Investing for the Crore Milestone: A Roadmap for Indian Investors
4 March, 2025
Synopsis
Investment strategies to accumulate ₹1 crore require different approaches based on time horizons.
Regular portfolio reviews maintain alignment with financial objectives.
The HDFC Bank SmartWealth App's SmartJars feature assists in planning investments.
If you're an investor with aspirations of accumulating a substantial corpus of ₹1 crore, you're not alone. This figure holds a symbolic significance, representing financial freedom and security for many. However, achieving this corpus requires a well-crafted investment strategy and discipline. Considering various investment horizons and risk profiles, let us understand how much should you invest in mutual funds to get 1 crore?
How much should you invest in mutual funds to get 1 crore?
Dreaming of amassing ₹1 crore? Your journey begins with a clear investment strategy tailored to your profile. The HDFC Bank SmartWealth app, with its SmartJars feature, simplifies your planning process by helping you align your objectives with the right investment options. Let’s explore how to achieve your ₹1 crore target across different investment horizons.
Scenario 1: Investment Horizon of 5 Year
Aiming for ₹1 crore within 5 years as a moderate risk profile? While ambitious, it's achievable with a disciplined approach. For long-term objectives, hybrid or large-cap equity funds can be good investment options to look at
Facts:
Target Amount: ₹1 crore
Investment profile: Moderate
Assumptions
Expected Inflation= 5%
Inflation adjusted target: (Target amount + Expected Inflation/100 X Target Amount) = ₹1,27,62,816
Now, we use an SIP (Systematic Investment Plan) calculator to determine the monthly SIP amount. The figure we get is Monthly SIP = ~ ₹1,80,000
You’d need to invest approximately ₹1,80,000 per month through an SIP to reach your objectives.
Plan with SmartJars: Input your objectives into the app, and SmartJars will calculate the investment amount, factoring in inflation and returns. Track your progress seamlessly and adjust if needed.
Scenario 2: Investment Horizon of 10 Years
With more time, you can diversify your portfolio. Equity mutual funds potentially perform better in the long-term
Facts:
Target Amount: ₹1 crore
Investment profile: Moderate
Assumptions
Expected Inflation = 5%
Inflation adjusted amount: ₹1,62,88,946
Again, we use a SIP calculator to determine the monthly SIP amount. In this case, the figure is
Monthly SIP = ~ ₹92,500
To accumulate ₹1 crore in ten years, invest ₹92,500 per month via SIP.
Plan with SmartJars and let SmartWealth recommend hybrid or equity funds based on your risk appetite and timeline.
Things to keep in mind while investing
It's essential to have a long-term investment horizon and a disciplined approach to weather short-term market volatility. Here are a few things to keep in mind while investing:
Diversification: The Key to Mitigating Risk
Regardless of your investment horizon, it's crucial to maintain a well-diversified portfolio. Diversification can help reduce risk by investing across different asset classes, sectors, and market capitalisations. This strategy guarantees that your portfolio is not overly exposed to any single investment, thereby reducing the impact of market volatility.
One effective way to achieve diversification is to invest in multi-cap funds, which provide exposure to companies across market capitalisations. Alternatively, you can create a balanced portfolio by investing in large-cap, mid-cap, small-cap, and sector-specific funds.
Regular Portfolio Review: Staying on Track
Investing is not a set-it-and-forget-it endeavour. It's important to frequently check and adjust your portfolio to align with your investment objectives and risk profile. This typically involves evaluating the performance of your investments, making necessary adjustments, and reallocating assets as needed.
A general rule of thumb is to conduct an in-depth portfolio review at least once a year. However, you may consider more frequent reviews, especially during market turbulence or significant life events that may impact your financial dreams.
The Power of Compounding: Patience is Key
One of the most powerful forces in investing is the concept of compounding. When you reinvest your investment returns, those returns generate additional returns, leading to exponential growth over time. This principle is particularly potent when combined with a long-term investment horizon and disciplined investing approach.
To harness the power of compounding, it's essential to start investing early and remain patient. While the initial growth may seem slow, the benefits of compounding become more pronounced over time, potentially accelerating your journey toward the ₹1 crore milestone.
Achieving the ₹1 crore investment objective is a realistic and attainable objective for investors, provided they follow a disciplined and well-structured investment strategy. You can increase your chances of success by understanding your investment horizon, selecting appropriate investment vehicles, maintaining a diversified portfolio, and frequently reviewing your investments.
Remember, investing is a long-term endeavour that requires patience, consistency, and a willingness to weather short-term market fluctuations. With the right mindset and approach, you can unlock the path to financial freedom and security, one investment at a time. The legwork required to choose the right funds to realise your crorepati dream could dampen your spirits! To lift your spirits, download the HDFC Bank SmartWealth App from Playstore/Appstore – the Smartjars feature of this expert-curated DIY map will do the leg work while you can just sit, relax and wait for your crorepati dream to turn into reality!
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