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This is not clickbait. If you consistently invest Rs 25,000 every month for a few years, becoming a millionaire can be a reality.
Here's where you can invest:
| Flexi-cap fund | Mid-cap fund | Small-cap fund |
|---|---|---|
| Allocate 70 per cent of your money here | Allocate 20 per cent of your money here | Allocate 10 per cent of your money here |
| Why flexi-cap fund | Why mid-cap fund | Why small-cap fund |
| About 55-80 per cent of their portfolio is in large-cap funds, reducing volatility while still delivering steady growth | They invest in companies poised for expansion, showing growth potential | They are the high-risk, high-reward component of the portfolio |
| They have the freedom to pick across large-, mid- and small-cap stocks, ensuring a well-diversified portfolio | Historically, they have beaten large-cap funds' 10-year returns. As of December 12, 2024, they have annually grown at around 18 per cent in the last 10 years, against large-cap funds' 13 per cent. | They showed around 19 per cent annualised growth in the last 10 years, as of December 12, 2024, but with significant short-term volatility. So, put only 10 per cent money into them to avoid stress. |
The risk-return balance
This 70-20-10 allocation aligns with most investors' comfort levels. It positions your portfolio to perform well in both bull and bear markets.
How much money will your portfolio make?
Using historical averages of regular flexi-cap , mid-cap and small-cap fund plans, here's how a Rs 25,000 SIP could have grown:
| Horizon | Corpus |
|---|---|
| 5 years | Rs 27 lakh |
| 10 years | Rs 73 lakh |
| 15 years | Rs 1.69 crore |
What's more, the longer you stay invested in the 70-20-10 plan, the lower the likelihood of experiencing negative returns:
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3 years: Positive returns in 92 per cent of periods.
-
5 years: Positive returns in 99 per cent of periods.
- 7 years: 100 per cent probability of positive returns.
Millionaire plan: Keep it simple
Investing doesn't need to be complicated. This simple 70-20-10 approach provides a balance of stability and growth, making it easy for anyone to implement and stick to. By investing only long-term money and staying consistent, you can achieve financial independence without unnecessary stress or complexity.
Start your SIP today and let patience, simplicity, and compounding work their magic. Want to know about the best flexi-cap, mid-cap and small-cap funds to invest in? Check out our analyst-recommended list on Value Research Fund Advisor.
Also read: How compounding can make you a millionaire
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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