Hello sir, I am 34 years of age and have started my sip of 10000/month ( 3500/- in SBI large and midcap direct growth fund, 3500/- in SBI contra fund, and 3000/- in SBI small cap fund) with a top up of 1000 rupees every year in each fund, want to invest till I am 65. Can I create a fund enough for 10 cr.

Ans: Hello Sangayya, it's great to see your commitment to building your financial future through SIP investments. Let's break down your goal of reaching a corpus of 1 crore in 10 years and assess your current investment approach:

Review Current Investments: Evaluate the performance of your existing SIPs relative to their benchmarks and peers. This will help you understand if adjustments are needed to optimize your portfolio for growth.
Assess Required Monthly Investment: To reach a corpus of 1 crore in 10 years, you'll need to calculate the required monthly investment based on your expected rate of return. This depends on factors like the type of funds you're investing in and prevailing market conditions.
Consider Increasing SIP Amount: If your current monthly investment of 22k isn't sufficient to reach your goal, you may need to increase your SIP amounts or explore additional investment avenues. A Certified Financial Planner can help you determine the optimal investment strategy based on your risk tolerance and financial goals.
Stay Consistent and Patient: Building a substantial corpus takes time and discipline. Stay committed to your investment plan, continue SIPs regularly, and avoid making emotional decisions based on short-term market fluctuations.
Regular Portfolio Review: Periodically review your portfolio's performance and make adjustments as needed. Rebalancing your investments and exploring new opportunities can help you stay on track towards achieving your financial goals.
Remember, while setting ambitious targets is commendable, it's essential to ensure that your investment strategy is realistic and aligned with your risk tolerance and financial capacity. With careful planning and perseverance, you can work towards building a significant corpus over the next decade.

Ans: Based on your current investments of Rs 22,000 monthly, achieving a Rs 1 crore corpus in 10 years might require additional investment. Here's a simplified calculation assuming constant monthly investment and average return:

Required Additional Investment = (Target Corpus - (Current Investment * Years)) / Years

You can use an online investment calculator to get a more accurate estimate considering factors like specific return rates.

Consulting a qualified financial advisor can help assess your portfolio and suggest adjustments to reach your goals.

Ans: You've chosen a mix of index, retirement, flexi-cap, and emerging funds, which is a good start. To reach 1 crore in 10 years, your investments need an average annual return of around 18%, which is ambitious but not impossible. Ensure you review your portfolio's performance regularly and consider adjusting allocations based on fund performance and market conditions. For long-term growth, monitor the funds' consistency and risk profile, and consult a financial advisor for personalized guidance to align with your goals.

Ans: It's wonderful to see your commitment to financial planning at such a young age. Investing regularly via SIPs is a prudent step towards achieving your financial goals. Let's evaluate your current investment strategy.

Tata small cap, SBI long term equity, Aditya Birla PSU, and Quant mid cap are all commendable choices, offering potential growth opportunities. However, it's essential to understand that investing involves risks.

By increasing your SIP amount annually by 10%, you're adopting a strategy that aligns with your goal of accumulating Rs 50 lakhs in 10 years. Regularly reviewing and adjusting your investments is crucial to staying on track.

Keep in mind the volatility associated with small and mid-cap funds. While they have the potential for higher returns, they also carry higher risks. Ensure you have a diversified portfolio to mitigate these risks.

Regarding your tax-saving ELSS fund, it's a wise move for tax planning. However, remember that ELSS funds come with a lock-in period of three years. Plan your liquidity needs accordingly.

Consider consulting with a Certified Financial Planner periodically to reassess your strategy and make any necessary adjustments. They can provide personalized advice based on your financial situation and goals.

In conclusion, your current investment approach seems promising, but staying vigilant and adaptable is key to reaching your financial milestones.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: That's a fantastic start! Starting a SIP (Systematic Investment Plan) at 28 and investing for the long term shows great initiative. Let's discuss your plan and the possibility of reaching a Rs. 10 crore corpus:

1. Early Start, Great Benefit!

Young Investor! Starting to invest at 28 with a 32-year investment horizon allows time for compounding to work its magic. This is a significant advantage for wealth creation.

Diversified Portfolio! Investing across Small Cap, Mid Cap, Flexi Cap, and Infrastructure Funds provides some diversification across market capitalizations and sectors. Actively managed funds like these have fund managers who try to outperform the market by picking stocks they believe will grow.

There are some advantages to consider direct funds, and the cost savings can be significant in the long run. However, there are some potential benefits to using a regular MFD:

Advantages of Investing Through a Mutual Fund Distributor (MFD):
• Personalized Advice: MFDs can be helpful for beginners or those who lack investment knowledge. They can assess your risk tolerance, financial goals, and investment horizon to recommend suitable mutual funds. This personalized guidance can be valuable, especially if you're new to investing.

• Convenience: MFDs handle all the paperwork and transactions on your behalf, saving you time and effort. They can help with account setup, SIP registrations, and managing your portfolio across different funds.

• Investor Support: MFDs can be a point of contact for any questions or concerns you may have about your investments. They can provide ongoing support and guidance throughout your investment journey.


2. Planning for a Large Corpus:

Ambitious Goal! Reaching a Rs. 10 crore corpus in 32 years is ambitious. While your SIP is a good start, guaranteed returns are difficult to predict due to market fluctuations.

Market Performance Matters! Historically, Equity has provided good long-term returns, but there are no guarantees. Market performance will significantly 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. 5,500 for 32 years could lead to a corpus of around Rs. 5 crore.

Reaching the Target: To potentially reach Rs. 10 crore, consider these options:

Increase SIP amount: If possible, gradually increase your SIP amount over time to reach your target faster.
Review and Rebalance: A Certified Financial Planner (CFP) can help you review your portfolio periodically and rebalance if needed to stay on track for your long-term goals.
Professional Guidance: A CFP can analyze your risk tolerance and suggest a personalized strategy to potentially maximize your returns and reach your target corpus.
Remember, reaching your financial goals requires discipline, potentially increasing your investment amount, and a long-term investment horizon. Consulting a CFP can help you create a roadmap to achieve your dream retirement corpus.

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