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Can I build a 2 crore corpus with a 1 lakh salary and 45,000 EMI?

Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 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
Rama Question by Rama on Jul 16, 2024Hindi
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Hello sir , I want to.make corpus of 2Crores my salary is 1lakh and have a all emi of rs 45000 per month, I request you to kindly give me plan for for the best investment for next 10 to 15 years

Ans: Given your salary and current financial commitments, we can create a structured and balanced investment strategy.

Current Financial Snapshot
Monthly Salary: Rs. 1 lakh.

EMI Commitments: Rs. 45,000 per month.

Available for Investment: Rs. 55,000 per month.

Your goal is to build a corpus of Rs. 2 crores in 10 to 15 years. Let's break this down into actionable steps.

Savings and Budgeting
First, ensure a disciplined approach to saving and investing:

Emergency Fund: Set aside 6 months of expenses in a savings account or liquid fund.

Monthly Savings Goal: Allocate Rs. 55,000 for investments consistently.

Investment Strategy
To achieve your target, a diversified and balanced investment portfolio is essential:

Equity Mutual Funds
High Returns Potential: Equity mutual funds can offer high returns over the long term.

Actively Managed Funds: Opt for actively managed funds to potentially outperform the market.

Systematic Investment Plan (SIP): Start SIPs with a significant portion of your monthly savings.

Debt Funds
Stability and Low Risk: Debt funds provide stability and lower risk compared to equity.

Balanced Approach: Allocate a portion of your savings to debt funds for a balanced portfolio.

Systematic Investment Plan (SIP): Consider SIPs in debt funds to maintain consistent investments.

Hybrid Funds
Mix of Equity and Debt: Hybrid funds offer a balance of growth and stability.

Medium Risk: Suitable for moderate risk appetite.

Systematic Investment Plan (SIP): Start SIPs in hybrid funds to diversify your investments.

Tax Planning
Optimize your investments to minimize tax liabilities:

Tax-Saving Instruments: Use instruments like ELSS for tax benefits under Section 80C.

Diversify Investments: Spread investments across different instruments for tax efficiency.

Regular Portfolio Review
Monitoring and adjusting your portfolio is crucial:

Periodic Review: Review your portfolio with a Certified Financial Planner every 6 months.

Rebalancing: Adjust asset allocation based on market performance and financial goals.

Risk Management
Ensure adequate risk management for financial security:

Health Insurance: Maintain comprehensive health insurance coverage.

Life Insurance: If you have dependents, secure life insurance for their financial protection.

Investment Discipline
Maintaining discipline is key to reaching your goal:

Consistent Investments: Stick to your investment plan without interruption.

Avoid Timing the Market: Focus on long-term growth rather than short-term gains.

Stay Informed: Keep yourself updated on market trends and investment options.

Final Insights
To achieve a corpus of Rs. 2 crores in 10 to 15 years, follow a disciplined investment strategy. Save and invest Rs. 55,000 monthly in a mix of equity, debt, and hybrid funds. Optimize your investments for tax efficiency. Regularly review and rebalance your portfolio. Ensure adequate risk management through insurance.

You are on the right track with a clear goal. Stay focused, disciplined, and regularly consult with a Certified Financial Planner to adjust your strategy as needed.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

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

Asked by Anonymous - May 04, 2024Hindi
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I'm 26 year old with a salary of 30 lac, I have a EMI of 50,000 and not yet married, I want to make a Corpus of 1 cr in next 5-7 years, how much mutual funds and FD or any other investment to achieve this.
Ans: Congratulations on setting a financial goal to build a 1 crore corpus in the next 5-7 years! It's an ambitious yet achievable target with the right planning and investment strategy.

Evaluating Your Current Situation
With a monthly salary of 30 lakhs and an EMI of 50,000, you're already on solid ground. Now, let's assess how much you need to invest to reach your goal.

Investment Strategy
Given your timeframe and goal, here's a strategic approach:

Mutual Funds:
Mutual funds offer the potential for higher returns compared to traditional fixed deposits (FDs). Considering your age and the long-term horizon, you can allocate a significant portion of your investments to equity mutual funds. These funds have historically provided higher returns over the long term.

Fixed Deposits (FDs) or Other Conservative Investments:
While equity mutual funds offer growth potential, it's essential to balance your portfolio with safer investments like fixed deposits or debt funds. These provide stability and can act as a cushion during market downturns.

Investment Allocation
Without knowing your current savings or assets, it's challenging to provide precise numbers. However, here's a general guideline:

Mutual Funds:
Aim to invest a substantial portion of your savings, say around 70-80%, in equity mutual funds. Choose a mix of large-cap, mid-cap, and small-cap funds to diversify your portfolio and mitigate risk.

Fixed Deposits or Other Conservative Investments:
Allocate the remaining 20-30% to safer options like fixed deposits or debt funds. These will provide stability and liquidity to your portfolio.

Regular Review and Adjustment
As your circumstances change, such as salary increments or additional financial commitments, review and adjust your investment strategy accordingly. Regular monitoring ensures you stay on track towards your goal.

Conclusion
Building a 1 crore corpus in 5-7 years is feasible with a disciplined approach to investing and a well-diversified portfolio. Consider consulting with a Certified Financial Planner to tailor an investment plan suited to your specific needs and risk tolerance.

Best Regards,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 20, 2024

Asked by Anonymous - Jul 20, 2024Hindi
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Hello sir I am 32 years old having an sip of 1 lakh monthly i have 2 sons 5 years and 2 years I want to generate a corpus fund of 100cr in the next 30 to 35 years Could you guide me on the investment plan
Ans: You are 32 years old with two sons aged 5 and 2. You currently invest Rs. 1 lakh monthly through SIPs and aim to generate a corpus of Rs. 100 crore in the next 30-35 years. This is a substantial goal, requiring strategic planning and disciplined investing.

Long-Term Growth and Compounding
1. Power of Compounding:

The longer you invest, the more you benefit from compounding. Your 30-35 year horizon is ideal for significant growth.

2. Step-Up SIP:

To achieve your ambitious target, consider a step-up SIP. This involves increasing your SIP amount periodically.

Step-Up SIP Strategy
1. Annual Increase:

Increase your SIP amount by a fixed percentage annually. For example, a 10% annual increase can have a substantial impact over time.

2. Example Plan:

Year 1: Start with Rs. 1 lakh monthly.
Year 2: Increase to Rs. 1.1 lakh monthly.
Year 3: Increase to Rs. 1.21 lakh monthly, and so on.
Diversified Investment Portfolio
1. Equity Funds:

High Growth Potential: Allocate a significant portion to high-growth equity funds.
Allocation: Start with 60% of your SIPs. Increase allocation if you have higher risk tolerance.
2. Balanced Funds:

Stability and Growth: Mix of equity and debt provides stability.
Allocation: Allocate 20% of your SIPs to balanced funds.
3. Debt Funds:

Low Risk: Provides stability and mitigates risk.
Allocation: Allocate 20% of your SIPs to debt funds.
Monitoring and Adjustments
1. Regular Monitoring:

Monitor your investments quarterly. Ensure they are performing as expected.

2. Annual Review:

Conduct a comprehensive annual review. Adjust your investment strategy based on performance and changes in financial goals.

Children's Education and Marriage Fund
1. Dedicated SIPs:

Set up separate SIPs for your children's education and marriage. Start with a portion of your current SIP and gradually increase.

2. Goal-Based Planning:

Estimate the future costs of education and marriage. Adjust SIP amounts accordingly to meet these specific goals.

Risk Management
1. Adequate Insurance:

Ensure you have sufficient life and health insurance. This protects your family against unforeseen events.

2. Emergency Fund:

Maintain an emergency fund covering 6-12 months of expenses. This provides a financial cushion.

Final Insights
Achieving a corpus of Rs. 100 crore is ambitious but achievable with disciplined investing and strategic planning. Start with your current SIP of Rs. 1 lakh monthly and adopt a step-up SIP strategy, increasing your investment annually. Diversify your portfolio across equity, balanced, and debt funds for growth and stability. Regularly monitor and review your investments, and ensure you have adequate insurance and an emergency fund. Set up dedicated funds for your children's education and marriage. With consistent effort and disciplined investing, you can achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 30, 2024

Asked by Anonymous - Sep 29, 2024Hindi
Money
Monthly 2lakh to invest for 5 years -7years Kindly advise best plan to build 15cr plus corpus.
Ans: It’s commendable that you have set a bold financial goal and are ready to invest Rs 2 lakh every month. However, expecting Rs 15 crore in just 7 years with Rs 2 lakh SIP is, in most cases, an overly optimistic target. Let’s break this down further and explore a more realistic timeline while also allowing for wealth compounding to work in your favor.

Assessing the Return Expectations

For your investment to grow to Rs 15 crore in 7 years, the returns needed would be abnormally high. Even aggressive equity mutual funds, which historically provide the highest returns, may not deliver the required returns in such a short time frame.

A typical equity mutual fund may offer returns between 12-15% annually over the long term.

At these realistic growth rates, achieving Rs 15 crore in 7 years will be quite difficult.

To reach Rs 15 crore with a Rs 2 lakh monthly SIP in 7 years, you would need an extraordinary annual return of around 40-45%, which is highly improbable with traditional investment options.

How Compounding Needs Time to Work

The power of compounding plays a significant role in wealth creation, but it needs more time to show its true potential. Compounding works best over longer periods, especially beyond 10-15 years.

With 7 years, you are giving your investments a relatively short time frame, which limits the full benefit of compounding.

To fully realize the benefits of compounding, it is advisable to allow your investments more time to grow beyond 7 years.

By extending your investment horizon, you can allow your wealth to multiply at a more sustainable rate without relying on extremely high and unrealistic returns.

Extending the Investment Horizon for Better Growth

The key to reaching Rs 15 crore is to give your investments more time. By extending your horizon to 10 or even 15 years, you increase the likelihood of reaching your goal.

A Rs 2 lakh SIP in actively managed equity mutual funds with an average return of 12-15% could realistically reach Rs 8-10 crore in 10 years.

By allowing another 5 years of growth, compounding can work its magic, pushing your corpus closer to Rs 15 crore.

This extended timeline reduces the pressure to seek unrealistically high returns and makes the journey more achievable.

Recommended Strategy to Reach Rs 15 Crore

Rather than expecting Rs 15 crore in just 7 years, let’s develop a more practical strategy by extending your investment period and focusing on compounding growth.

1. Continue Rs 2 Lakh Monthly SIP for 7 Years

For the next 7 years, continue your commitment to investing Rs 2 lakh per month. This consistency is key to building wealth. However, instead of expecting Rs 15 crore by the end of 7 years, aim for a more reasonable corpus, which could be around Rs 3-4 crore at the end of 7 years, assuming returns of 12-15%.

Stick to SIPs in diversified equity mutual funds that focus on large-cap, multi-cap, and sectoral funds.

Actively managed funds provide better growth potential than passive index funds, especially in a medium-term horizon like this.

Keep reviewing your portfolio every year to ensure that it’s aligned with your financial goals.

2. Let Your Wealth Compound for an Additional 5-10 Years

Once you have built a sizable corpus after 7 years, the key is to let that money continue growing. Compounding will accelerate your wealth growth over time if you allow it to work longer.

Instead of withdrawing your corpus after 7 years, allow your investment to compound further for another 5-10 years.

Even if you stop contributing Rs 2 lakh after 7 years, the wealth you’ve accumulated will continue to grow due to compounding.

In the next 5-7 years, the compounded returns can take your corpus from Rs 3-4 crore to potentially Rs 10-12 crore.

3. Increase SIP Contributions After 7 Years If Possible

If your financial situation allows, you could further boost your investment by increasing the SIP contributions after 7 years. As your income and financial capacity grow, allocating a higher amount for investment will speed up the wealth accumulation process.

After 7 years, you could increase your SIP from Rs 2 lakh to Rs 3 lakh or more to accelerate the journey to Rs 15 crore.

By increasing your contribution and letting compounding work over a longer period, your target of Rs 15 crore becomes more achievable within the next 5-10 years.

4. Maintain a Balanced Portfolio for the Long Term

As you approach the 7-year mark, it’s essential to start balancing your portfolio to reduce risk. Shifting a portion of your funds to safer, more stable investments like debt funds or hybrid funds can safeguard the wealth you’ve built.

Continue to keep a significant portion of your portfolio in equities to benefit from long-term growth.

Gradually increase your allocation to debt or hybrid funds for stability, especially when you are within 5-10 years of your target.

A balanced approach will help you avoid large market corrections that could affect your corpus in later years.

5. Don’t Rely on Unrealistic Returns

It’s important to have realistic return expectations. Equity markets have historically delivered between 12-15% returns annually, and banking on anything higher can be risky.

Keep your expectations aligned with market realities.

By extending your horizon and allowing for compounding, you don’t need to chase extremely high returns to meet your goal.

Stick to equity mutual funds with strong historical performance and diversified portfolios.

Why Trying to Achieve Rs 15 Crore in 7 Years is Unrealistic

To understand why Rs 15 crore in 7 years is not realistic, let’s consider a few key points:

Even with aggressive growth, equity mutual funds typically provide 12-15% annual returns, far lower than what is required to meet this goal.

Achieving Rs 15 crore in 7 years would require an annual return of over 40%, which is not feasible in the long run.

Attempting to chase such high returns could lead you into risky and speculative investments that may result in capital losses.

A balanced and long-term approach is always better for achieving high financial goals like Rs 15 crore.

The Importance of Patience in Wealth Creation

Building Rs 15 crore requires patience and time. Compounding rewards those who invest regularly and leave their money untouched for long periods.

The longer you stay invested, the more compounding will work in your favor.

Stay disciplined and avoid the temptation to withdraw your funds prematurely.

Market volatility may occur, but staying invested through ups and downs is crucial for long-term success.

Final Insights

Achieving Rs 15 crore is a significant financial goal. While it may not be realistic to expect this in just 7 years with Rs 2 lakh SIPs, you can certainly reach it by allowing more time for your wealth to compound. Extending your investment horizon to 10-15 years, while continuing your SIPs, will give you the best chance of success.

Be patient and let compounding work for you over the long term.

Continue investing Rs 2 lakh per month for 7 years, and allow the corpus to grow further beyond this time frame.

Regularly review and adjust your portfolio to stay aligned with your financial goals.

Don’t rely on speculative returns—stick to a balanced and diversified portfolio to achieve steady growth.

By following these strategies and giving yourself more time, your target of Rs 15 crore can become a reality without taking excessive risks.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 31, 2025

Asked by Anonymous - May 31, 2025
Money
Sir, I am a serving Indian Army Officer with a service of 8 yrs. My monthly income post all deductions is Rs 1.25/month in approx expenditure of Rs 20k/month. I had recently purchased a flat for which I took a home loan of Rs 55 lac for a period of 20 yrs with Rs 55k/month going in form of EMIs as a result my all savings in MF or FDs have come to a halt. As I have rented out my flat for Rs 15k/month rent my cumulative salary can be taken as 1.4 lac/month. One can expect an yearly increment of 10% in the salary. Considering this I want to create a corpus of Rs 50 lac in next 10 yrs with my existing EMIs. Request to guide me for my further investment & creating a corpus for my future. Regards
Ans: You have made a strong start with property investment and a structured EMI plan. Now, your goal is to create a Rs 50 lakh corpus in the next 10 years while continuing with your existing home loan EMI of Rs 55,000 per month. Let’s build a 360-degree financial plan around this.

I will evaluate your current income, expenses, and liabilities. Then guide you on how to restart your investments gradually, without adding financial stress.

Your Current Financial Profile

Your net monthly income is Rs 1.25 lakh.

Your EMI is Rs 55,000. This is 44% of your income.

You earn Rs 15,000 as rent. This brings total monthly inflow to Rs 1.4 lakh.

Your regular monthly expenses are Rs 20,000.

You have stopped all SIPs and investments due to EMI burden.

Your goal is to build Rs 50 lakh in 10 years.

Appreciation for Your Disciplined EMI Repayment

Paying Rs 55,000 EMI regularly shows strong discipline.

You are generating rental income, which supports cash flow.

You are committed to wealth creation. That is very inspiring.

You are ready to plan ahead. That is a big financial strength.

Home Loan Should Not Stall Your Financial Goals

Do not allow EMI to stop your investments for long.

You should resume SIPs within 3 to 6 months.

Try to cut some lifestyle expenses to free money.

Even Rs 5,000–10,000 SIP is a good restart.

Small consistent SIPs grow big with time.

Maintain Emergency Fund First Before SIP Restart

Emergency fund gives peace of mind during job shifts or crisis.

Keep 4–5 months of expenses as emergency fund.

Use liquid fund or savings account for this purpose.

Emergency fund should come before investments.

Avoid using credit card or personal loans in emergencies.

Start With Low SIPs, Increase Gradually Every Year

Begin SIP with Rs 5,000 monthly.

After 6 months, increase to Rs 7,000 or Rs 10,000.

Add top-up SIP every year with salary increment.

Let SIPs rise with income growth.

Avoid starting big SIP and stopping later.

Avoid Index Funds — Choose Actively Managed Funds

Index funds just copy the market.

They don’t protect in falling markets.

No fund manager makes active decisions in index funds.

Actively managed funds adapt to market changes.

They help manage volatility with professional oversight.

Certified Financial Planners recommend active funds for goals.

Don’t Go for Direct Funds – Use Regular Funds via MFD with CFP

Direct funds don’t guide on asset mix.

You won’t get rebalancing or exit advice in direct plans.

Investors often choose wrong fund categories in direct route.

You may miss goal deadlines with wrong fund mix.

A Certified Financial Planner gives professional fund curation.

Regular plan has MFD support for lifetime investment discipline.

Continue Home Loan and Avoid Prepayment Now

Do not rush to prepay the loan right now.

You need liquidity for other financial goals.

Focus on creating wealth instead of reducing loan.

Let rental income partly support EMI.

Use surplus income for SIPs, not for prepayment.

Tax Benefits from Home Loan Can Also Support Planning

You get deduction under Sec 80C for principal.

Interest up to Rs 2 lakh per year is deductible under Sec 24.

These tax savings can boost your net take-home.

Redirect savings into long-term mutual funds.

Keep Rs 50 Lakh Goal in Focus – Needs Consistent SIPs

Rs 50 lakh in 10 years needs time and discipline.

Start small SIPs. Gradually scale up to Rs 15,000–20,000.

You need higher equity exposure for this goal.

Mix large-cap, flexi-cap and mid-cap funds.

Avoid conservative or debt funds for this goal.

Annual Salary Growth Can Boost Investment Potential

You expect 10% annual salary growth.

This is a major advantage. Use this smartly.

Every salary hike, increase your SIP by 10% to 15%.

Avoid lifestyle inflation. Keep expenses under control.

Growing SIP every year is better than big SIP once.

Don’t Use FDs or Traditional Policies for Long Goals

FDs don’t beat inflation in the long run.

Their returns are fully taxable.

Avoid parking long-term funds in FDs.

Same applies for traditional LIC policies.

They offer low return, poor liquidity.

If You Hold LIC or Investment-cum-Insurance Plans

ULIPs or endowment policies don’t help long-term wealth.

If you hold such policies, assess surrender value.

Consider exiting if they have completed 5 years.

Reinvest the maturity in equity mutual funds.

Separate insurance and investment always.

Protection Plan Is a Must for Army Officers

Buy a term plan equal to 15–20 times of annual income.

Premium is very low, benefits are high.

Choose plain term insurance, not return plans.

This secures family in case of uncertainty.

Future-Proof Your Plan with Goal-Based Investments

Keep investments linked to future goals.

Rs 50 lakh is a specific, time-bound goal.

Use goal tracking sheet every year.

If needed, realign fund choices.

Stay flexible, but never stop SIPs.

Track Fund Performance Every Year

Mutual funds should match your goal speed.

If any fund underperforms for 2 years, replace it.

Don’t chase past returns.

Use guidance from CFP for fund selection.

Review and rebalance every 12 months.

You Are on the Right Track, Keep Going Steady

Your EMI is structured, rent income supports cash flow.

Your expenses are low and controlled.

You are focused on wealth creation, that is powerful.

Now, just start small SIPs and keep them regular.

Follow plan with patience and discipline.

Finally

Do not let EMI stop your investment journey.

Start small SIPs and increase yearly.

Avoid direct and index funds.

Take guidance from a Certified Financial Planner.

Create Rs 50 lakh with steady and structured SIPs.

Use future salary hikes wisely.

Maintain emergency funds and term insurance.

Avoid FDs and traditional plans.

Your future is financially strong if you follow this path.

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

..Read more

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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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