I am a 26-year old working professional, earning ₹2 lakh per month. I am new to mutual fund investing. Would you please be able to guide me in how to go about investing in the top mutual funds to build a corpus of ₹12 crore over a horizon of 15 years? What should be my monthly contribution, and in how many funds or which funds should I invest? Finally, if I invest for long term, will I have to pay taxes when I would redeem the final corpus as lump sum?
- Albert Starkk
Your investment plan is extremely ambitious. You will have to invest your entire salary (well, almost) to build a corpus of ₹12 crore in 15 years. You can build that kind of corpus only if you invest around ₹1,77,288 every month and if it grows at 15 per cent for the next 15 years.
You are young, you can try to invest 40-50 per cent of your income every month in stocks for a period of 20 to 25 years to build a sizable corpus. For example, if your investment of ₹1 lakh every month grows at 5 per cent per annum, it will be a little over 15 crore in 20 years.
You can choose two or three top-rated equity-oriented balanced funds or large cap funds to build a corpus over a long period. Balanced funds and large cap funds are the best of options for new investors to invest their money for their long-term goals. Keep track of the performance of the funds every year and weed out consistent underperformers from your portfolio.
Here is a list of our top-rated balanced and large cap funds
Returns from equity investments held over a year are tax free.
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