmap and tackle other factors. 

1. Find Ways To Earn More Money

Earning more money is easier said than done. Most working professionals only have time to work one job and balance their personal lives along with it.

That said, side gigs can help reduce the financial pressure that comes with trying to become a crorepati in 5 years. You can dip into that

extra money earned through freelancing or tuitions to: 

  • Invest more
  • Pay your bills

All this while ensuring that your minimum monthly amount required to become a crorepati in 5 years remains intact. But there’s another way to earn more money - through investments. 

It’s called passive income, a phenomenon where your money works for you by earning interest on top of itself. We’ll dive more into this later on but remember that passive income is your ally.

2. Don’t Spend On Things You Don’t Need 

Becoming a crorepati in 5 years is a steep task, to begin with. But spending on frivolous things will make the task more difficult. You can curb this by:

  • Developing healthy financial habits (pay yourself first)
  • Looking at your money grow (it’s addictive)
  • Tweaking your lifestyle (avoid luxury… for a little while)

Remember, it’s ok to not eat at a fancy restaurant or buy the new iPhone because financial diligence is the only thing that’ll help you become a crorepati in 5 years. 

3. Invest In Quality Assets Picked By Experts

We’ve established that quality assets like mutual funds, stocks, P2P lending, asset leasing, and others can help you build a solid portfolio for the future. 

You can speak to a trained financial professional like a Cube Wealth Coach to plan your investments to become a crorepati in 5 years. The advice will help you invest in assets that are right for you.

4. Get An In-Depth Portfolio Analysis

Building a solid portfolio of investments isn’t enough. Market dynamics can change, your priorities may change, and new assets may emerge that can help you become a crorepati in 5 years efficiently.

That’s why it’s necessary to revisit your portfolio with regular portfolio analysis. It can help you buy or sell investments based on your goals and market health. 

<You can get a free portfolio analysis here>

5. Save Taxes With Smart Investments 

The Government of India allows you to save up to ₹46,800 in taxes every year under Section 80C with investments like ELSS funds, NSC, NPS, and others. 

The ₹46,800 that you save in tax every year can total up to ₹2,34,000, which is a good enough amount in itself. But if it’s locked in an ELSS fund, it can earn up to 12% returns across 5 years, that is, ₹3,21,696. 

That’s the power of saving tax. However, it’s also important to go about it the right way by not conflating tax savings with health insurance or ULIPs. More on that here: Tax Saving Mistakes to Avoid 

What To Avoid To Become A Crorepati In 5 Years?

It’s important to know what to avoid when trying to become a crorepati in 5 years. Let’s look at the “no-nos” in depth. 

1. Avoid Taking On Bad Debt

Bad debt is money that you’ve borrowed from your future self to pay for a current expense. A pending credit card payment or personal loans are popular examples of bad debt. 

Essentially it is the kind of debt that does not help you make more money. So, if you’re taking a loan to get a degree that will help you earn a higher salary, that’s not bad debt. 

But, if you’re taking a loan to buy a car that you can’t afford using your savings - that’s bad debt! In fact, it’s money that’s gone forever or depreciating every day. 

Remember, the goal is to become a crorepati in 5 years. Any bad debt will hamper the ability to achieve this goal. That’s why it’s good to avoid things that you can’t readily afford.  

2. Poor Spending Habits

There’ll be some sacrifices that you’ll have to make when trying to become a crorepati in 5 years. One of these sacrifices would entail avoiding goods or services that are non-essential.

Examples of this would include eating at fancy restaurants, buying the latest gadgets, getting multiple (underutilized) subscriptions, to name a few. This ties into the point of avoiding bad debt. 

3. Awful Assets

Compounding may be the 8th wonder of the world but its arch-nemesis is inflation. Any returns percentage below the inflation rate is a guaranteed way to deplete your savings/investment. 

For example, bank FDs can fetch you 4.5-5% returns at best. If the rate of inflation is 5%, your wealth will either stagnate or worse, the value of your investment will deteriorate. 

That’s why it’s best to invest in assets that can outperform inflation with a proven track record. For example, a reliable financial advisor like Wealth First can help you invest in market & inflation-beating MFs. 

Best Investments To Become A Crorepati In 5 Years

It’s time to dig into assets that can help you become a crorepati in 5 years. These assets have been known to outperform inflation and generate 8-12% returns over the long term.

1. P2P Lending 

P2P lending allows you to become a lender (investor) who loans money to creditworthy borrowers. The benefit of this is lucrative returns because there’s no middleman (like a bank) involved.

Cube’s P2P lending partner and RBI Certified P2P NBFC Faircent gives you access to plans that can generate recurring payouts with up to 12% returns (annualized).

Holding Period (in months)

Returns (annualized)

3

10%

6

11%

12

12%


See More

2. Loans Via Merchants

Loans via Merchants by LiquiLoans allows you to lend directly to top creditworthy borrowers that require loans with merchants like Dr Batra and upGrad. 

Cube’s P2P partner LiquiLoans is the world’s first P2P lending organization to be rated by a credit agency - CRISIL. LiquiLoans is also an RBI Certified P2P NBFC. 

LiquiLoans’ plans can generate recurring payouts and returns of up to 9.50% (annualized). Here’s a snapshot. 

Holding Period (in months)

Returns (annualized)

0

8.15%

3

8.8%

6

9.3%

12

9.5%

24

9.3%

Read More

3. Asset Leasing

Asset Leasing by Grip allows you to become a co-investor in physical assets like cars, equipment, and furniture that’s leased to high creditworthy organizations like Furlenco and Bounce. 

You can earn up to 12% post-tax returns with Asset Leasing by Grip with recurring monthly payments (passive income). Here’s a snapshot of the plans. 

Holding Period (in months)

Returns (annualized)

0

8.15%

3

8.8%

6

9.3%

12

9.5%

24

9.3%

See More

4. Mutual Funds

Mutual funds are a pool of money that’s gathered from multiple investors. A fund manager and his team invest the money in assets like stocks, bonds, and other mutual funds. 

We’re talking about how to become a crorepati in 5 years so certain types of mutual funds like liquid funds are out of the equation. That’s because they can generate up to 4-6% returns. 

Other mutual funds like debt funds and equity funds have been known to generate 8-12% returns over the long term (5 years).

Mutual Fund Type

Returns (5+ years)

Debt

6-8%

Equity

10-12%

International

12-15%

ELSS

10-12%

Read More

5. Stocks

Solid Indian stocks like Reliance Industries, TCS, HDFC Bank, Infosys, and others are known to generate potentially high returns over 5+ years. Furthermore, certain stocks pay dividends. 

This can act as a passive income source for you on the quest towards becoming a crorepati in 5 years. Furthermore, Indians can invest up to $250,000 (₹1,84,59,262.50) in US stocks every financial year.

This can help geographically diversify your portfolio while taking part in the growth story of some of the biggest brands in the world like Apple, Amazon, Google, Tesla, Microsoft, and others. 

Note:

Facts & figures are true as of 27-09-2021. All information mentioned is for educational purposes and relies on publicly available information. None of the information shared here is to be construed as investment advice. We strongly recommend you consult a Cube Wealth coach before investing your money in any stock, mutual fund. PMS or alternative asset.

Shriram Shekhar
Shriram is a Content Marketer at Cube Wealth, the Financial Freedom App with a smart Perfect Portfolio Planner. He has developed cutting edge IT products for over 2 years before turning to his passion for the written word. Shriram’s love for philosophy, product development, and empowering people through quality content is what got him to Cube Wealth.

Top 5 Reasons To Try Our Powerful Investment App!

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  • Low Minimum Investments
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