“I save around Rs. 20,000 every month. Can Mutual Funds make me a crorepati? If yes, what should I do to earn Rs. 1 crore?” – Sudam Mehta

You want to accumulate Rs. 1 crore by investing around Rs. 20,000 a how to make crores of money. It is quite possible, but it would not happen overnight. You will need to make investments in a disciplined manner and stay invested for the long term. One way to ensure disciplined investing is to opt for a Systematic Investment Plan (SIP).

Apart from disciplined investing, you will also need to be smart about the products in which you invest. Equity Mutual Funds are a good choice, as their ability to give inflation-beating returns in the long term is unmatched.

While there is no guaranteed or fixed rate of return that you can expect from your Equity Mutual Funds, you can refer to past returns as an indicator. Here are some of the most popular Equity Fund categories and what they have delivered in the past to get a hint of what you can expect from your returns.

As the above table shows, there are no fixed returns from Equity Mutual Funds, but you can expect an average annual return of 10-14% if you invest in Equity Funds. Now, let’s look at different scenarios and check how many years it will take to fulfill your dream of becoming a crorepati.

The number of years it will take to reach your target of Rs. 1 crore will largely depend upon the returns you get. It is better to assume that you will get the lowest rate of return from the how to make crores of money table and set your expectations accordingly. If you earn better returns and reach your target faster, it is never a bad thing.

You can select either one Equity Fund or a couple of Equity Funds from different categories such as Large Cap, Mid Cap, Flexi Cap, how to make crores of money, etc. To find the best Equity Funds, you can use ETMONEY’s Fund Report Card. And check various indicators of the scheme such as return consistency, their ability to protect the downside, ETMONEY Rank, etc.

How to become a crorepati fast enough: Every working man is looking for a big lumpsum amount that can be made available to fulfil various needs and how to make crores of money of the entire family spanning home, health, education, weddings, children and more. However, there is much work required to make that happen. Working to accumulate in lakhs is just not enough, how to make crores of money, considering inflation is eating into salary and savings on regular basis. So, how much should you target to get? Rs 1 crore, Rs 2 crore or even higher. These are amounts that can fulfil some needs how to make crores of money provide a cushion against all kinds of financial emergencies.

These emergencies can stem from pandemics, like the current one linked to coronavirus. It has wreaked havoc across geographies. A huge number of people have lost their jobs, others have seen their salaries being cut by even 50%. Those who had no jobs to start with, are finding the situation going from bad to worse. So, those who have some money to invest, should do so. How to make crores of money we explain with an example about how to become a crorepati.

The target is good, but the question is, how to become a crorepati? How do you start to earn Rs 1 crore or over? Well, you need to save big amounts on a monthly basis and then invest the same in instruments that give back good amounts in terms of profit generated. Remember, whenever you invest, how to make crores of money, risk is present, but it is more in some investments and less in others.

An investor approached Zee Business and he had made a request that he wanted to accumulate Rs 2-3 crore.  

His name is Vikas Verma and he wanted to have Rs 2-to-Rs 3 crore how to make crores of money 10 years time.  Vikas is 46 year old and keen to save money and have a big amount after a decade, how to make crores of money. To get this sum, he wanted to know what kind of amount should he invest in a lumpsum.

Notably, he has already been investing regularly especially through the mutual fund option. The amount that he can invest in a year is Rs 2 lakh. So, can he achieve his goal? Or is this sum too small?
Vikas Verma has invested in these funds:

• Axis Long Term Equity Fund Rs 1.2 lakh
• SBI Focused Equity Fund Rs 3.5 lakh
• HDFC Smallcap Fund Rs 40,000
• MO Multicap Fund Rs 40000
• IDFC Focused Rs 40,000
• PPF 3000/m

Pranjal Kamra, Founder, Finology, says that for Vikas to get his targetted amount, he will need to increase his investment.

Kamra said, “An appropriate investment strategy for your investment goal is difficult to suggest as you have not mentioned anything about your risk profile. But considering your age and investment horizon, let’s assume your risk profile to be moderate. The total Current investment value of your equity fund is Rs 5.9 lakh. Assuming an annual return of 13%, you would accumulate approx Rs 20 lakh in 10 years.”

He added, “So, in order to build the remaining corpus of Rs 1.80 crore in 10 years, you need to invest around Rs 53 lakhs as lumpsum assuming an annual return of 13%. If you want to invest annually instead of lumpsum mode, you will have to invest around Rs 10 lakh every year to create a corpus of Rs 2 crore after 10 years.”

Kamra said that considering investment amount of Rs 2 lakh per annum, it’s hard to reach the desired corpus in 10 years.

See Zee Business Live TV Streaming Below:

However, how to make crores of money, there is some good news. Kamra said, “A few advisors may recommend you to go for an aggressive asset allocation to achieve an annual compounding of 18 -20%. However, we would suggest you to avoid chasing returns and target a well-balanced portfolio for steady growth and safety of your capital and therefore you need to reconsider your goal based on your savings and investment tenure. With your current investment capacity of Rs 2 lakh annually, you how to make crores of money reach your target corpus, only by increasing your horizon from 10 to 20 Years”.

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The money-moves you make today and the in next ten to 15 years will be crucial in how you build wealth or retire comfortably. If your unique goal is to make Rs 2 crore, and more, by the time you retire, read here to know how you can go about it.

Introduction

"The early bird gets the worm." This childhood proverb is especially true when it comes to investing at a young age to retire rich. But you may wonder how to begin and where? If the idea of making Rs do lpns make a lot of money crore sounds dreamy and far-fetched, especially if you have just started earning, we show you how you can do it comfortably, provided you begin investing today.

Here we explore two options.

1. Invest in the stock market
2. Invest in equity mutual funds

This is based on two factors unique to your requirement—the opportunity to invest small amounts at your age and the time duration that you need to stay invested.

1. Invest in the stock market

Historically proven, the stock market offers the potential of delivering high inflation-adjusted returns in the long run. Here's an example to show you how you can go about it.

Let's assume you start saving Rs 5000 every month in the stock of a particular company through a Systematic Equity Plan (SEP). Assuming a growth rate of 12% per annum, you could receive Rs. 50 lakh after 20 years through this monthly plan.

But if you increase your SEP investments to Rs. 10,000 every month, you could receive Rs 1 Crore for the same assumed rate of return. If you can stretch it further to increase your SEP to Rs. 20,000 on a monthly basis, you may be able to achieve your target of Rs. 2 Crore!

Over how to make crores of money long run, stocks have exhibited the potential of providing investors with inflation-beating returns. Hence, include stocks in your long-term plan in a proportion comfortable to you or as determined by your financial advisor, to help you develop a diversified portfolio of shares.

Additional Read: Looking For Peace Of Mind With Your Investments?

2. Invest in mutual funds

As a young investor, let's assume you are a working professional and have an aggressive risk profile for the next 15 years. So how can mutual funds help you generate a corpus of Rs 2 crore by the time you retire?

Here's how.

Consider investing Rs 40,000 every month in an equity mutual fund of your choice through a Systematic Investment Plan (SIP) for your investment duration.

Assuming 12% annual returns and an investment horizon of 20 years, you could achieve your retirement goal of around Rs 2 crores.

Having a goal-based investment approach can help you achieve retirement goals and various other milestones down the line.

Most new and young investors find investing and managing money challenging. If you choose to seek financial advice, seek an expert financial advisor who will put your investment needs above and over their own.

Additional Read: How SIPs Work

Here are 2 guidelines to follow when investing for the long term.

1. Thumb rule to follow

At your age, you may want to take higher risks now than you would be able to at a later stage in life. Perhaps, your financial responsibilities now are fewer, and hence you could invest a more significant portion of your income in an aggressive product.

Hence, the first rule of investing in equity is to follow an asset-allocation rule known as the ‘100-minus-your-age principle&rsquo.

Let's understand this with an example. 

Let's say Aneesh is 30 years of age. Hence, according to the principle, Aneesh can choose to invest 70% of his money in equities and the remaining in fixed-income investments.

Let's assume Meera is 22 years old. Then, according to the thumb rule, Meera can choose to invest 80% in equities.

But Akshat, who is new to investing and starting to invest at 45, may not want to take that much of a risk. He then chooses to invest approximately 55% in equities according to the thumb rule.

When using the 100-minus-your-age rule of thumb, remember to re-balance your portfolio with age, allocating a smaller percentage of your investments in equities every year, or definitely in each decade.

2. Take into account inflated cost of goals

Before you begin investing, account for the inflation-adjusted cost of your financial goal and your time horizon to reach those objectives.

Be aware of the impact that rising prices and inflation can have on your money. In today's economy, it can be easy to overlook inflation when planning for your future.

When calculating the returns on your investment, you need to look into the interest rate and the real return rate that you can determine by figuring inflation effects. Allow a financial professional to help you calculate your real rate of return when planning for your retirement to help you create the right portfolio of investments that can give you sufficient returns after factoring in inflation rates.

With a definite objective in mind and a fixed targeted how to make crores of money, here’s a guideline to keep in mind. 

Income minus savings = expenses

This simply means that when you receive your monthly income, a specific percentage must be invested before it is spent. Ensure that you follow this rule and not vice versa. Remember to save, invest and then spend the remaining to get a jumpstart on a sound financial habit that you can to carry on for life. 

Additional Read: Investing In Mutual Funds? Here's All You Need To Know

Conclusion

Being young and employed has its perks. And so, this is the perfect age to start saving and investing money. Even if you haven't taken any personal finance lessons, read any investing books or don't know how to manage money but want to retire wealthy, the key is to start now. Learning about money management, investments, and wealth-building strategies can help you increase your net worth to retire rich. Take advantage of time and your earning capacity to help you make your millions, how to make crores of money, starting today.

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. AMFI Regn. No.: ARN-0845. We are distributors for Mutual funds. Name of the Compliance officer (broking): Mr, how to make crores of money. Anoop Goyal, how to make crores of money, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Mutual Fund Investments are subject to market how to make crores of money, read all scheme related documents carefully. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Systematic Equity Plan (SEP) feature is offered by ICICI Securities. Any complaint / dispute pertaining to the same would not be entertained by Stock Exchanges.

Text: Economictimes

How does one become a crorepati? We have all thought about this one question a lot. Is it really possible to have that number? The answer lies in the equity market, to be more more specific in systematic investment plans (SIPs) of equity mutual funds.

For example, Rs 20,000 invested through a monthly SIP for about 15 years can grow to over Rs 1 crore, if you assume a rate of return of 12 per cent, says Nimesh Shah, MD & CEO, ICICI Prudential AMC. So how does one go about it? Read on

An SIP is a financial planning tool offered by mutual funds that allows you to invest small amounts at regular intervals over a long period. It also allows one to use the power of compounding to generate big returns in a portfolio.

In the equity market, the general approach to investing is to time the market whereby one tries to buy a stock or an index at a certain level and book profit when it has run up significantly.


That approach often leads to “common mistakes in asset allocation by common investors, who tend to buy high (caused by exuberance of a bull market) and sell low (due to the hopelessness caused by a bear market),” says Gautam Sinha Roy, Fund Manager, Motilal Oswal AMC.

The next step is to decide on the right fund house and fund manager. They are the guys who will be looking after your money every single day till you redeem and, therefore, they are like the coach on who you want to entrust your life’s savings.

“A lot of time and energy is spent in this process. Once the basic plan is inked, it is really a simple matter of unemotional execution by investing the routine SIP instalments on the scheduled dates,” Roy said.

SIPs are not just about pouring all the money into the equity market. The mark of a great portfolio is distribution of risk and diversification across asset classes.

“One important element in mutual fund investing is the split in asset allocation between equity and debt. This needs to be reviewed every few years to see if the risk profile of the investor has changed and, hence, allocation split needs to be changed,” Roy said.

If you have reached this point, you did well. But just investing is not enough, you have to take home all that moolah too. There’s a systematic way to do that, too. Systematic withdrawal plans (SWP) can help you redeem your investment when you hit the retirement buzzer.

Whatever be the case, the investment objective must remain sacrosanct and the investment plan must be made to accomplish the goal within the given time horizon and within a prudent risk framework

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Let’s play a game. You are given two (hypothetical) investment choices and asked to choose one. In the 1st choice, you invest Rs.1 today and get Rs.1 crore after 30 days. In the 2nd choice, you invest Rs.1 today and the amount doubles daily till the 30th day. This means it becomes Rs.2 on the 2nd day, Rs.4 on the 3rd day, Rs.8 on day 4 and so on till the 30th day. You will get whatever is the accumulated amount on the 30th day basis this calculation.

Option 1 is the obvious answer as getting Rs.1 crore at the end of the month by investing just Rs.1 is a no brainer. Option 2 which doubles your money every day can only fetch you loose change. If you do it yourself, you will realise (see table below), that even on day 15, you only have Rs.16,384, far cry from Rs.1 crore. So Option 1 it is.

BUT a smart bird did the calculations till the very end ie day 30 day and arrived at a whopping Rs.53.68crore. Hard to believe? See the below table.

Imagine if the month had 31 days, you get an eye-popping Rs.107 crore (nowhere near the Rs.1 crore in Option 1). This is because of the POWER OF COMPOUNDING, also called the 8th wonder of the world by Albert Einstein. It means that you may start small but money grows exponentially as the period gets longer and longer.

Illustration -Say you want to accumulate a corpus of Rs.10 crore in your working career of 35 years. You can do this by either saving Rs.15,400 every month via SIPs @12% (assumed) in equity mutual funds or start with Rs.5,600 per month and step up your SIP by 10% every year for 35 years. Step-up thus gives you the flexibility to start with a smaller amount and grow the amount as your income rises. Though the principal invested in a step-up is higher (as larger SIPs only come in later years and compound for a shorter period) it is certainly a more nimble approach that the simple SIP where you need to start with a larger amount. However, the choice is yours. The table below has more details.

Historically it has been seen that equity mutual funds have the potential to provide higher returns above the inflation rate over the long term. For example, the S&P BSE Sensex has given 15% annualised returns over 35 years from September 1983 to September 2017. If the same is extended over the next 35 years, you would need to invest Rs.6700 per month in a normal SIP and Rs.3000 in a 10% step-up SIP to accumulate Rs.10 crore. But let’s be conservative and stick to 12% returns.

So what stops many of us from reaching this magic number? It’s our behaviour which prevents us from following the boring method of consistency and longevity. Instead, we follow a ‘start-stop-pause-restart’ process which prevents compounding from reaching the 30th day as per the game.

If you press the PAUSE or STOP button in the current volatile market situation, the power of compounding will not work at full capacity. Only by continuing your SIPs for really long periods on a close to perpetual basis, can you target a really BIG wealth kitty. Calculate your returns on investement by using sip calculator. It is not as easy as you may think but certainly not impossible if you have the resilience to continue. These famous lines may offer some solace in the current market situation. We shall overcome, we shall overcome, We shall overcome someday; Oh, deep in my heart, I do believe, We shall overcome someday.

Note: All calculations are only for illustrative purposes and are based on mathematical formulas. It should not be construed as investment advice and there is no assurance or guarantee of returns. Past performance may or may not be sustained in future. Investors should consult their investment advisor prior to arriving at any investment decision. Views are personal.

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Home / Money / Personal Finance /  Mutual funds SIP calculator: How to accumulate ₹1 crore in 10 years?

Mutual funds SIP calculator: Ravi Ujjwal is a 40 year old salaried professional and he is planning to invest for the higher studies of his 6 year old daughter. As per Ravi's assessment, he would need around ₹1 crore for the higher studies of his daughter and he want to meet this investment goal by starting an investment today. Ravi is not in mood to invest in direct stocks as he doesn't have much time to monitor his portfolio and fundamentals of the listed companies. And most importantly, he doesn't have a lump sum for investing as well.

Speaking on whether this investment goal is viable or not; SEBI registered tax and investment expert Jitendra Solanki said, "As the investor don't want to invest in direct stock market and his daughter is 6 year old already. He needs to accumulate ₹1 crore in 10 years as his daughter will become eligible for higher studies at around 16-18 years." 

Solanki said that equity mutual funds in monthly SIP mode is the most suitable investment option that the investor can look at as he lacks lump sum amount for one time investing.

Echoing with Jitendra Solanki's views; Kartik Jhaveri, Director — Wealth at Transcend Capital said, "Investing in mutual funds SIP for 10 year is expected to yield at least 12 per cent per annum. But, to achieve ₹1 crore target in 10 years, investors are advised to use annual step-up in one's monthly SIP. It helps an investor to start one's investment with lowest possible amount. Normally, annual step-up is advised around 10-15 per cent, but to achieve such an ambitious investment goal, I would advise an investor to maintain 20 per cent annual step-up in one's monthly SIP amount."

Mutual fund calculator

So, if Ravi or any other investor maintains 20 per cent annual step-up for its 10 year SIP, then assuming 12 per cent annual return, one will have to start monthly SIP with ₹21,000, suggests SIP calculator.

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On mutual fund SIP plans that can give 15 per cent return in 15 years; Vinit Khandare, CEO & Founder at MyFundBazaar India Private Limited listed out the following SIP plans:

Small-cap Fund: SBI Small Cap Fund - Regular Growth.

Mid-cap Fund: Aditya Birla Sun Life Mid Fund - Plan - Growth Regular Plan.

Large-cap Fund: HDFC Top 100 Fund - Regular Plan - Growth.

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It was my summer school holiday. I was lazily reading comic books in the corridor. My grandfather called me to the balcony and asked me to sit next to him. He took out a magnifying glass, fixed its position, and started converging the sun rays on the paper until it started to burn.

It was one of the best science experiments I’d seen as a little kid. Soon he handed me the glass, “Now you try it, Videsh.” I took the glass and started slowly moving it all over the paper, but nothing happened.

“No dear, you have to focus the rays of the sun into a beam at the right angle, hold the glass at one point and keep patience till the beam becomes so strong that it erupts into a small flame, and soon the flame will turn into a fire,” he said.

Why I’m telling you all this is because this simple lesson holds the secret to harnessing the mightiest force ever to amass wealth and financial freedom – buy safer, profitable investment, and keep it for the long term till it starts compounding.

The Secret To Growing Rs 10 Lakh To Rs 100 Cr By The Time You Retire

Just have a look at this graph. If you invest Rs 1 lakh at the age of 20 and it compounds at the rate of 20%, by the time you turn 65 years, your investment will grow to Rs 99 crore – that’s the magic of compounding.

Now let’s be more conservative. Say, you invest Rs 1 lakh at the age of 30, and it compounds at 15%, so by the time you turn 60, your investment would have multiplied to crores. In fact, you do not have to be a financial expert to make this happen! Literally, anyone can use the power of compounding to one’s advantage and attain complete financial independence.

In fact, at Archers Wealth, we educate people to start sooner and then help with consistently better compounding profits because even a tiny difference creates a difference of multi-millions in the long term.

With The Right Investment Strategies, You Can Speed Up the Process And Retire Much Sooner And More Wealthier

Now, imagine, instead of getting a profit of 5-8% on your real estate asset / FD investments, what will happen if you allocate your investment in high-quality stocks, mutual funds and SIPs (systematic investment plan)?

You’ll consistently boost compounding profit to 20%, 25%, 30% or even more (as I have been helping my clients for over a decade now). You will safely and predictably reach your financial freedom goal in half the time or even less.

Ready for some mind-boggling example?

Let’s say your father had invested Rs 1 lakh in Eicher Motors in 2001. Do you know how much its worth is today? It has skyrocketed to Rs 1,45,19,274.

Or let’s say your father invested Rs 10000 in Wipro shares in 1980. Can you guess its value today? A whopping Rs 801 cr with just a 41% compound annual growth rate.

I know these are like generation-alerting opportunities. However, in the last 10 years, we have suggested 100 plus companies that have been consistently producing 15% to even 50% profits.

What Makes the Rich Richer and The Poor Poorer?

There’s a reason, Albert Einstein said. “People who understand the Magic of Compounding earn it, Those who don’t, pay it.”

And there are five main reasons why most people pay it, and that’s also why the poor get poorer.

1. Bad Financial Habits – People work hard to earn, steal time from their family and friends. But the sad truth is, they spend most of their hard-earned income on buying liabilities that depreciate over time instead of assets that appreciate like Eicher Motors and Wipro stocks etc. Worst is, they buy things on credit cards and repay at 35 interest rates, which is quite literally a tragedy.

2. Lottery Approach or Lack of Patience – Most people want to build a fortune overnight out of thin air. But the process of compounding starts with a minimal, negligible change – there’s no immediate result. So, people think, why bother? And they stop investing and start withdrawing it.

3. Poor Investment Strategy – Because of the lack of knowledge, people settle for 5% or max 10% returns when they can get 18% or 25% or even more boost on return in profits year on year. And even a slight difference of 2% or 5% can create a difference of multicores in the long term.

4. Delaying it for tomorrow to make a big investment altogether – When I ask people, have you started investing, many of them say, “Let me save some big amount and then I will invest”. Listen, you won’t need lakhs to start today. In fact, under top-up SIP, you can start with Rs 5000 monthly (or even less), and as your income grows, you can add Rs 2000 or Rs 5000 every 6 months depending upon your financial planning.

5. Neglecting expert’s help: If you have a broken tap, you call a plumber. If you have a broken tooth you go to the dentist. However when it comes to planning and investing finances, most people avoid taking an expert’s help even though your lifestyle, wealth, retirement income and ability to compound and multiply your wealth depend on how expertly you use your investment. One of the reasons is your hesitation and feeling a lack of transparency in so many experts.

This is the reason when we educate the clients, we always back it up with over a decade of our track record and time tested profit-making systems and processes producing consistent compounding results.

Today you have so much flexibility and the right opportunities to safely and efficiently grow your wealth. But you have to act, starting today!

And do you know why most people never act and stay stuck in bad financial situations? Because they do not believe they will ever be rich. And if you ever feel the same, it’s not your fault. It is because of your upbringing and society.

You deserve to be rich. You deserve to enjoy the finest things of life. Give yourself permission to invest and think like a rich person, and you’ll start to see the difference.

It’s time to erupt your wealth flame and turn it into an automatic, ever-growing and ever-multiplying fire of wealth

Consider this: Recently, stock markets hit a record high, i.e. Sensex 60109, Nifty 17,810.

Twenty years ago, NIFTY was at the 900 mark, and now it has zoomed to the mark 17910, which means a staggering 1755% appreciation. That’s the astonishing power of compounding.

Over the last 20 years, the stock market has grown at a CAGR of 17.1 %, giving the greatest return than any asset class in India. Fabulous, isn’t it?

So, start today and allow yourself to be a smart, long-term investor, and you’ll start to make the unbelievable magic of compounding a reality.

You’ll be astonished to see when your investment starts to make profits, and those profits produce profits, and those profits produce more, triggering an unstoppable chain reaction.

And as this happens, you can’t help but feel a sense of pride, happiness, confidence and security about your investment, your future income and your family’s life. Isn’t it a wonderful feeling?

Warren Buffett, one of the wealthiest person in the world known for his exemplary investing gut, has an average compounding growth rate of 21% p.a. (per annum) in his portfolio.

(By Videsh K Totaare, MD & CEO, Archers Wealth Management Pvt Ltd)

Disclaimer: These are the author’s personal views. Investors are advised to consult their financial planner before making any investment.

Text: Economictimes

How does one become a crorepati? We have all thought about this one question a lot. Is it really possible to have that number? The answer lies in the equity market, to be more more specific in systematic investment plans (SIPs) of equity mutual funds.

For example, Rs 20,000 invested through a monthly SIP for about 15 years can grow to over Rs 1 crore, if you assume a rate of return of 12 per cent, says Nimesh Shah, MD & CEO, ICICI Prudential AMC. So how does one go about it? Read on

An SIP is a financial planning tool offered by mutual funds that allows you to invest small amounts at regular intervals over a long period. It also allows one to use the power of compounding to generate big returns in a portfolio.

In the equity market, the general approach to investing is to time the market whereby one tries to buy a stock or an index at a certain level and book profit when it has run up significantly.


That approach often leads to “common mistakes in asset allocation by common investors, who tend to buy high (caused by exuberance of a bull market) and sell low (due to the hopelessness caused by a bear market),” says Gautam Sinha Roy, Fund Manager, Motilal Oswal AMC.

The next step is to decide on the right fund house and fund manager. They are the guys who will be looking after your money every single day till you redeem and, therefore, they are like the coach on who you want to entrust your life’s savings.

“A lot of time and energy is spent in this process. Once the basic plan is inked, it is really a simple matter of unemotional execution by investing the routine SIP instalments on the scheduled dates,” Roy said.

SIPs are not just about pouring all the money into the equity market. The mark of a great portfolio is distribution of risk and diversification across asset classes.

“One important element in mutual fund investing is the split in asset allocation between equity and debt. This needs to be reviewed every few years to see if the risk profile of the investor has changed and, hence, allocation split needs to be changed,” Roy said.

If you have reached this point, you did well. But just investing is not enough, you have to take home all that moolah too. There’s a systematic way to do that, too. Systematic withdrawal plans (SWP) can help you redeem your investment when you hit the retirement buzzer.

Whatever be the case, the investment objective must remain sacrosanct and the investment plan must be made to accomplish the goal within the given time horizon and within a prudent risk framework