Building a Corpus

I am 37 years old and plan to create a corpus of Rs 2 crore by the time I turn 55. I can currently invest Rs 6,000-Rs 7,000 a month. Can I achieve my target?
- Raju Muthuswamy

The way to wealth creation is to invest regularly in equity as an asset class through mutual funds. If you invest Rs 7,000 a month for the next 19 years and the investment earns an annualised 15 per cent, you will accumulate a corpus of Rs 77 lakh, which is way below what you desire. To reach your target of Rs 2 crore, you need to invest Rs 27,500 a month in a portfolio of funds that earn an annualised 15 per cent, which is possible.

This article was originally published on February 28, 2011.