I am 46 years old. I am investing Rs 2 lakh per year in MFs from this year, and earlier savings are being utilised for my mother’s cancer treatment. My salary is Rs 1.43 lakh and my home loan outstanding is Rs 45 lakh. However, I also have equity investments worth nearly Rs 2 lakh, mostly invested in BeES, Nifty BeES, bank BeES, Nasdaq N100, junior BeES, gold BeES and IT BeES. I can save Rs 30,000 a month. Kindly tell me how many years it will take me to become a crorepati.
Reply by Rajiv Bajaj, Chairman & MD, BajajCapital
When evaluating the potential of your investments, it’s important to consider the financial implications of dedicating Rs 30,000 per month over a span of 13 years. This long-term commitment has the potential to culminate in a substantial corpus of Rs 1 crore, assuming a steady compound annual growth rate (CAGR) of 12%. This projection underscores the power of consistent and disciplined investing over an extended period.
To make the most of this investment journey, we recommend focusing on an equity-oriented portfolio strategy that maintains a well-rounded exposure across various market capitalisation segments. The rationale behind this approach is to strike a balance between growth potential and risk management. By diversifying your investments, you can enhance the resilience of your portfolio, thereby reducing the impact of market volatility on your wealth.
Given your monthly investable amount of Rs. 30,000, we propose a thoughtfully crafted allocation strategy that optimises your chances of achieving your financial goals. We suggest distributing your monthly investments evenly among the following mutual funds:
Bandhan Core Equity Fund Fund
Nippon India Multi Cap Fund
Kotak Multi Cap Fund
Nippon India Growth Fund
HDFC Small Cap Fund
This allocation strategy allows your investments to span across multiple dimensions, including market capitalisation, geographical exposure, and asset management companies (AMCs). By doing so, you not only diversify the risk but also harness the potential of various investment opportunities. This diversified approach is designed to make your portfolio more robust and adaptable to changes in market conditions, ultimately increasing your chances of reaching your financial objectives.
Furthermore, we recommend conducting regular portfolio reviews, preferably at least once a year. This practice enables you to assess the performance of your investments in light of changing market dynamics and your evolving financial goals. It also allows you to make necessary adjustments to your portfolio to keep it aligned with your long-term objectives.
In conclusion, with a well-structured investment plan, diligent monitoring, and a diversified portfolio, you are poised to make the most of your financial journey towards accumulating a significant corpus of Rs. 1 crore over the next 13 years.
(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)