How much should I invest to accumulate ₹2crore in 21 years?
PremiumIf you continue to invest ₹4,500 per month from here on you would be able to accumulate approximately ₹63 lakh in 21 years
I am a practising advocate who is investing ₹4,000 per month as SIP in the following funds since April 2018.
1. Kotak Flexicap Fund- direct growth, ₹1,000 per month.
2. Mirae Asset Emerging Bluechip Fund-direct growth, ₹1500 per month .
3. SBI Flexicap Fund- direct growth, ₹1,500 per month till April 2021 and then step up to ₹2,000 per month from May 2021 onwards.
I am investing for my four-year-old daughter’s marriage for which I am looking to save ₹2 crore by 2043. I have a moderately high risk appetite. Kindly review my portfolio.
— Lavika
The funds you are investing in are good and you may continue to invest in them in future as well. Your goal to accumulate ₹2 crore in 21 years would require more monthly investment than what you are investing today. If we assume a 10% per annum return you would need to invest ₹23,500 every month and at 12% per annum return you will have to invest ₹18,000 every month. These SIP amounts also include an approximately value of your current portfolio which you are investing in since April 2018. If you continue to invest ₹4,500 per month from here on you would be able to accumulate approximately ₹63 lakh in 21 years. You have mentioned stepping up your SIP from May 2021 onwards and that is a good way to reach closer to your goal. Considering a 12% per annum return on investment you need to increase your SIPs annually by 17% to reach the goal of ₹2 crore,
When you increase the SIP amount, try to add another fund to your portfolio. Ideally, keep 6-8 funds in your overall portfolio and do not try to over diversify by regularly adding new funds. Since your risk taking ability is high as mentioned in your query, you may like to add a mid-cap fund in future. Having said that, try to restrict the SIP allocation to 15% in the mid cap fund.
Harshad Chetanwala is founder of MyWealthGrowth.com.
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