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Ramalingam Kalirajan |6448 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 14, 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 - May 07, 2024Hindi

My Current age is 40. I am investing through SIP from last 7 years started with Rs. 6000 and now increased to Rs.45000 from January 2024. (25% large cap, 25% mid cap & 50% small cap). My aim is to built corpus of 5 Cr. Is it possible to attend in next 10 years if i keep on increasing the amount by 10% every year.

Ans: That's a great start on your investment journey! Here's a breakdown to analyze your goal of building a Rs. 5 crore corpus in 10 years:

1. Positive Steps Taken!

Disciplined Investor! Increasing your SIP from Rs. 6,000 to Rs. 45,000 and consistently investing for 7 years shows discipline. This is a positive habit for wealth creation.

Diversified Portfolio: Your asset allocation of 25% Large Cap, 25% Mid Cap, and 50% Small Cap provides some diversification across market capitalizations.

2. Reaching the Target:

Ambitious Goal! Building a Rs. 5 crore corpus in 10 years starting at Rs. 45,000 monthly SIP is ambitious. It depends on your investment returns, which are difficult to predict.

Market Performance: Historically, Equity has provided good long-term returns, but there are no guarantees. Market fluctuations can impact your final corpus.

3. Let's Do the Math (Hypothetically):

Hypothetical Example: Assuming a hypothetical 12% annual return (past performance is not a guarantee of future results), a monthly SIP of Rs. 45,000 increased by 10% annually could lead to a corpus of around Rs. 3.3 crore in 10 years.

Gap to Bridge: There might still be a gap between your target corpus and the potential accumulation. Consider these options:

Increase SIP amount: If possible, consider increasing your SIP amount more than 10% annually to reach your target faster.
Extend Investment Horizon: If increasing the SIP amount is difficult, consider extending your investment horizon beyond 10 years to allow more time for compounding.
Seek Professional Guidance: A Certified Financial Planner (CFP) can analyze your risk tolerance, investment goals, and suggest a personalized strategy to potentially reach your target corpus.
Remember, reaching your financial goals requires discipline, potentially increasing your investment amount, and potentially extending your investment timeframe. Consulting a CFP can help you create a roadmap to maximize your chances of success.

Here's the key takeaway: You're on the right track! Keep investing consistently, and consider consulting a CFP for a personalized plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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