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Ramalingam Kalirajan |8068 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 17, 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

Asked by Anonymous - Apr 13, 2024Hindi

I and my wife are salaried employees. Both of us are above 40 and I am investing 15000 per month in Mutual funds. And i also invest 5000 per month in PPF. I want to invest another 20000 per month so that I can make a corpus of 10 crores in the next 10 years. Is it possible and what should I invest in

Ans: Achieving a Corpus of ?10 Crores in 10 Years

Congratulations on your disciplined approach to saving and investing. Your goal of building a corpus of ?10 crores in the next 10 years is ambitious, but with a structured plan, it can be achievable. Let's explore the investment avenues that can help you reach this target.

Evaluating Your Current Investment Strategy
You are already investing ?15,000 per month in mutual funds and ?5,000 per month in PPF. This is a solid start. Mutual funds offer diversification, potential for high returns, and flexibility. PPF, though offering lower returns, provides safety and tax benefits.

Assessing the Required Returns
To achieve ?10 crores in 10 years, you need significant returns. This requires a balanced approach, combining growth-oriented investments with risk management. Historical data suggests equities and mutual funds can offer higher returns compared to fixed-income instruments.

Exploring Growth-Oriented Investments
Actively Managed Mutual Funds
Actively managed mutual funds can potentially offer higher returns compared to index funds. Fund managers actively select stocks, aiming to outperform the market. This can be beneficial for long-term growth.

Equity Mutual Funds
Equity mutual funds invest in shares of companies, offering high growth potential. With your long-term horizon, equity funds can be a strong choice. They tend to perform well over extended periods, though they come with higher volatility.

Diversified Portfolio
Creating a diversified portfolio reduces risk while maximizing returns. Include a mix of large-cap, mid-cap, and small-cap funds. This diversification can help balance risk and reward effectively.

Regular and Disciplined Investing
Systematic Investment Plan (SIP)
Continue your SIP approach. It helps in averaging the cost of investment and instills discipline. Increasing your SIP amount to include the additional ?20,000 will significantly boost your corpus over time.

Monitoring and Rebalancing
Regularly review and rebalance your portfolio. This ensures alignment with your goals and risk tolerance. Market conditions change, and rebalancing helps in maintaining the desired asset allocation.

Benefits of Professional Guidance
Certified Financial Planner (CFP)
Consulting a Certified Financial Planner can provide tailored advice. A CFP can help in fine-tuning your investment strategy, ensuring it aligns with your goals and risk profile.

Avoid Direct Funds
Direct funds might seem cost-effective, but they lack professional guidance. Investing through a Mutual Fund Distributor (MFD) with CFP credentials provides expert advice, which can enhance your investment strategy.

Importance of Patience and Consistency
Investing requires patience and consistency. Markets will have ups and downs, but staying invested for the long term typically yields positive results. Maintain a disciplined approach, avoiding emotional decisions based on market fluctuations.

Complementing with Safe Investments
While focusing on high-growth investments, continue investing in safe instruments like PPF. They provide stability and act as a safety net. A balanced portfolio includes both high-growth and stable investments.

Conclusion
Achieving ?10 crores in 10 years is possible with a strategic approach. By increasing your SIP, diversifying your portfolio, and seeking professional guidance, you can reach your goal. Stay disciplined, monitor your investments, and remain patient. Your dedication and structured investment strategy will pave the way to achieving your financial target.

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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