Home > Money > Question
Need Expert Advice?Our Gurus Can Help

31-Year-Old Earning 40K: How Much to SIP for a 2 Crore Goal in 15 Years?

Ramalingam

Ramalingam Kalirajan  |8940 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 16, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Oct 16, 2024Hindi
Listen
Money

I'm 31 years, my salary is 40k, I want make 2cr with in 15 years, how much amount shall I put as SIP?

Ans: Let's break down how a 31-year-old with a monthly salary of Rs 40,000 can accumulate Rs 2 crore in 15 years using SIPs (Systematic Investment Plans). We’ll focus on achieving your goal in a simple, clear way, with practical advice.

Understanding Your Financial Goal
Your goal is to accumulate Rs 2 crore in 15 years. This is ambitious but achievable. The key is to regularly invest in the right instruments. SIPs are an excellent tool to build wealth over time.

At your current age of 31, you have the advantage of a long investment horizon. This allows you to benefit from compounding, where your returns generate further returns. Consistent, disciplined investing is essential to reach this target.

How Much Should You Invest Monthly?
Let’s get to the heart of the matter: How much should you invest?

To reach Rs 2 crore in 15 years, you need to invest in equity mutual funds that can generate good long-term returns. Equity mutual funds have historically offered returns of 10-12% over long periods.

Based on an expected return of 12%, you might need to invest approximately Rs 30,000 per month in SIPs. This amount might seem significant compared to your Rs 40,000 salary, but let’s break it down.

Start Small: If Rs 30,000 per month seems too high initially, start with a lower amount, say Rs 10,000 or Rs 15,000. Increase the SIP amount gradually as your income grows. This method, called “SIP Top-up,” helps you adjust your savings over time.

Increase Yearly Contributions: Even a 10% increase in SIPs every year can significantly improve your chances of reaching your goal. So, if you start with Rs 10,000 per month, aim to increase it to Rs 11,000 next year, and so on.

Why Actively Managed Mutual Funds?
Investing in actively managed mutual funds through a Certified Financial Planner is crucial. These funds have professional fund managers who constantly monitor and adjust the portfolio. This gives them an edge over index funds, especially in volatile markets.

Actively managed funds can outperform index funds over time, providing higher returns. When investing directly in funds without professional help, there’s a risk of not choosing the right ones or missing out on potential market adjustments. That’s why investing through a Certified Financial Planner ensures that your portfolio is regularly monitored and optimized.

Avoid Direct Mutual Funds
Some people might recommend direct mutual funds to save on commissions. However, the savings from direct funds may not justify the risk of not having professional guidance. When investing through regular funds with the help of a Certified Financial Planner, you get expert advice on rebalancing and portfolio management. This ensures your investments align with market trends and your financial goals.

Diversification and Risk Management
To reach Rs 2 crore in 15 years, it’s important to focus primarily on equity mutual funds for growth. However, a well-diversified portfolio will also contain some debt funds for stability, especially as you approach your goal.

This reduces risk and ensures that not all your investments are exposed to market fluctuations. While equity funds provide growth, debt funds provide safety and balance to your portfolio.

Tax Implications to Consider
It’s also important to consider the tax implications of your investments.

Equity Mutual Funds: Long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20%.

Debt Mutual Funds: LTCG and STCG are taxed as per your income tax slab. Understanding these tax implications will help you plan your withdrawals more effectively.

Best Practices for Reaching Rs 2 Crore
Discipline: The key to success with SIPs is discipline. Ensure that you invest regularly and do not skip your SIPs. Over time, even small contributions can grow into a large corpus.

Stay the Course: Markets will go up and down, but it’s important not to panic and withdraw your investments prematurely. Stick to your plan for the full 15 years to benefit from market growth.

Top-up Your SIPs: Every year, try to increase your SIP amount as your salary increases. This way, your investments keep pace with inflation, and you build a bigger corpus faster.

Finally
Your goal of Rs 2 crore in 15 years is achievable if you invest Rs 30,000 monthly in actively managed mutual funds. If this seems too high initially, start with a smaller amount and increase it gradually. Avoid direct funds and index funds, as professional guidance through a Certified Financial Planner will provide better long-term growth.

By following these principles, you can stay on track and build wealth steadily over time.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |8940 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 2024

Ramalingam

Ramalingam Kalirajan  |8940 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Listen
Money
to make 1.5cr in next 15 years , how much amount investment required in SIP?
Ans: You aim to accumulate Rs 1.5 crore in the next 15 years. This is a long-term goal. SIPs are ideal for such goals.

Let's analyse how much you need to invest monthly to reach this target.

Factors to Consider

Investment Horizon: 15 years is a good period for equity investments.

Expected Returns: Typically, mutual funds can yield 12-15% annually. We'll use 12% for a conservative estimate.

Monthly Investment Required

Calculation Basis: To accumulate Rs 1.5 crore in 15 years, we need to calculate the SIP amount.

Using 12% Returns: At a 12% annual return, we can estimate the required monthly SIP.

Approximate SIP Calculation

Estimate: To reach Rs 1.5 crore, you would need to invest around Rs 25,000 per month. This is a rough estimate based on historical data.
Benefits of SIPs

Rupee Cost Averaging: SIPs invest a fixed amount regularly. This averages out market volatility.

Disciplined Investment: SIPs ensure regular investment. This builds a habit of saving and investing.

Power of Compounding: SIPs benefit from compounding. Returns generate more returns over time.

Active Management Over Index Funds

Flexibility: Actively managed funds adapt to market changes. They aim for higher returns.

Research: Fund managers conduct extensive research. This can identify high-growth opportunities.

Higher Potential: Actively managed funds often outperform index funds. This is due to active decision-making.

Avoiding Direct Funds

Expert Guidance: Regular funds offer guidance from MFDs with CFP credentials. This ensures professional advice.

Convenience: MFDs help in fund selection and portfolio management. This saves time and effort.

Monitoring: Regular funds provide ongoing support. This ensures your investments stay on track.

Review and Adjust

Regular Monitoring: Review your investments every six months. Adjust based on performance and market conditions.

Stay Updated: Keep informed about market trends and economic changes. This helps in making informed decisions.

Insurance Policies

LIC and ULIP Policies: If you hold any, consider their returns. ULIPs and LIC policies may not yield high returns.

Reinvestment: Surrender low-return policies and reinvest in mutual funds. This can provide better growth.

Final Insights

To accumulate Rs 1.5 crore in 15 years, invest around Rs 25,000 monthly in SIPs. Choose actively managed funds for higher returns. Regular monitoring and adjustments are crucial. Seek professional guidance for optimal results.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8940 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 02, 2024

Listen
Money
Dear sir Now I am 37 years old working in banking sector my monthly salary is 45 k and my wife's take home is 20 k I have one personal loan emi around 24k already I am having SIP with 2.5 k every month now I need to plan for more how much I need to invest in SIP if I want to reach 30 L in next 5 years
Ans: Your Financial Picture
• Your monthly income: Rs. 45,000
• Your wife's monthly income: Rs. 20,000
• Total family income: Rs. 65,000
• Personal loan EMI: Rs. 24,000
• Current SIP: Rs. 2,500 per month

Your Goal

• Target amount: Rs. 30 lakhs
• Time frame: 5 years

Savings Potential

• After EMI, you have Rs. 41,000 left
• You're already investing Rs. 2,500 monthly
• There's room to increase your investments

Investment Strategy

To reach your goal, consider these steps:

• Increase your SIP amount
• Look at growth-oriented investment options
• Regularly review and adjust your plan

SIP Amount Needed

• You'll need to invest more to reach Rs. 30 lakhs
• A rough estimate is Rs. 35,000 to Rs. 40,000 monthly
• This assumes a yearly return of 12% to 15%

Increasing Your Investments

Here are some ways to boost your investment amount:

• Cut unnecessary expenses
• Use any salary hikes to increase SIP
• Invest bonuses or extra income
• Look for side income opportunities

Investment Options

For a 5-year goal, consider these options:

• Equity mutual funds for growth
• Balanced funds for moderate risk
• Debt funds for stability

Benefits of Regular Funds

• Professional management of your money
• Expert advice from certified financial planners
• Regular portfolio review and rebalancing
• Help in staying disciplined with investments

Risks to Consider

• Market volatility can affect short-term returns
• 5 years is a relatively short time for equity
• Your returns may vary from expectations

Regular Reviews

• Check your investments every 3-6 months
• Adjust your plan if needed
• Stay focused on your long-term goal

Protection First

• Ensure you have adequate life insurance
• Get a good health insurance policy
• Build an emergency fund of 3-6 months' expenses

Tax Planning

• Use tax-saving investment options wisely
• Don't invest only for tax benefits
• Look at overall returns and goal alignment

Finally

Your goal is ambitious but not impossible. Start increasing your investments right away. Stay disciplined and patient. Regular review and adjustments will help you reach your target.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8940 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 13, 2024

Listen
Money
Dear sir Now I am 37 years old working in banking sector my monthly salary is 45 k and my wife's take home is 20 k I have one personal loan emi around 24k already I am having SIP with 2.5 k every month now I need to plan for more how much I need to invest in SIP if I want to reach 30 L in next 5 years
Ans: First, let’s appreciate your commitment to securing your financial future. Your combined monthly income is Rs. 65,000, and you already invest Rs. 2,500 monthly in a SIP. With a personal loan EMI of Rs. 24,000, your current financial situation requires careful planning.

Setting Your Financial Goal

Your goal is to accumulate Rs. 30 lakhs in the next five years. This goal is both realistic and achievable with disciplined investing. But before we determine the required SIP amount, we need to consider some factors like your current savings, expenses, and loan commitments.

Evaluating Your Current Savings and Expenses

After accounting for your EMI, you have Rs. 41,000 left. From this, we must also subtract your living expenses, existing SIP, and other financial commitments. Your disposable income after expenses will determine how much more you can invest.

Let’s assume that your monthly expenses (excluding the EMI and current SIP) are around Rs. 20,000. This leaves you with Rs. 21,000 that you can potentially allocate towards additional SIPs and other financial goals.

Calculating the SIP Required to Achieve Your Goal

Given your target of Rs. 30 lakhs in five years, you will need to invest a substantial amount monthly. To provide a rough estimate:

Current SIP: Your current Rs. 2,500 SIP is a good start, but it might not be enough to reach your goal of Rs. 30 lakhs.

Additional SIP Required: To achieve Rs. 30 lakhs in five years, you will need to invest more. Given an assumed average return rate of 12% per annum, you might need to invest around Rs. 35,000 monthly. However, the exact amount can vary based on market performance.

You can adjust the SIP amount based on your comfort and financial situation.

Balancing Loan Repayment and Investments

Balancing between loan repayment and investments is crucial. Your loan EMI is already a significant part of your income. If possible, consider prepaying part of your loan to reduce the EMI burden. This could free up more funds for SIPs.

If prepaying is not an option, focus on maintaining a healthy balance between loan repayment and investments.

Assessing the Need for Insurance

Since you have a personal loan, it’s wise to ensure you have adequate life insurance. A term insurance policy can secure your family’s financial future if something unfortunate happens. Additionally, health insurance is essential to avoid unexpected medical expenses.

Ensure your insurance coverage is adequate to protect your financial goals.

Importance of Regular Monitoring and Adjustment

Regularly monitoring your investments is key. Market conditions can change, and so can your financial situation. Reviewing your SIPs and overall financial plan annually will help you stay on track to achieve your goal.

Regular adjustments may be necessary to ensure your investments are aligned with your financial goals.

Why Actively Managed Funds Are Preferable

While index funds are popular, they may not be ideal for aggressive goals. Actively managed funds, where expert fund managers make strategic decisions, can potentially offer better returns. This can be beneficial, especially when trying to achieve a specific financial target.

Actively managed funds provide flexibility and the potential for higher returns.

Final Insights

Achieving Rs. 30 lakhs in five years is possible with disciplined investing. Consider increasing your monthly SIP, balancing it with your loan repayment, and ensuring you have adequate insurance coverage. Regular monitoring and adjustments are also crucial. With a careful approach, your financial goal can be achieved.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8940 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 16, 2024

Asked by Anonymous - Oct 16, 2024Hindi
Listen
Money
Sir my age 40 years how much amount invest in sip after 20 years got 5 cr.
Ans: At the age of 40, you are in a great position to start planning for your financial future. Achieving Rs 5 crore in 20 years is definitely possible with disciplined investments. To achieve this goal, investing through SIPs (Systematic Investment Plans) in equity mutual funds can be your best option. Let’s dive into how much you need to invest and how to plan it right.

How Much Should You Invest?
To accumulate Rs 5 crore in 20 years, you need to invest regularly in equity mutual funds. Over long periods, these funds tend to offer higher returns, typically around 10-12% annually.

If we assume a return of 12% per year, you might need to invest around Rs 50,000 per month in SIPs to reach your goal of Rs 5 crore in 20 years.

Now, Rs 50,000 may seem high, but remember, you can start smaller and gradually increase your SIPs. Let’s look at how this can be done.

Start Small, Increase Over Time
If you cannot invest Rs 50,000 right away, don’t worry. You can start with a smaller amount, like Rs 20,000 or Rs 30,000 per month. Then, increase your SIPs every year by a certain percentage, like 10%. This approach is called SIP Top-up, and it allows you to invest more as your income grows. By doing this, you’ll eventually reach the required monthly investment over time.

Why Choose Actively Managed Mutual Funds?
You might wonder, “Why should I choose actively managed funds over index funds or direct mutual funds?”

Actively managed mutual funds are managed by professional fund managers who constantly monitor and adjust the fund’s portfolio. This allows them to perform better in volatile markets. Index funds, while cheaper, do not have this flexibility, which could limit your returns in the long run.

Investing through a Certified Financial Planner who can guide you with regular funds is also a safer option than going for direct mutual funds. The expertise of a CFP ensures your portfolio is well-diversified, managed effectively, and aligned with your financial goals.

Avoiding Direct Funds
Direct mutual funds may seem appealing due to lower costs, but they lack professional guidance. Without a CFP or professional manager, you might miss crucial market signals or fail to rebalance your portfolio at the right time. Investing in regular funds with the help of a Certified Financial Planner ensures that your investments are optimally managed.

Diversify Your Investments
While equity mutual funds should form the majority of your portfolio for growth, it’s essential to diversify your investments across different categories. This could include:

Equity Mutual Funds for long-term growth.

Debt Funds for stability and to reduce risk as you approach your target.

This diversification will protect your investments from market volatility and give you a more balanced portfolio.

Tax Implications of Mutual Funds
Understanding the tax rules is crucial to managing your investments efficiently.

Equity Mutual Funds: Long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20%.

Debt Mutual Funds: Both LTCG and STCG are taxed as per your income tax slab.

Knowing these tax rates can help you plan your withdrawals and avoid unnecessary tax burdens.

Key Points to Stay Focused On
Discipline: Make sure to invest every month without skipping your SIPs. Over time, your money will grow, and even small amounts will compound into a larger corpus.

Don’t Panic: Markets can be volatile. However, do not panic and withdraw during market corrections. Stay invested for the full 20 years to reap the benefits of compounding.

Review Regularly: Meet with your Certified Financial Planner at least once a year to review your portfolio. This ensures you stay on track and make adjustments as needed.

Final Insights
At the age of 40, investing Rs 50,000 per month in equity mutual funds through SIPs can help you accumulate Rs 5 crore in 20 years. If this amount seems high initially, start smaller and increase your SIPs each year. Avoid index funds and direct mutual funds to ensure you get the best professional advice and fund management.

Focus on disciplined investing, avoid panic during market fluctuations, and diversify your portfolio for stability.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Ravi

Ravi Mittal  |602 Answers  |Ask -

Dating, Relationships Expert - Answered on Jun 19, 2025

Asked by Anonymous - Jun 19, 2025
Relationship
Why do men ghost after sex? I met this amazing guy on Hinge. He was 27, well-mannered, and worked in a data firm in Mumbai. We spoke daily for three months and had amazing chemistry. From music to food, we discussed everything under the sun. We went on a couple of dates to get to know each other. When we got comfortable, we got intimate and eventually had consensual s** at his friend's house party. One week after we got intimate, he just vanished. No replies, no calls. It was my first time, so I kept wondering if I had done something wrong to upset him. My friend says it could be post-intimacy guilt. But I feel embarrassed, ashamed. I can't shake off the shame. Did I move too fast? Is this how dating works now? How can I go back to feeling normal again?
Ans: Dear Anonymous,
I am really sorry you are going through this. What happened is just as confusing as it is hurtful. Let’s get one thing straight, you did nothing wrong. You are not at fault here. Nothing you could’ve done or said should or could cause this reaction.
Coming to your first question, it is very difficult to answer it without generalizing all men. But some of the most reasons for this could be:
He got what he wanted. It sounds crass but in most cases, this is the truth. He had no intentions of being more than just that.
He might be avoiding responsibility. He didn’t want more, and the mature thing would have been to sit down and have that discussion with you. But, maturity isn’t easy and he chose the easy route, that is to ghost. His decision to disappear is a reflection of his nature, not yours.
Coming to what your friend said, it could be that too, but the chances are slim. Some men do feel overwhelmed but disappearing for over a week is a stretch. Again, it’s his unreadiness to feel so many emotions, not yours.
Now, I want to gently nudge you towards one thing: you said you feel ashamed. Shame creeps in when you hold yourself accountable for someone else’s actions. And also due to societal prejudice. Keep both aside, and you have nothing to be ashamed of. Did you move too fast? To be honest, there is no fast or slow in these things. There’s no set timeline. You did what you felt was right in the moment. And you were ready to step up, but he went MIA. The entire unfortunate turnout is not because of your pace but his lack of respect. Even if he comes up with a good enough reason for this disappearing act, I still want you to remember that not even for a second, you had anything to create this situation.


I hope this helps.

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x