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Do you have mutual fund queries?
Please ask your questions here and rediffGURU Dev Ashish, founder, StableInvestor (external link), will answer them.
Anonymous: I am 28 years old unmarried currently holding salary of 64000 & investing 2000 in less & 500 in small cap fund. How much more investment required to secure future and generate a corpus of 4cr till 2044?
For a target of Rs 4 Crore in the next 20 years, you need to invest about Rs 30-38,000 monthly assuming average returns of 10-12% per annum and that you will be able to increase your monthly investments by at least 5% each year in line with income/salary growth.
So given that you are investing about Rs 2500 in mutual funds each month right now, you will have to significantly increase this monthly contribution amount if you want to reach your target corpus.
We don't have information about your risk appetite. But assuming that it is at least moderately aggressive, then, you can start investing in a combination of largecap index funds, flexicap/large&midcap funds, midcap funds, etc.
Om: Hello Sir, My aim to generate 25L in next 5 years thru Mutual funds and have started 5 SIP of 3000 each in these funds
1. Axis Bluechip Fund (Direct Growth)
2. Nippon India Large Cap (Direct Growth)
3. HDFC Small Cap (Direct Growth)
4. Parag Parikh Flexi Cap (Direct Growth)
5. Canara Robecco ELSS tax saver (Direct Growth)
Please advise whether these funds are enough to generate the required corpus or I need to invest more?
For a target of Rs 25 lakh in the next 5 years, you need to invest about Rs 25-31,000 monthly assuming average returns of 10-12% per annum.
Right now you are doing Rs 15,000 monthly across 5 funds (with 3K SIP). So unless the returns generated by your funds are a lot more than 10-12% per annum, it will be difficult to reach the target amount.
So you should try and invest as close as possible to the calculated amount of Rs 25-31,000 monthly. And assuming a reasonable salary growth and controlled expenses, you should try to increase the monthly investments each year in line with your income growth.
Virang: I need to invest 60-70 lakh to get return of 50-60% by next year. Which mode of investment do I make to achieve target?
A return expectation of 50-60% in 1 year is unreasonable and unrealistic to believe in. Given the short investment horizon, the best-suited asset class is debt. That said, the equity asset class has historically delivered 10-12% average annual returns in the long term (5+ years).
So you need to rationalise your return expectations.
Anonymous: Sir I'm 25 years old and I want my dream car Mercedes cost 75 lakh in 10 years my monthly salary is 2 lakh
While I can try to give some 'gyaan' about a luxury car being a depreciating asset and why you should instead focus on saving for buying real appreciating assets or investments, I will not do that here and instead, just try to answer your question mathematically ;-).
A car that costs Rs 75 lakh today will cost much higher due to inflation after 10 years. Assuming 6% average inflation over the next 10 years, the cost of the car you mentioned will increase to Rs 1.34 crore. To reach this corpus target, if you invest in an equity-oriented portfolio that generates about 11%, then you need to start investing Rs 46-47,000 monthly starting today and also increase this monthly investment by at least 7% each year (with your salary hikes).
With the current monthly take-home of Rs 2 lakh, this shouldn't be a problem with you.
That said, I would once again mention the fact that right now you are young and hence, you have this cool goal. My guess is that as years pass, you will understand the reason why spending too much on a depreciating asset like a car isn't advisable :-).
We don't have information about your risk appetite. But assuming that it is at least moderately aggressive, then, you can start investing in a combination of largecap index funds, flexicap/large&midcap funds, midcap funds, etc.
Mahendra: Hi, I have a Real Estate Property @ 1.35 cr in other city whereas I stay in a house worth Rs 80 Lakh in other city and I also have Equity n MF worth Rs 1 cr and I am getting Rent from Such Property @ Rs 35,000 and no other income other than this. MY QUESTION IS WHETHER buying a new property worth Rs 3.5 cr is a right decision or opine your expertise on my Finance?
To answer your question, sufficient information isn't provided. We still don't know what other goals you have that need funding. Also, purchasing Rs 3.5 cr will require you to take a loan for which you will have a big EMI to service. Your only income is Rs 35,000 monthly which would be used for regular expenses. It is also not known whether you plan to sell your existing properties to fund new property purchase or not.
So it seems that the decision to purchase a new property doesn't seem the right one based on the limited details that you have shared.
Anonymous: Hello, I am 45 and having 3 kid's with age 17, 10 and 6 and earn 3 lakh per month and have 8 lakh home loan. I would like to build a corpus of Rs 2 cr plus in next 12 years. Please advice.
Your goal is Rs 2 Cr in the next 12 years. At that point, you will be aged 57 and your kids will be 29, 22 and 18 years old. So from the life stage perspective, it seems that the goal is about saving for retirement and the youngest kid's higher education (aged 18 then). Saying this as by then oldest and middle kid would have completed their education.
No details of the existing assets have been provided so we will assume that you need to save up Rs 2 Cr in 12 years from scratch.
For this, you will have to start investing at least Rs 52,000 per month starting today and increase the monthly investments by at least 7% each year for the next 12 years (assuming a similar increase in salary). This is assuming a 75:25 Equity:Debt allocation. The good part is that at a monthly income of Rs 3 lakh, doing Rs 52,000 monthly should be fairly comfortable if you aren't already doing it.
We don't have information about your risk appetite. But assuming that it is at least moderately aggressive, then, you can start investing in a combination of largecap index funds, flexicap funds, midcap funds.
rediffGURU Dev Ashish's personal disclaimer: As a SEBI RIA, I cannot comment on specific schemes/funds that are provided or asked for in the questions in the platform. The views expressed above should not be considered professional investment advice or advertisement or otherwise. No specific product/service recommendations have been made and the answers here are for general educational purposes only. The readers are requested to take into consideration all the risk factors including their financial condition, suitability to risk-return profile and the like and take professional investment advice before investing.
General disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.
Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.