Where to invest to accumulate Rs2 crore for child’s education by 2033?
Premium- To achieve a corpus of Rs2 crore in 11 years, you would need to save and invest about Rs73,000 every month in an aggressive portfolio
I am 36 years old and have a 6-year-old son. I have made some investments in real estate for retirement and have invested around Rs. 6 lakhs in a mix of mutual fund schemes and stocks over the years. I have around Rs. 3 lakh as cash readily available to invest now. I will also have around Rs. 50,000 every month for the next 18 years to invest. Please suggest some mutual funds that I can invest in to accumulate around Rs. 2 crore by 2033 for my son’s education, and for any remaining amount to be invested for my retirement by 2040.
Gopinath
To achieve a corpus of ₹2 crore in 11 years, you would need to save and invest about ₹73,000 every month in an aggressive portfolio. This assumes an annualized return of 12%. In such a situation, if you are starting with ₹50,000 a month, you would need to steadily increase your SIP (systematic investment plan) amount every year by, say, 10% so that you can meet the need for your son’s education as well as your retirement. You can use your current investments, your real estate, and any further increase in your SIP amount (beyond your son’s education need) towards your retirement. You can use a single portfolio for both these needs and withdraw from it based on your need at different times. An equity-strong portfolio with funds such as UTI Nifty Index Fund (large-cap), Parag Parikh Flexi Cap Fund and SBI Small Cap Fund should take 80% of your portfolio. The remaining funds can be deployed in a bond fund such as HDFC Corporate Bond Fund. You can also add some international flavour to your portfolio by investing in the Motilal Oswal S&P 500 Index Fund in the equity segment of your investments.
Srikanth Meenakshi is co-founder, PrimeInvestor. Send in your queries at mintmoney@livemint.com and get them answered by industry experts.
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