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Set Financial Goals

Disciplined planning can help you attain your long-term financial goals

My goal is to save for a retirement corpus of Rs 5 crore in 20 years. Currently, I invest Rs 5,000 in five funds and plan to increase the investments by 10 per cent in each of them annually. I am also investing Rs 70,000 in PPF annually. Do you think I will achieve my retirement goal?
- Aldous

You have made a good start by defining your financial goal as well as selecting a portfolio of good funds. The portfolio is well diversified at the moment with two large-cap and large- and mid-cap funds besides a mid- and small-cap fund. If you can continue to be disciplined with investing regularly via SIPs, which you plan to do, then there is no reason why you cannot achieve your long-term retirement goal. An investment of Rs 25,000 over 20 years in a portfolio earning 12 per cent will accumulate Rs 2.49 crore and the same can earn Rs 5.85 crore at 18 per cent. As you plan to increase your monthly investment of Rs 25,000 by 10 per cent each passing year, you should be able to reach your goal of accumulating Rs 5 crore in twenty years.

However, do make it a point to track the performance of your investments regularly, at least once a year. This will help you evaluate the progress of your investments to introduce any changes if need be. After all, it is not necessary that funds that are good today may continue to be good forever.



Schemes  Category  Star Rating  3-year  5-year
DSPBR Top 100 Equity Large cap ***** 7.29 17.76
Franklin India Bluechip Large cap **** 7.71 15.73
HDFC Top 200 Large & Mid Cap ***** 10.74 18.88
BSL Frontline Equity Plan  Large & Mid Cap ***** 6.91 18.37
Sundaram Select Midcap Mid & Small Cap **** 7.14 16.79
Returns as on February 16, 2011 Ratings as on January 31, 2011


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