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Shammsunder Nikam - Need Advice on Accumulating 2 Crore Through Mutual Funds in 5 Years

Vivek

Vivek Lala  | Answer  |Ask -

Tax, MF Expert - Answered on Aug 11, 2024

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Shammsunder Question by Shammsunder on Aug 10, 2024Hindi
Money

I'm looking to accumulate the funds of 2 crore through mutual funds in next 5 yrs. Kindly guide n suggest through investment plans.. Shammsunder nikam

Ans: Hello, there are 2 ways to invest money in mutual funds , one is SIP's and other is Lumpsum
If you have an active income, then your sip amount should be 2.38L to get to 2crs in 5yrs @13% xirr
If you want to invest a lumpsum amount then your investment has to be 1.08 crs to get to 2crs in 5yrs at 13% cagr

Remember that past performance is not a guarantee for future returns, and it's always important to review your investments periodically to ensure they remain aligned with your financial objectives.

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Ramalingam

Ramalingam Kalirajan  |9383 Answers  |Ask -

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

Asked by Anonymous - Feb 28, 2024Hindi
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Hi Dev, I am 29 years old and have a monthly income of 20K. I am already investing in MF and want to achieve a corpus fund of 5 crores by the age of 50 for my retirement. Please advise on how to invest
Ans: I understand your aspirations for a secure retirement and commend you for your proactive approach to financial planning. It's wonderful to see your commitment to securing a comfortable future for yourself.

With a monthly income of 20K, you're off to a good start. To achieve a corpus fund of 5 crores by the age of 50, it's essential to strategize your investments wisely.

Diversification is key to mitigating risks and maximizing returns. While you're already investing in mutual funds, it's prudent to explore other avenues like equities, debt instruments, and perhaps even alternative investments.

Considering your age and risk appetite, a balanced portfolio with a mix of equity and debt instruments would be suitable. Equity investments offer the potential for higher returns over the long term, while debt instruments provide stability and steady income.

As a Certified Financial Planner, I recommend actively managed funds over index funds. Actively managed funds have the advantage of professional fund managers who actively select investments, aiming to outperform the market.

Avoiding direct funds and opting for regular funds through a Certified Financial Planner can provide you with personalized guidance and ongoing support, ensuring your investments align with your financial goals.

Remember to review and adjust your portfolio periodically to accommodate changes in your life circumstances and market conditions. And most importantly, stay disciplined and patient, as wealth accumulation is a gradual process.

Keep up the excellent work, and you'll be well on your way to achieving your retirement goals.

Best Regards,

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

..Read more

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Ramalingam Kalirajan  |9383 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

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Hi, I have 1 lack rupees in hand and want to invest in mutual fund. Should i invest all amount in one mutual fund or invest in different type of funds? Can you suggest some type of funds that i could get profit in 5 years
Ans: Crafting a Strategic Mutual Fund Investment Plan with 1 Lakh Rupees


Congratulations on your decision to invest in mutual funds! Let's devise a prudent investment strategy that maximizes your potential returns while managing risk effectively.

Diversification Strategy
Investment Allocation:

Instead of investing the entire amount in a single mutual fund, consider diversifying across different types of funds to mitigate risk and optimize returns.
Allocate your investment strategically across a mix of equity and debt funds based on your risk appetite, investment horizon, and financial goals.
Types of Funds to Consider:

Equity Funds: These funds invest predominantly in stocks and are suitable for long-term wealth creation. Consider allocating a portion of your investment, around 60-70%, to equity funds.
Debt Funds: Debt funds invest in fixed-income securities such as government bonds, corporate bonds, and treasury bills. Allocate the remaining portion of your investment, approximately 30-40%, to debt funds for stability and income generation.
Profitable Funds for a 5-Year Horizon
Equity Funds:

Large-Cap Funds: These funds invest in large-cap stocks with stable returns and lower volatility, making them suitable for conservative investors. Look for funds with a consistent track record of performance and low expense ratios.
Multi-Cap Funds: Multi-cap funds offer diversification across large-cap, mid-cap, and small-cap stocks, providing potential for higher returns while managing risk effectively.
Sectoral Funds: Sectoral funds invest in specific sectors such as technology, healthcare, or banking. Consider allocating a small portion of your equity investment to sectoral funds for potential outperformance in specific sectors.
Debt Funds:

Short-Term Debt Funds: These funds invest in fixed-income securities with short to medium-term maturities, offering relatively higher returns than traditional savings instruments. Look for funds with a focus on high-quality bonds and a conservative investment approach.
Liquid Funds: Liquid funds invest in short-term money market instruments with a maturity of up to 91 days, providing liquidity and stability to your portfolio. Consider allocating a portion of your investment to liquid funds for capital preservation and easy access to funds.
Conclusion
By diversifying your investment across different types of mutual funds, you can optimize returns while managing risk effectively. Remember to review your investment portfolio periodically and make adjustments as needed to align with your financial goals and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Ramalingam Kalirajan  |9383 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

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I need to get 5 crore in 15 years for my children higher study.. Marriage and my early retire... How much should I invest in mutual fund to achieve the target.... My current income is 2 lakh per month and monthly expenses of 1.7 lakh per month
Ans: Firstly, let me commend you on your foresight in planning for your children's higher education, marriage, and your early retirement. It's crucial to start early and set clear financial goals to ensure a secure future for yourself and your loved ones.

Understanding Your Financial Goal

Your goal of accumulating ?5 crore in 15 years for various life events requires careful financial planning and disciplined savings. It's essential to assess your current financial situation and determine the required investment amount to achieve this target.

Analyzing Income and Expenses

Your monthly income of ?2 lakh and expenses of ?1.7 lakh indicate a healthy surplus that can be utilized for investments. It's commendable that you have a comfortable margin between your income and expenses, which provides room for savings and investments.

Estimating Required Investment Amount

To estimate the required investment amount to accumulate ?5 crore in 15 years, we need to consider factors such as:

Time Horizon: With a 15-year investment horizon, you have a reasonable timeframe to achieve your goal, allowing you to benefit from the power of compounding.

Rate of Return: The expected rate of return on your investments plays a crucial role in determining the required investment amount. While past performance is not indicative of future results, historical data can provide insights into potential returns.

Systematic Investment Plan (SIP): Investing through SIPs allows you to regularly invest fixed amounts over time, leveraging the benefits of rupee cost averaging and compounding.

Calculating Required Monthly Investment

Based on the estimated rate of return and investment horizon, we can calculate the required monthly investment amount to achieve your target corpus of ?5 crore in 15 years. By factoring in the power of compounding, we can determine the optimal investment strategy to reach your financial goal.

Assuming a conservative rate of return on your investments, we can use financial planning tools to calculate the monthly SIP amount needed to accumulate ?5 crore in 15 years. By inputting variables such as the expected rate of return, investment duration, and target corpus, we can arrive at the required monthly investment amount.

Benefits of Actively Managed Funds

Actively managed mutual funds offer several advantages over passive index funds or ETFs:

Professional Management: Skilled fund managers actively monitor market trends and adjust portfolio allocations to capitalize on growth opportunities, potentially leading to higher returns.

Customized Strategies: Actively managed funds employ dynamic investment strategies tailored to market conditions and investment objectives, providing investors with a personalized approach to wealth accumulation.

Disadvantages of Direct Funds

Direct funds require investors to research and select funds independently, which can be time-consuming and challenging for those with limited financial knowledge. Additionally, the absence of professional advice may result in suboptimal investment decisions and higher risks.

Benefits of Regular Funds Investing through MFD with CFP Credential

Investing in regular funds through a Certified Financial Planner (CFP) credentialled Mutual Fund Distributor (MFD) offers several benefits:

Professional Guidance: A CFP-certified MFD provides personalized investment advice tailored to your financial goals and risk profile, helping you make informed decisions.

Access to a Wide Range of Funds: MFDs offer access to a diverse range of mutual funds, including both actively managed and index funds, enabling you to build a well-rounded investment portfolio.

Final Words

Achieving a target corpus of ?5 crore in 15 years requires a disciplined savings approach and strategic investment planning. By investing regularly in mutual funds through SIPs and leveraging the benefits of compounding, you can work towards realizing your financial aspirations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Ramalingam Kalirajan  |9383 Answers  |Ask -

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

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Hii sir myself gangadhar from Bangalore My company is providing me a 5 lakhs with a rate of interest 5% per annum, i am thinking to put the money in mutual funds, can you please guide me on this sir
Ans: Hi Gangadhar,

It's great that you're considering investing Rs. 5 lakhs from your company loan into mutual funds. I appreciate your forward-thinking approach towards financial growth. Let's delve into a detailed guide on how you can strategically invest in mutual funds for optimal returns.

Understanding the Loan and Its Impact
You mentioned that your company is offering a loan of Rs. 5 lakhs at an interest rate of 5% per annum. This is relatively low, which makes it a cost-effective source of funds for investment.

Evaluating the Cost of the Loan
Before we proceed with the investment strategy, it's crucial to evaluate the cost of the loan:

Interest Cost: The loan will cost you Rs. 25,000 per year (5% of Rs. 5 lakhs). This is a manageable amount, especially when you consider the potential returns from mutual funds.
Risk Assessment
It's important to understand the risks associated with borrowing money to invest. While the interest rate is low, investing in mutual funds does carry market risks. Make sure you're comfortable with this level of risk and have a solid plan in place.

Why Mutual Funds?
Mutual funds are an excellent investment option for several reasons. They provide diversification, professional management, and the potential for higher returns compared to traditional savings accounts or fixed deposits.

Diversification
Investing in mutual funds allows you to diversify your investments across various asset classes, such as equities, debt, and hybrid funds. This helps reduce risk and improve potential returns.

Professional Management
Mutual funds are managed by experienced fund managers who make informed investment decisions on your behalf. This ensures that your money is invested wisely and efficiently.

Compounding
The power of compounding is one of the biggest advantages of mutual funds. By reinvesting your returns, you can significantly grow your wealth over time.

Types of Mutual Funds and Their Benefits
Let's explore the different types of mutual funds and their benefits to help you make an informed decision.

Equity Mutual Funds
Equity mutual funds invest primarily in stocks. They offer the potential for high returns but come with higher risk. Suitable for long-term goals.

Large-Cap Funds: Invest in large, well-established companies. Lower risk, moderate returns.
Mid-Cap Funds: Invest in medium-sized companies. Higher risk, higher potential returns.
Small-Cap Funds: Invest in smaller companies. Highest risk, highest potential returns.
Sector Funds: Focus on specific sectors like technology, healthcare, etc. High risk, high potential returns.
Debt Mutual Funds
Debt mutual funds invest in fixed-income securities like bonds and treasury bills. They offer lower risk and steady returns, suitable for short to medium-term goals.

Liquid Funds: Very low risk, ideal for emergency funds.
Short-Term Funds: Suitable for 1-3 year investment horizon.
Long-Term Funds: Suitable for 3+ year investment horizon.
Hybrid Mutual Funds
Hybrid mutual funds invest in a mix of equity and debt instruments. They offer a balanced approach with moderate risk and returns.

Balanced Funds: Equal allocation to equity and debt.
Aggressive Hybrid Funds: Higher allocation to equity.
Conservative Hybrid Funds: Higher allocation to debt.
Building Your Investment Strategy
Given your goal of investing Rs. 5 lakhs, it's essential to create a diversified portfolio that aligns with your risk tolerance and financial objectives.

Step 1: Assess Your Risk Tolerance
Your risk tolerance depends on factors like age, income stability, financial goals, and investment horizon. Since you have a relatively long investment horizon, you can afford to take on more risk for higher returns.

Step 2: Diversify Your Investments
A well-diversified portfolio can help manage risk and improve potential returns. Consider allocating your investment across different types of mutual funds.

Equity Funds (60-70%): Focus on large-cap and mid-cap funds for growth.
Debt Funds (20-30%): Invest in short-term and long-term debt funds for stability.
Hybrid Funds (10-20%): Include balanced or aggressive hybrid funds for a balanced approach.
Step 3: Opt for Systematic Investment Plan (SIP)
A Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly in mutual funds. This helps in averaging out the cost of investments and reducing the impact of market volatility.

Step 4: Monitor and Rebalance Your Portfolio
Regularly monitor your investment portfolio to ensure it aligns with your financial goals. Rebalance your portfolio periodically by adjusting your asset allocation to maintain the desired risk level.

Actively Managed Funds vs. Index Funds
While considering mutual funds, it's essential to understand the difference between actively managed funds and index funds.

Actively Managed Funds
Actively managed funds are overseen by professional fund managers who actively select and manage the fund's investments to outperform the market. These funds often have higher expense ratios but can provide higher returns if managed well.

Index Funds: Disadvantages
Index funds track a specific market index, such as the Nifty 50 or Sensex. They aim to replicate the performance of the index, not outperform it.

Lack of Flexibility: Index funds strictly follow the index, limiting the fund manager's ability to make strategic decisions.
Market Risk: They are exposed to the same market risk as the index they track.
Lower Returns: Historically, actively managed funds have the potential to outperform index funds, providing better returns.
Benefits of Actively Managed Funds
Potential for Higher Returns: Skilled fund managers can potentially achieve higher returns through active management.
Risk Management: Fund managers can adjust the portfolio to mitigate risks and take advantage of market opportunities.
Professional Expertise: Benefit from the expertise and experience of professional fund managers.
Direct Funds vs. Regular Funds
When investing in mutual funds, you have the option to choose between direct funds and regular funds.

Direct Funds: Disadvantages
Direct funds are purchased directly from the mutual fund company, bypassing intermediaries.

Lack of Guidance: Investors miss out on professional advice and support from Certified Financial Planners (CFPs).
Time-Consuming: Managing and tracking direct investments can be time-consuming and requires financial knowledge.
Risk of Errors: Without professional guidance, investors might make suboptimal investment decisions.
Benefits of Regular Funds
Regular funds are purchased through a Mutual Fund Distributor (MFD) or Certified Financial Planner (CFP).

Professional Guidance: Benefit from expert advice and support from a CFP.
Convenience: CFPs handle the paperwork, tracking, and management of investments.
Optimal Decisions: With professional guidance, investors can make better investment decisions aligned with their financial goals.
Final Insights
Investing Rs. 5 lakhs in mutual funds is a wise decision given the potential for higher returns and diversification benefits. By understanding the different types of mutual funds and their advantages, you can create a well-diversified portfolio tailored to your risk tolerance and financial goals. Opt for actively managed funds over index funds to leverage professional expertise and potential higher returns. Consider regular funds through a Certified Financial Planner to ensure you receive professional guidance and support.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9383 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 23, 2024

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NEED TO ACCUMULATE A FUND OF 1 CR IN 5 YEARS, CAN U PROVIDE ME AN INSIGHT FOR RIGHT INVESTMENT
Ans: A fund of Rs 1 crore in 5 years is an ambitious goal.

Achieving this requires disciplined saving and smart investments.

The strategy should align with your risk tolerance and cash flow.

Regular reviews and adjustments will keep your plan on track.

Analysing Investment Options
Equity Mutual Funds: For Growth Potential

Equity mutual funds offer the highest potential for wealth creation.

Choose actively managed funds with a proven track record.

Diversify across large-cap, mid-cap, and multi-cap funds.

Avoid index funds; they lack active management advantages.

Actively managed funds adapt better to market conditions.

Debt Mutual Funds: For Stability

Debt funds can balance the volatility of equity investments.

Short-duration and dynamic bond funds can suit a 5-year horizon.

Debt funds offer stable returns but are taxed as per your slab.

Allocate a portion to these for safety and liquidity.

Hybrid Funds: Balanced Approach

Hybrid funds combine equity and debt investments.

They provide moderate growth with less volatility.

These are suitable for medium-risk investors.

Systematic Investment Plan (SIP): Key to Discipline

Start SIPs for consistent and disciplined investing.

SIPs spread the investment across market cycles.

This reduces the risk of timing the market incorrectly.

Importance of Regular Fund Investments
Avoid Direct Funds

Direct funds lack advisory support for tax or portfolio management.

Investing through a Certified Financial Planner ensures better decisions.

Regular funds offer expert-driven portfolio rebalancing.

Avoid Sector-Specific Funds

Sectoral funds are risky due to their narrow focus.

Stick to diversified equity or hybrid funds.

This reduces dependence on specific industries.

Risk Management and Contingency Planning
High-growth investments come with volatility. Be prepared for fluctuations.

Build an emergency fund to cover six months' expenses.

Avoid withdrawing from growth investments during the goal period.

Taxation Considerations
Equity funds have LTCG above Rs 1.25 lakh taxed at 12.5%.

STCG for equity funds is taxed at 20%.

Debt funds are taxed as per your income tax slab.

Keep these tax implications in mind when choosing investment vehicles.

Additional Steps to Enhance Wealth Creation
Increase SIP Contributions

Gradually increase your monthly SIP amount with income growth.

This accelerates the wealth-building process.

Track Fund Performance

Review your investments semi-annually.

Replace underperforming funds with better alternatives.

Avoid Insurance-Cum-Investment Products

If you hold LIC or ULIP policies, consider surrendering them.

Reinvest the proceeds into diversified mutual funds.

This can provide better returns and flexibility.

Aligning with Financial Discipline
Stay invested for the full tenure to benefit from compounding.

Avoid panic selling during market downturns.

Regular investments and patience are key to achieving Rs 1 crore.

Final Insights
Reaching Rs 1 crore in 5 years is achievable with a structured and disciplined approach. Use a mix of equity, debt, and hybrid funds for diversification. Stick to regular investments and review performance periodically. Avoid direct funds and leverage the expertise of a Certified Financial Planner to optimise your portfolio. Prioritise financial discipline and align investments with your goals.

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

..Read more

Latest Questions
Adarsh

Adarsh Rai  |12 Answers  |Ask -

HR, Leadership coach - Answered on Jul 03, 2025

Asked by Anonymous - Jun 11, 2025Hindi
Career
Hi. I am currently 29. Married with no kids. Wife not earning. Planning for a kid this year. Monthly earning 60k post tax. Have savings of 2 lakhs. Have personal loan of 9 lakhs. Monthly expenses 40k including emi's. I have lost interest in job and I don't want to work anymore. I want to do business which can give monthly 50 to 60k income. Max I can invest 2lakhs. Is there any business which I can start with 2 lakhs and generate monthly income of 60k ? I am frustrated with working under an employer. I want to start my own venture. Please suggest.
Ans: Spandan, pause before you mail the resignation.

Your maths
60 k take-home
40 k spends (15 k of that is EMI on a 9 L loan)
→ 20 k buffer

A newborn will nudge monthly costs up by 8-10 k. Cash cushion shrinks fast.

So the plan must earn while you learn, not leap blind.

Keep the paycheck six more months.
Use evenings to test micro-ideas. Risk stays capped at ?0 for now.

Choose a “cash-this-month” niche, not a moon-shot.
Pick work that turns inventory ≤ ?50 k into sales inside 30 days.

Tiffin + office snacks (two dishes, 40 boxes) - ?25 k utensils, ?10 k FSSAI, ?5 k flyers - ?120 per box × 40 = ?4.8 k /day

Amazon / Flipkart reselling (phone cases, cables) ?40 k stock, ?15 k ads 25 % net margin on ?2 L monthly sales = ?50 k

Weekend print-on-demand & personalised gifting kiosk ?45 k heat-press kit (other options are there too) ?300 profit per mug × 200 pcs → ?60 k Bring Your Mug - Take Away Memories.

Local social-media management for clinics & salons ?0 gear, ?3 k Canva Pro ?8 k-?12 k per client; 6 clients hit target

None need heavy staff or rent. All can run beside your day job.

Set one simple goal: ?15 k profit by Day-30.
Hit it twice, raise target to ?35 k. Only when side income beats salary three months straight do you quit.

This is critical - Plug leaks early. Refinance personal loan to longer tenor; shave EMI to ~?10 k.

Park 1 L of savings in an emergency account—no touch.Skill up tiny, daily.
Watch a YouTube on ad copy, take a WhatsApp course on GST filings. Low cost, immediate payback.

Start small, sell fast, reinvest every rupee. Freedom comes, but by steps, not by one loud jump.

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Adarsh

Adarsh Rai  |12 Answers  |Ask -

HR, Leadership coach - Answered on Jul 03, 2025

Career
Hello Sir ,spandan here can you please tell me which fields will be good path for me, i want to join indian army after getting a bachelors degree but i also want to get a good course in engineering. And to improve my skills i wanted to choose a niche to select like Data science,cyber security,block chain and UX/UI. Can you tell me which is a better option
Ans: Spandhan - the Indian Army of 2030: satellites humming, networks under attack, swarms of sensors feeding dashboards in a forward command post. Officers who understand code, data flows, and signal security steer that fight.

Two decisions shape your path
The bachelor’s branch you choose (for campus learning and placements).

The Army entry gate you target after graduation.

Pick a branch that helps both goals: B.Tech CSE with a Cyber-Security or AI/Data-Science minor

Specialised B.Tech Cyber Security | Blockchain / UX-UI tracks| B.Tech ECE (electronics) with electives in embedded & comms

Go CSE (or ECE) and stack cyber-security / data-science electives. That mix lines up with Army tech entries and the private market.

Know your post-degree entry doors

TGC / SSC-Tech 20-27 Age B.E./B.Tech in listed branches inc. CSE, IT, ECE Signals, EME, Engineers

CDS – IMA/OTA 19-25 Any bachelor’s, tougher written + SSB All arms; tech grads often posted Signals

Agniveer (Technical) 17.5-21 10+2/ITI, but engineering diploma grads gain edgeKeep your CGPA ≥ 7, build fitness early, aim for NCC ‘C’ (bonus marks at SSB).Pick cyber-security as primary, add AI/data electives. You’ll be useful whether you wear olive greens or a hoodie.

Keep the plan simple: CSE + Cyber/AI → TGC/SSC-Tech → Corps of Signals.
Even if you later choose the corporate highway, those same skills pay handsomely.

...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.

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