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Value of Rupees 1 Crore after 20-30 years

There are various SIP calculators or monthly savings formulas that can help you figure out how much you need to invest on a monthly basis if you want to save Rs 1 crore. For example, if you invest Rs 10,000 per month for 20 years at a 12% annual growth rate, you can save Rs 1 crore.

However, there is a crucial aspect that you may be overlooking or overlooking. Yes, inflation's importance should not be overlooked, especially over a longer period of time. Inflation erodes the rupee's purchasing power, and the value of each rupee diminishes over time. Simply put, if you had Rs 1 crore 20 years ago, you could have bought a lot more than you can now.

As a result, even if you save for 15, 20, or 30 years and acquire Rs 1 crore or more, the actual value of it at that time will be significantly lower.

Assuming a 5% annual inflation rate, Rs 1 crore would be worth around Rs 48 lakh after 15 years! As the temporal horizon lengthens, the value decreases even more. Assuming a 5% inflation rate, the value of Rs 1 crore after 20,25, and 30 years will be around Rs 37.68 lakh, Rs 29.53 lakh, and Rs 23.13 lakh, respectively.
Remember that, while the economy's overall inflation rate may be approximately 6%, education and medical inflation is believed to be substantially higher. As a result, inflation plays a significant role in the planning of your assets, particularly those that are long-term in nature, such as children's education and retirement.
The solution is to set aside an inflation-adjusted amount of money. To do so, you must first inflate the goal's cost before calculating the need. After that, establish a SIP to save for the goal's inflated cost.
Let's imagine you wish to send your child for further school after 20 years, which costs Rs 15 lakh today. Assuming a 7% annual inflation rate, the cost of the course might rise to Rs 40 lakh. So, begin saving Rs 8000 each month to amass Rs 40 lakh (rather than Rs 15 lakh) and comfortably achieve your target.

Work out the amounts for each of your long-term goals in the same way, and begin saving the required amount. It's preferable to save the correct amount than to fall short of a few lakhs despite diligently saving for the objectives. In fact, according to government data revealed recently, retail inflation in India soared to 6.30 percent in May 2021, exceeding the RBI's target.
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