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Investing For Future
I am 38 years old now and I want to have 1 core when I turn 50 years old. What kind of investment should I start to get that amount?
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1 Reply
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If you want to accumulate a corpus of 1 crore by 50, you have a window of 12 years. Aside from these contributions, what also matters here is the risk appetite, the type of investments made, and the final investment amount. The details may unfold as strategies in the following ways.
Systematic Investment Plan (SIP) in Mutual Funds
Equity Mutual Funds: On average, patients who have invested in these funds have been able to generate annualized returns of about 10-12 percent in the long run.
SIP Calculation: Considering a 12-year investment time and a target amount of 1 crore, you can achieve this by investing approximately 30,000 monthly, assuming you earn 12% annual returns.
Equity Investments (Stocks)
If your risk appetite is higher than the average, then making a direct investment in reputable companies or spreading your money across many stocks would give you better returns.
Investing directly into stock markets and building portfolios of stocks and shares requires monitoring and analysis, but on average, achieving annual gains of between 12 and 15 percent is realistic, allowing you to meet your financial goal.
Public Provident Fund (PPF) and Fixed Deposits
You can invest in PPFs and FDs, but these reap lower returns than expected, around 7-8%. So, if you want to keep some of your investments in low-risk loans, these can be A types.
Partial Allocation: You can put about 20-30% of your savings and then leave the rest in equities or mutual funds.
Balanced or Hybrid Mutual Funds
These funds combine debt with equity to produce moderate risks and returns (around 10%). If you are looking for a more stable option, these could suit you. However, their returns will likely be a bit less than pure equity funds.
Example Investment Distribution
70% in Equity Mutual Funds or Stocks: In search of higher returns.
30% in Safer Options (PPF or Bonds): For cushioning and adding less risk.