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Investing 6 lakhs annually to reach a 10 crore corpus in 15 years: Should I stick with my current strategy?

Ramalingam Kalirajan |8013 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Feb 17, 2025

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 - Feb 16, 2025Hindi

I am investing 6lakhs annually in SBI smart privilege since 2023, the value of which is 15lakhs now. I had invested in tata retirement mutual fund which is now at 7.5lakh-it was a 15k monthly investment.i want a corpus of 10crore in the next 15 years. What should be my strategy

Ans: Your goal of Rs 10 crore in 15 years is ambitious but achievable with the right strategy. Below is a structured approach to help you optimize your investments.

Review of Current Investments
You are investing Rs 6 lakh annually in an insurance-based investment plan.

You have also invested in a retirement-focused mutual fund, now valued at Rs 7.5 lakh.

These investments may not be the most efficient for high long-term growth.

Issues with SBI Smart Privilege Plan
Insurance-based investments often have high charges and lower returns.

Lock-in periods and surrender charges make them less flexible.

Switching to a mutual fund-based approach may be more effective.

Action Plan for SBI Smart Privilege Plan
Check the surrender value and exit charges.

If charges are reasonable, consider shifting to equity mutual funds.

A well-diversified portfolio can deliver higher long-term growth.

Optimizing Your Mutual Fund Portfolio
The retirement fund may have a conservative asset allocation.

You need funds with higher equity exposure for long-term wealth creation.

Diversify across flexi-cap, large-cap, mid-cap, and sectoral funds.

Required Monthly Investment for Rs 10 Crore
To reach Rs 10 crore in 15 years, a structured SIP approach is required.

Increasing SIP contributions over time is essential.

Lump sum investments during market corrections can boost returns.

Strategic Asset Allocation
70-80% in equity mutual funds for long-term growth.

10-15% in debt funds for stability and risk management.

5-10% in gold or international funds for diversification.

Tax-Efficient Investment Approach
Equity funds are more tax-efficient than insurance-based plans.

Long-term capital gains above Rs 1.25 lakh are taxed at 12.5%.

Debt fund gains are taxed as per your income slab.

Final Insights
Review and possibly exit the SBI Smart Privilege Plan.

Shift focus to equity mutual funds for better growth.

Maintain a disciplined SIP approach and increase investments over time.

Diversify investments for better risk management.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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