I am investing in below funds on monthly basis through SIP.

Axis Long Term Equity 7000 ICICI Pru Bluechip Fund 6000

Mirae Blanced Advantage Fund 4500 Mirae Emerging Bluechip Fund 5500 10 lakh accumulated so far

I plan to accumulate 2 cr by 2035. How much more do I need to save monthly from April 2023 to achieve my goal?

Ans: Rs. 18000 per month @13% should be sufficient to achieve the Rs. 2 crs target in 20 years

Ans: Hello and thanks for writing to me.

I will answer in 2 parts. One is the existing corpus of Rs.1.5 Crore which will also grow and then there will be fresh SIP's that you will begin.

If your current portfolio grows at 14%, the value of your current investments of Rs.1.5 Crore will be around Rs.3.7 Crore.

To create a corpus of around 6.3 Crore in 7 years, you will need to begin monthly SIP's of around Rs.4.5 Lakh.

Ans: Your commitment to investing is commendable, and your goal of accumulating 1 crore in 5 years is ambitious yet achievable with prudent planning. Let's assess the adjustments needed in your SIPs to reach this milestone.

Given your current SIP of 8k per fund per month across 10 mutual funds, totaling 80k monthly, we can evaluate the required increase in SIP amount annually to meet your target.

Firstly, we'll need to estimate the expected rate of return on your mutual fund investments. Since you've invested across various categories like contra, growth, hybrid, flexi, midcap, and smallcap, your portfolio's expected return could vary based on market conditions and fund performance. Historically, equity investments have yielded returns ranging from 12% to 15% over the long term.

Assuming a moderate annual return of 12%, we can use a financial calculator or formula to determine the required SIP amount increase.

Considering the compounding effect, you would need to increase your SIP amount by approximately 20-25% annually to reach your 1 crore target in 5 years.

However, this calculation is based on various assumptions and market conditions, which may fluctuate. Therefore, it's crucial to periodically review your investments and adjust your SIP amounts accordingly to stay on track towards your goal.

Additionally, consulting with a Certified Financial Planner can provide personalized insights and strategies to optimize your investment approach and ensure you're making informed decisions aligned with your financial objectives.

In summary, increasing your SIP amount annually by around 20-25% can help you achieve your target of accumulating 1 crore in 5 years, provided that your investments generate expected returns. Regular monitoring and professional guidance are key to navigating market dynamics and achieving your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Crafting Your Financial Journey to a ?2 Crore Retirement Corpus
Understanding Your Financial Landscape
You are 47 years old and have recently purchased a house worth ?90 lakhs, with a ?10 lakh loan. Additionally, you have ?30 lakhs invested in mutual funds. Your goal is to accumulate ?2 crores by retirement to secure your regular expenses. Achieving this requires a clear and strategic savings plan through Systematic Investment Plans (SIPs).

Genuine Compliments and Understanding
Your foresight in planning for retirement and taking actionable steps shows great financial prudence. Investing in mutual funds and securing a home demonstrates a balanced approach to building wealth and stability.

Evaluating Your Current Situation
Current Investments and Assets
Home Value: ?90 lakhs
Outstanding Loan: ?10 lakhs
Mutual Funds: ?30 lakhs
With a solid foundation in mutual funds and real estate, your next focus should be increasing your investments to meet your retirement goal.

Setting a Realistic SIP Target
Calculating the SIP Amount
To reach ?2 crores by retirement, you need to consider several factors:

Current Mutual Fund Value: ?30 lakhs
Time to Retirement: Assuming you plan to retire at 60, you have 13 years.
Required Corpus: ?2 crores
Existing Assets: ?30 lakhs in mutual funds
The remaining amount to be accumulated is ?1.7 crores. To determine the exact SIP amount, consult with a Certified Financial Planner (CFP) who can consider market conditions, expected returns, and your risk tolerance.

Creating a Diversified Investment Strategy
Choosing the Right Mutual Funds
Equity Mutual Funds: Allocate a significant portion to equity mutual funds for high growth potential. Diversify across large-cap, mid-cap, and multi-cap funds to spread risk.
Debt Funds: Include debt funds to balance risk and provide stability. Short-term and medium-term debt funds can offer steady returns with lower risk.
Balanced Funds: Consider balanced funds that invest in both equities and debt instruments. These funds provide a mix of growth and stability.
Benefits of Actively Managed Funds
Actively managed funds are preferable over index funds for achieving specific financial goals. These funds benefit from expert fund managers who adjust the portfolio based on market conditions. Investing through a CFP ensures that you receive professional advice and a tailored investment strategy.

Regular Monitoring and Adjustment
Performance Review
Regularly review your investment portfolio’s performance. This ensures that your investments are aligned with your goals and allows for timely adjustments based on market trends and personal circumstances.

Rebalancing Portfolio
Periodic rebalancing of your portfolio is essential. This process involves adjusting the allocation between equities and debt to maintain the desired risk-return balance. Rebalancing helps in optimizing returns and managing risks effectively.

Importance of Professional Guidance
Role of a Certified Financial Planner
A CFP can provide personalized advice tailored to your financial situation and goals. They help in creating a strategic investment plan, selecting the right funds, and making necessary adjustments over time. Working with a CFP ensures that your investment journey is well-guided and on track.

Avoiding Common Pitfalls
Disadvantages of New Fund Offers (NFOs) and Sectoral Funds
New Fund Offers (NFOs) often lack a performance track record, making them riskier compared to established funds. Sectoral funds, which focus on specific industries, can be highly volatile. Diversified mutual funds offer a balanced risk-return profile and are generally safer for long-term goals.

Risks of Direct Funds
Investing in direct funds might save on commission fees but often lacks professional guidance. Regular funds, managed by experienced professionals and recommended by CFPs, can provide better risk management and potentially higher returns.

Conclusion
To achieve your goal of accumulating ?2 crores by retirement, start with a well-planned SIP strategy. Invest in a mix of equity, debt, and balanced funds, and seek guidance from a certified financial planner. Regularly review and adjust your portfolio to stay aligned with your financial objectives.

Your proactive approach to securing your retirement and providing for your future expenses is commendable. With a strategic investment plan and professional guidance, you are well on your way to achieving your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in