Investment to make a corpus of 100 crore rupees in 30 years
I am a 28-year-old businessman. I started investing in mutual funds three years ago. I am investing in Parag Parikh Long Term Equity Fund and SBI Small Cap Fund. Present value of my investments is ₹23 lakh. I can invest ₹25 lakh more every year. I want to build a corpus of ₹100 crore before I retire. Is it possible to do it with mutual funds? How should I invest and where?
By Chokkalingam Palaniappan, Director, Prakala Wealth Management
I'm glad to know that you've a big digit goal in your life, in your young age you have all the opportunities of realising your goal before retiral. For example, you have 32 years to achieve your goal if you will stop working at the age of 60. For long term wealth, mutual funds are undoubtedly one of the best approaches to invest. Right now, you're investing 2 lakh rupees per month, increase the same by 2 lakh more, which means invest 4 lakh rupees per month. Suppose an average return of 10% per annum, At the age of 60 you'll have about 96.55 crore. Recent investment of your 23 lakhs rupees would grow to 5.57 crore rupees. Summing up all, you'll have 102.12 crore rupees in 32 years.
To make this work, you must invest in a mixture of balanced funds, such as small, mid and large cap funds.
With the time and knowledge you can switch the caps alternatively.
If you are investing in a multi cap and a small cap fund right now, you may go ahead with large & mid cap or multi cap funds alone if you want to keep things simple.
As you are working towards a big goal, review your funds, benefits in 7 to 10 years before achieving the goal. In case if you achieve your goal before your expectations, you must go for debt funds.