How should I invest to generate a corpus of ₹1.5 cr in 25 yrs?

I’m a 33-year-old IT professional. Currently, I have a home loan with an outstanding of ₹11 lakh. I don’t have much of an investment in any instrument apart from a Sukanya Samridhi account for my daughter and a couple of fixed deposits amounting to ₹8 lakh. Can you please suggest good financial investments I can consider so as to have a retirement corpus of ₹1.5 crore and also a corpus of ₹60 lakh in next 5-6 years? My monthly income is approximately ₹1 lakh and my house loan EMI is ₹26,000.

—Anu

Both your goals need careful understanding and planning.

First, let’s take your retirement goal. You have mentioned that the corpus you are looking for is ₹1.5 crore. However, as a young person with probably 25+ years to go to retirement, you need to factor in inflation to truly determine the corpus you would need to invest for. So, if you meant ₹1.5 crore in today’s value, the same would be worth less than ₹40 lakh in 25 years’ time.

On the other hand, if you want the equivalent of ₹1.5 crore in today’s value 25 years hence, you would need to shoot for close to ₹6.5 crore. Given the length of investment time frame you have (25+ years), it is not too difficult to achieve.

Assuming a 12% long-term annual return, you can achieve this lofty goal by investing around ₹35,000 a month over this period.

And, if you factor in your PF savings and any other sources for retirement funding that you may have, this amount will further reduce to present a feasible investment schedule given your salary and expenses.

On the other hand, your second goal looks quite difficult, unfortunately. Given the much shorter time frame for this goal, the corpus of ₹60 lakh would require a monthly investment of ₹58,000 over this period. And this might be difficult to pull off given your financial cash flow situation. So, for this goal, you would need to moderate your goal amount or extend your time frame accordingly.

Srikanth Meenakshi is founder, Primeinvestor.in.