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Tax, Mutual Fund Expert - Answered on Apr 05, 2023

Hardik Parikh is a chartered accountant with over 15 years of experience in taxation, accounting and finance.
He also holds an MBA degree from IIM-Indore.
Hardik, who began his career as an equity research analyst, founded his own advisory firm, Hardik Parikh Associates LLP, which provides a variety of financial services to clients.
He is committed to sharing his knowledge and helping others learn more about finance. He also speaks about valuation at different forums, such as study groups of the Western India Regional Council of Chartered Accountants.... more

Question by Sukhvinder on Mar 28, 2023Hindi

I am 45 and currently doing MF SIP of close to 45k per month for last 3 years. My target is to accumulate portfolio of close to 3 cr in next 10 year. Pls advise how to go abt it. Also below is my current portfolio as I need advise whether I need to change / switch anything on them. Regards//Sukhvinder 1. Axis Midcap Fund-Reg(G) 2. Parag Parikh Flexi Cap Fund-Reg(G) 3. ICICI Pru Bluechip Fund(G) 4. Kotak Flexicap Fund(G) 5. Mirae Asset Large Cap Fund-Reg(G) 6. HDFC Hybrid Equity Fund(G)

Ans: Dear Sukhvinder,

Thanks for asking about your financial goals. You have been investing INR 45,000 each month for the last three years and want to reach INR 3 crores in the next 10 years. Let's see if that's possible, considering your past investments.

Assuming you've earned an average return of 12% per year (which is a good estimate for a diverse set of investments), the amount you've already invested in the past three years should be around INR 21.6 lakhs. If you keep investing INR 45,000 each month for the next 10 years and continue to earn 12% per year, you'll have about INR 1.08 crores in 10 years. Adding the past investments to this amount, you'll have around INR 1.29 crores in total.

To reach your target of INR 3 crores, you'd need to earn around 23% per year, which is very high and not very likely. One way to get closer to your goal is to invest more each month. If you increase your monthly investment to INR 75,000 and still earn 12% per year, you could have around INR 1.80 crores in 10 years. Adding your past investments, you'll have about INR 2.01 crores in total. It's not INR 3 crores, but it's more realistic given the risks involved.

Your current investments include a mix of midcap, flexicap, large-cap, and hybrid funds, which is good. But it's important to keep an eye on how each fund is performing compared to others in the same category. If any of your funds aren't doing well, think about switching to better ones.

In the end, reaching INR 3 crores in 10 years might not be possible with your current investments and a 12% return. But by investing more each month and keeping your investments diverse, you can still build a good amount of savings. Make sure to review your investments regularly and make changes as needed.

Best of luck on your financial journey!

Warm Regards,
Hardik Parikh

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