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36-Year-Old with 32 Lakh Salary & 96 Lakh Savings: How to Reach 5 Crore by 50?

Milind Vadjikar | Answer |Ask -Follow

Insurance, Stocks, MF, PF Expert - Answered on Nov 09, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more

Asked by Anonymous - Nov 09, 2024Hindi

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Hello All . Looking for some advice I am 36 yr old and working class with Sal of 32 lakhs per annum Current savings are 33 lakhs in PPF / PF and Gratuity 3 lakhs in Shares and Mutual Fund 10 lakhs in Physical Gold 20 lakhs in Cash Liabilities Home loan outstanding 30 lakhs I wish to retire with corpus of 5cr and at age of 50 What do you think should change in my current portfolio

Ans: Hello;

You may begin a monthly sip of 80 K into a combination of pure equity mutual funds and continue for 14 years.

At 50, your sip may yield you a corpus of around 3.5 Cr.

The PF corpus will grow over 14 years into a sum of around 1 Cr. No additional contributions are assumed, which may be deemed as surplus.

The gold holding if liquidated and invested in equity mutual funds as lumpsum will yield a corpus of around 0.5 Cr after 14 years.

If you do not wish to liquidate gold holdings then the monthly sip may be hiked to 90 K.

The gold holding will grow in value to around 0.25 Cr over 14 years and 90 K sip will yield corpus of 3.75 Cr+.

Considering both scenarios you achieve your target of 5 Cr in 14 years:

80 K sip-3.5 Cr in 14 years
Pf value-1.0 Cr in 14 years
Gold holdings converted to equity MF holdings: 0.5 Cr in 14 years
Grand Total -5.00 Cr

90 K sip- 3.75 Cr+ in 14 years
Pf Value- 1.00 Cr in 14 years
Gold Value- 0.25 Cr in 14 years
Grand Total -5.00 Cr+

Pure equity MF returns assumed at 12%, PF at 8% and Gold return at 7%.

Happy Investing;

Asked on - Nov 10, 2024 | Answered on Nov 10, 2024

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Thank you for detailed analysis Does my current investment show some stable corpus ? Forgot to mention the Home that I own the current is 1.60 Cr with outstanding loan of 30 lakhs

Ans: Hello;

Your investment is quite stable since it comprises mostly of debt(PF), gold and liquid cash. (Self occupied property is reckoned as nil value investment in financial planning).

But you need exposure to equity through some way (NPS, MFs, not direct stocks) for growth.

However if you are a risk averse investor then you may do corpus building through the assets other then equity but you may have to put large sums since returns from these asset classes are relatively lesser compared to equity.

Equity asset class is volatile in the short to medium term but over long-term (7 year+) it is comparatively less volatile and yields relatively better returns.

Prepay the home loan as early as possible.

Happy Investing;

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