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December 29, 2022

# What is the value of 30 lakhs after 20 years?

Surprisingly, due to inflation, INR 30 lakh in 2001 is only worth roughly INR 8.1 lakhs now. This indicates that because inflation occurs on top of inflation from the previous year, the result is exactly like compound interest. In this article, we’ll look at the causes of this as well as what \$30 lakh will be worth in 20 years.

### What is the value of 30 lakhs after 20 years?

Simply put, 20 years ago, you could have purchased a lot more with 30 lakh rupees than you can now. As a result, even if you were to save for 15, 20, or 30 years and eventually be able to buy 30 lakh rupees or more, its actual worth would be far smaller.

With today’s inflation rate of 6%, it would be equivalent to Rs 9.35 lakh. As a result, at 6% inflation, if you wanted Rs. 30 lakhs in 20 years, you might get Rs. 9.35 lakh now.

If nominal inflation were assumed to be 6%, this amount would increase to Rs 96.21 lakh. Therefore, in 20 years, the demand of 30 lakhs will be Rs 96.21 lakh.

The solution is to save money that is inflation-adjusted. To establish the requirements for it, you must first inflate the cost of the aim. Start a SIP after that to begin saving for the inflated goal cost.

### How can SIP make you rich?

Long-term equity investments may be made via SIP. You may use it to consistently invest a small amount in mutual funds without trying to time the market.

To build wealth, it would be good if you continued to make SIPs during both bull and down market times. Let’s look at an illustration of how SIP might result in financial success. Consider making a monthly investment of INR 10,000 in an equities fund.

If you invest just INR 10,000 per month through a SIP in an equities fund for 30 years, you might amass a corpus of INR 3.53 crore.

Compounding power makes money grow and makes you richer. You must start saving early so that you may continue to do so throughout your working life if you want to build up a sizeable corpus for retirement.

Please be advised that we expect the equities fund to yield an average of 12%. Actual outcomes might be impacted by the markets and the fund.

### What is inflation?

Sometimes the amount of inflation is expressed in general terms, such as the overall rise in prices or the rise in the cost of living across the board.

For some goods, like food, or services, like haircuts or travel costs, it may be calculated more accurately. Inflation is a measurement of how much a certain set of goods and services have increased in price over time, independent of the context.

You should anticipate paying more for the same goods and services this year than you did last year due to inflationary pressure. If you owned the stocks or homes before the price increase, you may have benefited.

But if your salary does not increase at the same rate as inflation, your purchasing power will decline. Your cost of living rises over time due to inflation, which can also have a negative impact on the economy if it is severe enough. High inflation has far-reaching repercussions on a country’s economy.

### How to overcome inflation?

The government attempts to control inflation via monetary and fiscal policies. You should, however, have a plan of your own to guard against it.

The main reason people invest is so they can continue to live well in the future despite an increase in the cost of living. You must thus make investment decisions that will allow you to generate returns that outpace inflation. These investments do, however, involve a greater level of risk than traditional savings accounts.

High-growth potential investments like stocks and mutual funds stand a good opportunity to generate better returns. These investments have frequently produced returns that have outpaced inflation.

You could also take into account other investment options to diversify your wealth. Money should also be invested rather than kept in savings accounts.

Investors may consider buying stocks depending on how much risk they can tolerate. Investing in mutual funds has the potential to yield significant rewards in the long run.

### How to secure yourself and your family’s future

If you want to save money for your post-retirement lifestyle, you need to be more strategic and careful. You must consider the possibility of living past your anticipated retirement age as well as fluctuations in interest rates in addition to inflation.

Your objectives should be reviewed and reevaluated. Working with real numbers is required. If you have questions regarding where to invest or how to do so, you may consult with financial specialists at EduFund.

Parents may begin saving for their child’s college education early on to avoid having their child’s promising future wrecked by education inflation.

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