Mutual Fund Helpline: Can I become a crorepati in 10 years?

Disclaimer: This story is for informational purposes only and should not be taken as investment advice.

In this day and age of unlimited investment options, people often wonder the right particulars of financial planning. A call to the Mutual Fund Helpline on Zeebiz requested to make him a ‘crorepati’ in a span of 10 years.

He had a total of eight mutual funds – Reliance Tax Saver, HDFC Mid-Cap Opportunities, ICICI Prudential Liquid Plan, Kotak Select Focus, L&T India Value Fund, DSP Micro Cap Fund, Axis Long Term Equity and Mirae Asset Emerging Bluechip fund.

“It is commendable that you have opened a SIP at the age of 26.  It is a good thing that you have invested in so many funds because of prompting from your broker or any other advice and made a portfolio for yourself,” said Punita Kumar Sinha, Pacific Paradigm Advisors.

“If we do a calculation, Rs 2,800 per month in SIP for another 10 years and consider a 12% rate of return, you will easily be able to earn Rs 89-90 lakh in 10 years,” she added.

However, Sinha suggested that instead of having three Mid-Cap funds (L&T Value Fund, HDFC Mid-Cap Opportunities and Mirae Asset Emerging Bluechip fund) to dim it down to just one.

“If you want to earn Rs 1 crore in a span of 10 years, you will have to start SIPs of Rs 31,500,” Sinha concluded.

New investors have been advised to slowly increase their investments in SIPs as their income increases. Do keep in mind funds and the allocation of money to each is decided after careful consideration of individual investors.

In an earlier report, we spoke about how small savings every month help you become a ‘crorepati’.

Investing just Rs 6,000 in SIPs per month for 17 years with an expected rate of return of 20% per annum would mean your investment amount is over Rs 12,00,000 for the entire time period.

And at the time of maturity, earnings would be much higher.

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