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Mutual fund calculator: Monthly SIP you need to accumulate ₹11 crore by age 50

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Mutual fund calculator: Vijay Kumar Virnave is a 25 year old professional whose take home salary is around 40,000 per month and he has no loan to repay. He is looking for an investment tool that can help him accumulate around 11 crore when he turns 50 years. However, he don’t want to invest in direct stock market.

Speaking on whether Vijay’s investment goal is viable; Kartik Jhaveri, Manager — Wealth at Transcend Capital said, “As the investor has no economic burden like any kind of loan repayment, it is possible to accumulate 11 crore in next 25 years but it would require some pun. Since, the investor is not in mood to invest in direct stocks; systematic investment plan (SIP) in equity mutual funds category is the only other option that can deliver the kind of return that will help and investor accumulate 11 crore in next 25 years. However, to keep the monthly SIP at lowest levels, annual step-up has to be adopted.”

Asked about the annual step-up that would enable an investor to accumulate 11 crore in 25 years; Jitendra Solanki, SEBI registered tax and investment expert said, “Normal practice is to maintain 10 per cent annual SIP step-up, but here the investment goal is highly ambitious and hence, 15 per cent annual step-up would be safe.”

On how much one can expect to get in return after investing in equity mutual funds for 25 years; Jitendra Solanki reminded 15 x 15 x 15 rule of mutual funds that says that one can expect 15 per cent return on one’s equity mutual fund investments for 15 years. So, in the case of 25 years time horizon, one can expect around 15 per cent return on one’s money, said Solanki.

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Assuming 15 per cent annual return after continuously investing for 25 years maintaining 15 per cent annual SIP step-up, SIP calculator suggests that one needs to start with monthly SIP of 12,000. This will help an investor accumulate around 11 crore in next 25 years.

Photo: piggy SIP calculator

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Photo: piggy SIP calculator

Asked about the mutual fund SIP plans that can yield 15 per cent return in 15 years; Vinit Khandare, CEO & Founder at MyFundBazaar India Private Limited said, “Depending upon the risk appetite of the investor, he or she can choose small-cap, mid-cap or large-cap fund.”

Vinit Khandare of MyFundBazaar listed out the following mutual fund SIP plans that may hold well for those investors who want 15 per cent return on mutual funds investment in long term:

Small-cap Fund: SBI Small Cap Fund – Regular Growth.

Mid-cap Fund: Aditya Birla Sun Life Mid Fund – Plan – Growth Regular Plan.

Large-cap Fund: HDFC Top 100 Fund – Regular Plan – Growth.

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