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Mutual fund calculator: Monthly SIP you need to get 10-Cr at 50 years of age

Mutual fund calculator: To meet this highly ambitious  ₹10 crore target at the age of 50, the investor is advised to follow 15 per cent annual step-up in monthly SIP instead of conventional 10 per cent annual step-up, say experts. (REUTERS)Premium
Mutual fund calculator: To meet this highly ambitious 10 crore target at the age of 50, the investor is advised to follow 15 per cent annual step-up in monthly SIP instead of conventional 10 per cent annual step-up, say experts. (REUTERS)

  • Mutual fund calculator: Generally, a 25 year period is favourable for investors investing into equity mutual funds considering archival data negates the risk of principal, say tax and investment exerts

Mutual fund calculator: SIP or Systematic Investment Plan aka mutual fund SIP is one of the most attractive investment options for the earning individuals who are in the nascent phase of one's career. Best part of this mutual fund investment is its ability to develop ocean from the ice tips. With small monthly investments, one can go on to develop whopping amount in the long term. As per the mutual fund return calculator, this becomes possible because the investor gets compounding benefit (interest on interest) in long-term in such mutual fund schemes. According to tax and investment experts, if an investor is clear about one's investment goal, then mutual fund SIP calculator is the first search that he or she should do. It will help them know how much SIP would be enough to meet their investment goal. Once, they are clear about their monthly SIP and the investment goal, and then they need to find out the mutual fund scheme that will enable them get the assumed return over the investment period.

Mutual fund SIP calculator: How to meet 10-Cr investment goal

Asked about the mutual fund SIP investment strategy if an investor wants 10 crore when it become 50 year old; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "To get 10 crore at the age of 50 is an ambitious target and for that the investor has to start investment as early as possible say at 25 years of age. Since, the investor won't have lump sum amount for investing at that time, the investor is advised to choose mutual fund SIP. Here, my advice to the investor is to maintain step-up SIP investment where one's monthly SIP goes up in sync with one's annual income growth. However, to meet this highly ambitious 10 crore target at the age of 50, the investor is advised to follow 15 per cent annual step-up in monthly SIP instead of conventional 10 per cent annual step-up."

Kartik Jhaveri of Transcend Consultants said that the investor should choose equity mutual fund as it will help him maximize return on one's money by garnering at least 12 per cent return during the investment period.

On what kind of mutual fund SIP is suitable for achieving 10 crore investment goal at the age of 50; Vinit Khandare, CEO & Founder at MyFundBazaar said, "Generally, a 25 year period is favourable for investors investing into equity mutual funds considering archival data negates the risk of principal. Moreover, it will outperform any asset class in the financial industry & should be the primary financial asset to create investors’ wealth."

Highlighting the risk appetite of the investor; Vinit Khandare of MyFundBazaar said, "Depending on the risk-taking capacity of the investor, there are three approaches - conservative investors can opt for simple Index Funds, which have low expense ratio & will mirror the index ; for the little more moderate investor, they can go for multi-cap ; aggressive investors can choose flexi-cap or recategorised flexi cap funds that give complete freedom to the fund managers in order to create alpha higher than the vanilla Index Funds & Multi-Cap Funds."

Mutual fund return calculator

Assuming 12 per cent return on one's monthly SIP for 25 years, the mutual fund calculator suggests that one would need to start with 15,000 monthly SIP with 15 per cent annual-step up strategy to meet one's 10 crore investment target when it turns 50 years of age. As per the mutual fund SIP calculator, one will get 10.19 crore maturity amount at the age of 50 years, if the investor follows the above-mentioned mutual fund SIP investment strategy.

Photo: Courtesy piggy mutual fund SIP calculator
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Photo: Courtesy piggy mutual fund SIP calculator

Mutual fund schemes to meet this investment target

Asked about the mutual fund plans that will help an investor meet its investment goal of 10 crore through monthly SIP; Vinit Khandare of MyFundBazaar listed out the following mutual fund SIP schemes:

Flexi Cap Funds

HDFC Flexi Cap Fund (Inception 1995); CAGR - 18.76%

Aditya Birla Flexi Cap Fund (Inception 1998); CAGR - 22.73%

Multi-Cap Funds

ICICI Multi Cap Fund (Inception 2001); CAGR - 20.73%

Index Funds

SBI Nifty Index Fund (Inception 2002); CAGR - 14.47%

The expert maintained that the recommendations mentioned-above are based on the historical data available in regard to the mutual fund SIP plans.

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