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Calculating Earnings

Taking a conservative look at the returns that a portfolio can earn will give you an idea of how much to invest…

I want to invest Rs 15,000 per month for the next 5 years to build a corpus of Rs 25 lakh. Will Rs 15,000 monthly investment be sufficient to achieve this goal?- Karthik S

A portfolio earning annualised 12 per cent will grow to Rs 12.37 lakh in five years if one regularly invests Rs 15,000 every month. The same portfolio will accumulate Rs 13.45 lakh if the portfolio earns 15 per cent annualised returns. Though these return expectations may seem to be conservative, they give a fair idea on how much you need to invest to reach your goal. For instance Rs 18,200 monthly investment will build a corpus of Rs 25 lakh in five years if it earns an annualised 12 per cent. You should either increase your investments or consider investing in a very aggressive portfolio of funds.



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