A must-do list for Investors | Value Research We want you to do well financially no matter what is happening around you

A must-do list for Investors

We want you to do well financially no matter what is happening around you


With the RBI in a pause mode, the debt funds not doing too well currently and real estate and gold in the unpredictable zone followed by a correction in the equity markets it is very likely that investors are baffled and confused. But this is the right time to pull up your socks and remind yourself of the core investment wisdom so that you do well financially no matter what is happening around you.

Here is a ten-point must-do list for you to keep your wealth-creation plans on track.

Step up your SIPs
Still sticking to SIPs of Rs 5,000 a month in the hope of getting to a Rs 1 crore corpus by retirement? Well, you need to revise both the SIPs and your investment goal upwards.

Let's assume that you can live handsomely on a Rs 1 crore retirement kitty at today's prices. If you are in your mid-twenties and have 35 years left for retirement, you will need Rs 7.7 crore by the time you turn 60 to maintain the same lifestyle, adjusting Rs 1 crore for a 6 per cent inflation rate. For a mid-thirties investor, Rs 1 crore of today will be the equivalent of Rs 4.3 crore at retirement. And if you are in your forties, you will need Rs 3.2 crore at 60. In short, inflation turns your financial goals into moving targets.

To hit bull's eye, your savings and investments need to keep up with inflation, hence the need to step up your SIPs.

Consider a 40-year old investor who has SIPs of Rs 15,000 a month in large-cap equity funds. If he sticks to the same old SIPs until retirement, ignoring his pay increases as well as inflation, he will get to about Rs 1.97 crore. But stepping up his SIPs by just Rs 1,500 every year will get him to Rs 3.03 crore, a 54 per cent addition to the retirement kitty!

By how much should you step up your SIP? It would be ideal to peg it to expected pay increases. But if your employer is skimping on your annual increment, you should still step up your SIP at least by the prevailing inflation rate.

We will be running a series for the next ten days reminding you and guiding you about all that you need to keep in mind when you are in the process of wealth creation.

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