ET Wealth
Stock Analysis, IPO, Mutual Funds, Bonds & More

How much money do I need to invest every year to create Rs 1 crore?

If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

ET Online|
Dec 03, 2019, 12.19 PM IST
Getty Images
I am 23 years old. I want to create Rs 1 crore in the next 10 years. I am investing in HDFC life ProGrowth Plus, a unit linked insurance plan (ULIP). I am investing Rs 1 lakh every year. How much money do I need to invest every year to make Rs 1 crore and where?
--Gaurav Sharma

Raghvendra Nath, Managing Director, Ladderup Wealth Management, responds:

An Ulip is basically an insurance-cum-investment product where a part of your money is paid towards insurance premium and a part goes towards investments. For goal-based investments, it is important to segregate your investment goals and insurance goals.

To make Rs 1 crore in 10 years, I would recommend you to invest in equity mutual funds. You have a long investment horizon and equities are known to create wealth over a longer period.

Considering that your Ulip investment grows at 6% per annum, you need to invest Rs 37,000 per month via SIP to reach your target of Rs 1 crore.

You can diversify your portfolio by investing 50% in large cap funds, 30% in mid cap funds, 20% in small cap funds. In the large cap space, you can invest in Nippon India Large Cap Fund and Axis Bluechip Fund. In the mid cap space, you can invest in Kotak Emerging Equity Fund, and in the small cap space, you can invest in HDFC Small Cap Fund.
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links

Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service