I am 23 and I started investing in MF from this month at my 45,50 i want more than 20crore is it possible with 5000 spi by increasing 10% every year?
Ans: Starting your investment journey at a young age is commendable, and setting ambitious financial goals like accumulating 20 crores by the time you're 45 or 50 is definitely achievable with disciplined investing and the power of compounding. Let's break down the feasibility of this goal:
1. Systematic Investment Plan (SIP): Investing 5000 rupees monthly through SIP is a prudent approach to wealth accumulation. By increasing your SIP amount by 10% each year, you're harnessing the power of incremental investing to accelerate wealth growth over time.
2. Rate of Return: The rate of return on your investments plays a crucial role in achieving your financial goal. While historical average returns of equity mutual funds in India have been around 12-15% per annum, it's essential to remain realistic and consider a conservative estimate to account for market volatility.
3. Time Horizon: With a time horizon of 22-27 years (from age 23 to 45 or 50), you have the advantage of long-term compounding, which can significantly amplify your investment returns.
4. Investment Strategy: To achieve your goal of 20 crores, you'll likely need to adopt an aggressive investment strategy, focusing primarily on equity mutual funds to capitalize on their higher growth potential over the long term.
5. Regular Monitoring and Adjustments: Regularly monitor the performance of your investments and review your financial plan periodically. Adjust your SIP contributions and investment strategy as needed to stay on track towards your goal.
While achieving a target of 20 crores with a 5000 rupees SIP may seem ambitious, it's not impossible with diligent planning, disciplined investing, and a long-term perspective. However, it's crucial to remain flexible and adapt your approach based on changing market conditions and personal circumstances.
Consider consulting with a Certified Financial Planner to develop a customized financial plan tailored to your specific goals, risk tolerance, and investment horizon.
With determination, discipline, and smart investing, you can work towards achieving your financial aspirations.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
