TLDR: The magical figure for financial planning

Do me a favour and search google for the sheer number of articles on getting to one crore (10 million Rupees). You can do the same on getting to a million dollars in most financial blogs and other personal investment website based out of US/Singapore etc.

This magical number seems to be a target optimised for SEO. (My counter argument might be lost here, but bear with me). One crore or one million, 20 years ago used to be a considerable sum. There is no argument from me, But it is no longer the same.

That is some serious erosion of value due to inflation. How bad is the fall ?

So 1 crore in 1999 is worth 28.7 lakhs in 2019 based on the average inflation figure of 6.05%

The fall of the Indian rupee compared to global currencies hasn’t helped our cause either. Here is the INR to USD chart from the 1960 to 2018.

So 1 crore is no longer the big goal to aim for as it certainly doesn’t hold the same value it used to 20 years ago. So why the fascination with 1 crore?

Given that the vast majority of the population still earns much less than 50K a month, 1 Crore still sounds like an impossible dream (200X monthly income at 50K) and a major milestone to achieve. It is also a nice round number that everyone can aim for.

Looking for some benchmarks on the fire - Look at the types of FIRE post for details.

Conclusion

1 Crore is a fascination because it is big (relatively) round number to achieve. It should be your first milestone on the journey to financial independence, but there is a long way to to go before you achieve FIRE.

Assuming the same rate of inflation of 6.05%, 1 Crore is worth
73.19 lakhs in 5 years
53.57 lakhs in 10 years
39.21 Lakhs in 15 years

Consider this erosion of value when you are planning your retirement figure. Do you have any thoughts or comments on this crorepati fascination or where your retirement goals will be in 5, 10 or 15 years. Leave your comments below.

Happy Investing.