I am 23 years old and I want to create a corpus of Rs20 crores for retirement. How should I proceed?
Save as much as you can and invest that money. Age is on your side. I don't know whether income is on your side but I assume that you are doing well and would continue to. Start investing, as much as you can, in a balanced fund (aggressive hybrid). I normally tell people to invest in a balanced fund for at least three years to get used to equity.
After three years, once you get used to it, move to a portfolio of multicap funds. That should be the core. And after that, choose one smallcap fund and one midcap fund. Small and midcap should take 70-80 per cent of your portfolio and the rest (one-third) should remain in a well-diversified multicap fund. So, you will have three funds and invest as much as you can. I don't know how much money you can save today, but if you follow this plan, you will be happy in 20 years' time. Whether you would have 20 crores, depends on how much you are investing every month. It is clearly a function of the amount you are able to invest.
This article was originally published on October 28, 2018.
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