How to beat One crore wealth with just 1 lakh investment?

One crore wealth can be beaten with just 1 lakh investment. Yes, it can be done if you do your asset allocation right and get a higher return by following the right investment strategy based on your risk tolerance and financial situation.

Read this complete article to know more details.

In childhood, I thought a few times about how I can be richer than my neighbors.

You may have also thought like this in your life.

Is it really possible to become wealthier than your neighbors, friends, and relatives?

Let’s understand this first with an example.

If you see the above image, a thief is running at a speed of 30 km speed.

In addition, a policewoman is running behind him to catch at a speed of 60 Km speed per hour.

However, the distance between them at present is 30 Km.

Here, the policewoman will catch the thief after 1 hour.

But if she runs behind the thief at less than 30 Km speed hour, she will never catch him.

Similarly, If your investments give you higher returns, then you can beat 10 core wealth with just 10 lakh investment.

Let’s see how it can be done.

One Lakh investment will beat One crore wealth…

Let’s understand it with different scenarios…

ROI the same for you and for your neighbour…

Let’ assume that your one lakh investment and your neighbors 1 crore wealth has given a return of 6% for both of you in 100 years.

In addition, let’s assume that you and your neighbor invested in the same ratio in real estate and gold.

Year	1 lakh in Million	1 crore in Million
0	0.1	10
1	0.106	10.6
2	0.11236	11.236
3	0.1191016	11.91016
4	0.126247696	12.6247696
5	0.133822558	13.3822558
6	0.141851911	14.1851911
7	0.150363026	15.0363026
8	0.159384807	15.9384807
9	0.168947896	16.8947896
10	0.17908477	17.908477
11	0.189829856	18.9829856
12	0.201219647	20.1219647
13	0.213292826	21.3292826
14	0.226090396	22.6090396
15	0.239655819	23.9655819
16	0.254035168	25.4035168
17	0.269277279	26.9277279
18	0.285433915	28.5433915
19	0.30255995	30.255995
20	0.320713547	32.0713547
21	0.33995636	33.995636
22	0.360353742	36.0353742
23	0.381974966	38.1974966
24	0.404893464	40.4893464
25	0.429187072	42.9187072
26	0.454938296	45.4938296
27	0.482234594	48.2234594
28	0.51116867	51.116867
29	0.54183879	54.183879
30	0.574349117	57.4349117
31	0.608810064	60.8810064
32	0.645338668	64.5338668
33	0.684058988	68.4058988
34	0.725102528	72.5102528
35	0.768608679	76.8608679
36	0.8147252	81.47252
37	0.863608712	86.3608712
38	0.915425235	91.5425235
39	0.970350749	97.0350749
40	1.028571794	102.857179
41	1.090286101	109.02861
42	1.155703267	115.570327
43	1.225045463	122.504546
44	1.298548191	129.854819
45	1.376461083	137.646108
46	1.459048748	145.904875
47	1.546591673	154.659167
48	1.639387173	163.938717
49	1.737750403	173.77504
50	1.842015427	184.201543
51	1.952536353	195.253635
52	2.069688534	206.968853
53	2.193869846	219.386985
54	2.325502037	232.550204
55	2.465032159	246.503216
56	2.612934089	261.293409
57	2.769710134	276.971013
58	2.935892742	293.589274
59	3.112046307	311.204631
60	3.298769085	329.876909
61	3.49669523	349.669523
62	3.706496944	370.649694
63	3.928886761	392.888676
64	4.164619967	416.461997
65	4.414497165	441.449716
66	4.679366994	467.936699
67	4.960129014	496.012901
68	5.257736755	525.773675
69	5.57320096	557.320096
70	5.907593018	590.759302
71	6.262048599	626.20486
72	6.637771515	663.777151
73	7.036037806	703.603781
74	7.458200074	745.820007
75	7.905692079	790.569208
76	8.380033603	838.00336
77	8.88283562	888.283562
78	9.415805757	941.580576
79	9.980754102	998.07541
80	10.57959935	1057.95993
81	11.21437531	1121.43753
82	11.88723783	1188.72378
83	12.6004721	1260.04721
84	13.35650042	1335.65004
85	14.15789045	1415.78904
86	15.00736388	1500.73639
87	15.90780571	1590.78057
88	16.86227405	1686.22741
89	17.87401049	1787.40105
90	18.94645112	1894.64511
91	20.08323819	2008.32382
92	21.28823248	2128.82325
93	22.56552643	2256.55264
94	23.91945802	2391.9458
95	25.3546255	2535.46255
96	26.87590303	2687.5903
97	28.48845721	2848.84572
98	30.19776464	3019.77646
99	32.00963052	3200.96305
100	33.93020835	3393.02084

If you see the above table, 1 lakh (0.1 million ) investment has become only 33 million in 100 years.

While at the same one crore ( 100 million ) wealth has grown up to 3,393 million.

You can see in the chart that 1 lakh investment is flat in 100 years and one crore wealth has grown significantly.

So, it is very clear that we can not beat one crore wealth with 1 lakh investment if invested in a mix of asset classes where both will get a 6% return on investment (ROI).

When 1 lakh investment will beat one crore wealth?…

Here, Let’s assume that your neighbor invested the same real estate and gold as said above case and got an ROI of 6% only.

while at the same let’s assume that you have invested in a mix of assets real estate, gold, and equity ( mutual funds, etc) and got more return than your neighbor.

In this case, you will definitely get more wealth than in the first case. ( more than 33 million).

If you see the above table, one core has grown just the same as in scenario 1) as we have assumed 6% ROI like in the first scenario.

But 1 lakh investment has grown up to 552 million unlike 33 million in the first scenario.

As we got a 9% ROI in this scenario.

In addition, you can see in the chart, the 1 lakh investment is not flat like in the first scenario chart.

At what ROI both 1 lakh investment and one crore wealth be equal in 100 years?…

If you see the above table, you can see both 1 lakh investment and one crore wealth has given the same wealth in 100 years.

But this will happen only if your  1 lakh investment gives you an average ROI of 11% in 100 years.

and your neighbors one crore wealth grows at ROI of 6%,

In addition, You can see both the grey line and yellow line in the above chart met at the same point means both the investments have given the same wealth.

But you may have got a doubt that how to get 11% ROI in your investment i.e 5% extra than your neighbor?

Yes, a 5% extra return is possible if you invest in the equity market along with gold and real estate.

Every Investment will not give you a constant ROI every year.

The return can be low, high, zero, and negative also

Read this article about low return and zero return scenarios, How your overall return will be compromised.

So, if you invest in gold, real estate, and equity-based on your risk tolerance.

In case one asset is giving a negative return, the other two assets may give some positive return.

and if you re-balance the portfolio again and again periodically,  In a long period, you will end up accumulating more wealth than investing in only in fewer assets like gold and real estate.

If that happens, As I said in this article, Your 1 lakh investment also can beat your neighbors one crore wealth after some time.

How much money you should invest today to beat one wealth in 35 years with ROI?…

Some of you may argue that we will not live for 100 years and my age is 25 years, and I would like to beat my neighbours wealth of 1 crore in 35 years.( at your retirement).

In addition, You may say that you are ready to invest more than 1 lakh.

Let’s check that scenario also with the below images.

 

If you see the above table image, If you can invest 19.95 lakh at 11% for 35 years, Your investment will be able to beat 1 crore wealth.

In addition, you can see in the chart that the yellow line crosses the grey line and ended much higher than the grey line.

and the wealth created also is very huge than your neighbor if you invest 19.95 lakh today at ROI 11% for 100 years.

Conclusion…

I do not know that you really get a 5% extra return if you invest in the equity market along with real estate and gold.

One thing I know is investing in a multi-asset portfolio will increase your overall portfolio return.

In addition, equity is also capable of giving more inflation-adjusted returns like real estate.

So, neglecting equity and not investing enough both are bad ideas.