Widely read:
I am 43 years old. I have saved some money in fixed deposits. But I am not active in mutual funds. I would like to know how much should I save every month to build a corpus of ₹2 crore by the time I am 60 years old.
- Shaikh Ibrahim
You have to invest ₹40,000 every month for the next 15 years to build a corpus of ₹2 crore. We have assumed that your investment would earn 12 per cent interest per year. We normally ask investors to shift the money from stocks at least a year or two before the goal to ensure that their plans are not spoiled by a volatile stock market. That is why we have considered an investment period of only 15 years, not 17 years.
Having said that you must try to differentiate between savings and investments. If you park your entire savings in fixed deposit, you will not succeed in building a large corpus. That is why you should start goal-based investing to achieve your various goals. Always park money in safe avenues like bank deposits, debt mutual funds, etc to meet your short-term goals that are between a few months to five years. If you goals are five years away or more, you should invest in equity mutual funds. Equity has the potential to offer superior returns than other investments. Equity will help you meet your long-term goals without much trouble.
For more information, read: First things...
This article was originally published on February 16, 2016.
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