Introduction
Recently while watching television I came across the advertisement of ‘Kaun Banega Crorepati’ (KBC) making a comeback. KBC is one of the most famous shows of Indian television history. The popularity and viewership statistics of this show reveal the aspirations of the common man on the street. All of us aspire to become crorepati’s. Lot of people dream of participating in the show and become crorepatis overnight. But few people have got an opportunity to participate in the show and from those few people also, so far the show has produced only one crorepati. Few people came close to it realising their dream of becoming a crorepati overnight through KBC but could not make the final cut. Harshwardan Nawate owns the distinction of being the only person becoming a crorepati through KBC. So what about the aspirations of all the other people who dream of becoming a crorepati?
Well this article discusses one of the ways of becoming a crorepati …….. Interested, then read on ……….. 
Ways of Becoming a Crorepati
First let us list down some of the ways of becoming a crorepati
- Participate in ‘Kaun Banega Crorepati’ or similar television show and answer some simple and not so simple questions and walk away with your cheque of 1 crore.
- Buy a lottery ticket or a jackpot (Playwin or Lotto) ticket and hope that you win it.
- Marry a rich person. Someone has rightly said if your father is not a crorepati it is your bad luck, but if your father in law is not a crorepati then it is your foolishness ……….
- Become a filmstar like Shahrukh Khan or Kareena Kapoor. They charge crores of rupees for each film. But not every one can become a SRK or Bebo.
- Invest regularly in a disciplined manner for the long term and become crorepati by retirement or even before that.
Well the first 4 ways of becoming a crorepati depend more on luck. So nothing much we can do about it. But the last method is a more dependable way and requires more of regular investment and discipline and little bit of luck. So we will talk about this method more in detail.
Now you must be wondering can a person become a crorepati by investing a small sum every month. Let me give you a small example. If a 30 year old person invests for the next 30 years till his/her retirement, an investment of Rs 1797 per month is all it will take to reach the magic figure of 1 crore, if the investment earns an annual return of 15%. This is the magic of compounding. Albert Einstein called ‘Compounding’ the ‘Eighth Wonder of the World’. So now after reading the example does becoming a crorepati seem within the realms of reality? Well, while KBC could produce the sole crorepati Harshwardan Nawate, we will make an attempt to make all others crorepatis. Excited ….. So let us discuss this more in detail.
The Journey to Your First Crore
To start planning for the retirement corpus of 1 crore you need to know 2 things:
- Time Horizon: The number of years you have for investment
- Rate of Return: The rate of return the investment is expected to earn
Based on the number of investment years you have and the assumed rate of return you can arrive at the monthly investment that you need to invest to reach the magic figure of 1 crore by retirement.
Time Horizon
The number of years available for investment depends on the number of years you have till retirement. The sooner a person starts the better. The below scenario will make it clear the benefit of starting early.
- Assuming that the investment generates an annual return of 12%, to reach the amount of 1 crore in 30 years the investment required for a 30 year old person will be Rs 3277 per month only!!!
- If a person starts 10 years later, then for a 40 year old person the investment required will be Rs 10975 per month which is 3 times more than the earlier monthly investment.
- If a person starts another 10 years later, then for a 50 year old person the investment required will be a whopping Rs 45060 per month to reach the magic figure of Rs 1 crore.
- So if you start at the age of 30 the investment requirement is only Rs 3277 per month, but if you start at the age of 50 the investment requirement climbs to Rs 45060 per month which is 15 times more.
So now you see the sooner you start the better. The magic of compounding works wonders in the long run. Just like our life, investment also is a marathon and not a sprint like KBC. So invest regularly for the long term.
| Age of the Individual | Monthly Investment Required |
| 30 Years | Rs 3277 |
| 40 Years | Rs 10,975 |
| 50 Years | Rs 45,060 |
The table shows the monthly investment amount required based on the age of the individual. The target is 1 crore and the interest rate assumed is 12%
Rate of Return
This is a tricky part or a slightly difficult part. While you can be sure of the number of years you have for investment, you cannot be sure of rate of return your investment will earn. You have to assume the rate of return your investment will earn. When investing in equity mutual funds or balanced mutual funds the rate of return can be assumed from a high of 15% to a low of 7%. This depends on the risk appetite of the person and the product chosen accordingly. The below scenario will make clear how the rate of return assumed makes a big difference.
- Let’s say if a 30 year old person has high risk appetite and assumes an annual return of 15% then the investment amount required to reach 1 crore will be Rs 1797 per month (30 years).
- If the same 30 year old person has a medium risk appetite and assumes an annual return of 12% then the investment amount required to reach 1 crore will be Rs 3277 per month (30 years).
- Now if the same 30 year old person has a low risk appetite and assumes an annual return of 8% then the investment amount required to reach 1 crore will be Rs 7100 per month (30 years).
So you see higher the rate of return assumed lower is the required monthly investment amount. Lower the rate of return assumed higher is the required monthly investment amount. But don’t forget high return always brings high risk along with it. Equities in India have historically given returns in the range of 12-15% annually over the long run.
| Rate of Return Assumed | Monthly Investment Required |
| 15% | Rs 1797 |
| 12% | Rs 3277 |
| 8% | Rs 7100 |
The table shows the monthly investment amount required based on the rate of return assumed. The target is 1 crore and the investment horizon is 30 years.
Combination of Investment Time Horizon and Rate of Return Assumed
The table below explain at various combinations of investment time horizon and the rate of return assumed, how much will be the monthly investment required to reach the magic figure of 1 crore.
| Rate of Return Assumed | |||||||||
| 8% | 9% | 10% | 11% | 12% | 13% | 14% | 15% | ||
| Time Horizon | Monthly Investment Required | ||||||||
| 30 Years | 7099 | 5875 | 4847 | 3990 | 3276 | 2685 | 2198 | 1796 | |
| 25 Years | 11001 | 9545 | 8108 | 6940 | 5930 | 5060 | 4312 | 3670 | |
| 20Years | 17574 | 15653 | 13922 | 12367 | 10974 | 9727 | 8615 | 7623 | |
| 15 Years | 29620 | 27274 | 25097 | 23079 | 21210 | 19483 | 17886 | 16414 | |
| 10 Years | 55517 | 52709 | 50034 | 47485 | 45059 | 42750 | 40553 | 38465 | |
| 5 Years | 137090 | 133809 | 130614 | 127501 | 124469 | 121514 | 118637 | 115833 | |
Conclusion
So now if you are convinced that by investing a small amount every month on a regular basis for the long term can help you reach that magic figure of 1 crore, then what are you waiting for? Start working towards making your 1 crore. You can take a combination of 2 approaches for this. One, as soon as the phone lines for KBC participation open, keep trying your luck to participate in the show. Second, depending on your age and the assumed return rate start making investments. Now if you get a chance to participate in KBC and happen to win the show you can take your 1 crore and forget about your investment program and scrap it all together. People who are not so lucky and do not get a chance to participate in KBC program, can continue with their regular and disciplined investment program and ultimately become a crorepati some time down the line. The ultimate goal is to become a crorepati – either the easy way of KBC or the hard way of regular investments.
So now does becoming a crorepati seem easy and within reach? But then I wonder if every one starts investing and becomes a crorepati, I guess ‘Kaun Banega Crorepati’ will lose it significance. Then not many people will go for the show. Then I think Star TV will have to rework their strategy and come up with something different to woo its lost audience. May be they can come up with a new avatar of KBC with 100 times more prize money and rename the show as ‘Kaun Banega ARABPATI’……..:) Needless to say if that happens then at that time I will also come up with my next article, this time it will be titled ‘Kaun Banega Arabpati’ ………
Please let us know your comments about the article by puttin your comments in the below section or write to us gopal_gidwani@yahoo.com
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{ 48 comments… read them below or add one }
Sir, where exactly should I invest Rs. 7099 monthly for 30 years to be come a Crorepati. My age is 28 years, just got married.
Hello Saurav,
Since you are 28 Years old and have 32 more years for retirement you can consider investing in equity mutual funds. You can invest some money in diversified equity funds like HDFC Top 200 Fund and DSP BlackRock Top 100 Fund. You can also invest some money in index funds like ICICI Prudential Index Fund and Tata Index Fund (Nifty Plan – Option A). The idea is to spread your investments in 3-4 mutual funds rather than 1 mutual fund.
Thanks Sir, just requesting you to plz explain the difference between an equity fund & index fund.
Hello Surav,
An equity fund can invest in the shares of any company and in any proportion. But an index fund invests on in the shares of those companies which are a part of the index (Sensex or Nifty). Also all the stocks in the index have a percentage weightage, so the fund manager invests in the shares of index companies in proportion to their weightage in the index. So in an normal equity fund the fund manager is very active in stock selection and in an index fund it is passive style of investing.
Moreover, I just checked HDFC Top 200 equity fund Sir, it has 2 options 1)Dividend 2) Growth. May I know the advantages/disadvantages of both & should I start investing through SIP mode??
Hello Saurav,
You should go for monthly SIP investments.
In Growth option the fund does not declare regular dividends. So you will not have regular cash flow or income from the fund. In case you need money you will have to sell the units of the fund. In case of dividend option, whenever the fund declares any dividend, it will result in some cash flows for you. In dividend also you have 2 options. Either you can choose to withdraw the dividend and use it for any personal purpose or you can choose to re-invest the dividend and you will get equivalent units of the fund. So in case if you think that you will not need to withdraw any money from your investments in the fund, then you can go for growth option.
Then I shud start SIP…But Sir, will I be able to get partial withdrawal facility like a non mutual fund SIP???
Hi Saurav,
Yes you should start with a monthly SIP.
I dont know what you mean by non mutual fund SIP. But in case you are looking for partial withdrawals from your mutual funds then yes you always have that option. You can sell the number of units based on the amount you need to withraw. The amount that you need to withdraw, you can always divide that amount with the NAV per unit to arrive at the number of units you need to sell to withdraw that amount.
Hope that answers your query.
Thanks a lot Sir for Ur promt valuable inputs. I have a SBI MAgnum Sector Fund Umbrella Contra Growth SIP which I guess doesnt invest in MFs. Again, I might be wrong coz like many people, I’ve invested in many MFs blindly just to save taxes. Now that I have responsibilities on me, I have 2 seriously take investing my money.
Sir, can U suggest saome Govt AMCs like LIC/UTI etc which will serve my purpose of accumulating Rs 1 crore in 30 yrs.??
Hello Saurav,
Returns from Mutual Funds (whether private MFs like HDFC MF or Tata Mutual Fund or Government Companies MF like UTI MF or LIC MF) are dictated by the financial performance of the companies in which these Mutual Funds invest. So how will investing in a Government Company MF make a difference? Dont think that if a Government Company Mutual Fund loses money on its investments, the Government will refund you your money. That will not happen.
Your investment decision should depend on the Returns given by the MF in the past, the track record of the promoters of the MF, the disclosures made by them from time to time, the expense ratio, the customer service given by them etc etc. Please note that I am not biased in favour of private companies and also I have nothing against UTI and LIC. Both of them are well managed Government Companies and have given good returns. Only thing is if you compare the returns given by their equity funds in the last 5 years they are little less than the returns given by some other funds. That definintely does not mean that UTI and LIC are not good companies to invest. If you are comfortable investing in them, you can very well go ahead and invest in the mutual funds of UTI and LIC Mutual Fund. The whole idea is to maximise the returns on your money invested.
You can invest some money in diversified equity funds like HDFC Top 200 Fund and DSP BlackRock Top 100 Fund. You can also invest some money in index funds like ICICI Prudential Index Fund and Tata Index Fund (Nifty Plan – Option A). The idea is to spread your investments in 3-4 mutual funds rather than 1 mutual fund. (Please note this is the same suggestion I gave in my last reply also).
Very well explained Sir… one more doubt… do these SIP rate of returns(HDFC Top 200 or DSP Blackrock 100 etc.) compounded monthly or anually? If anually then isnt it better to invest in a fund giving compunded returns monthly??
The returns that are published by Mutual Funds are annual. Equity mutual funds dont calculate the returns on monthly compounding.
Hello Gopal,
The article is explained well. Moreover it really makes me think the virtue of small savings can lead to such huge benefits over a period of time.
Great work!!
That is the magic of compounding. No wonder ‘magic of compounding’ is called the 8th wonder of the world by lot of people………..
Hi Gopal,
I am currently investing in following Mutual Funds via SIP. Could you please gone through with list of MF’s and suggest Are they all ok means will they give good returns in futrue?
Personally by looking to the performance I am is doubt with “Reliance Diversified Power Sector Fund – Gr”. do you think this also give the good return in future?
Thanks in Advance
Govind
* Birla Sun Life Frontline Equity Fund – Gr
* DSP BlackRock Natural Resources and New Energy Fund – Gr
* HDFC Top 200 Fund – Gr.
* ICICI Prudential Infrastructure Fund – Gr
* Mirae Asset India Opportunities Fund – Gr
* Reliance Banking Fund – Gr
* Reliance Diversified Power Sector Fund – Gr
* Reliance Regular Savings Fund Equity Plan – Gr
* Sundaram Financial Services Opportunities Fund – Gr
Hi Govind,
I went through the list of your mutual funds. HDFC Top 200 Fund and Reliance Regular Savings Fund Equity Plan are well diversified equity funds and have performed consistently over years. The rest of funds are mostly sectoral funds. I would suggest these sectoral funds should not form a major portion of your investment portfolio. That does not mean I am saying that these funds are not good funds. The major portion of your equity investment portfolio should be diversified equity funds and sectoral funds can form a small part of your overall portfolio
Hi , I really like the explanation but can you assist me in explaining the formula that you have used to calculate the compound interest ( Example- Rs 5930 monthly at 12% interest for 25 years =1 crore)? The reason I am asking is to understand the calculation and do mu budgeting taking inflation in mind.
Hello Amit,
The calculations have been done using the compound function in a Financial Calculator (FC200). In that you feed in the tenure, interest, the FV as 1 crore, PV as 0 and then calculate PMT. It gives you the amount required to be invested to reach the target of Rs. 1 crore
Dear Gopal,
I was just going through your blog and it seems that funds such as HDFC top 200 and DSPBR Blackrock have delivered close to 18% over a five year horizon and let’s say I were to invest around 5000 to 6000 in both of them. If these two funds don’t perform well after let’s say 5 years, then do I take out my money and then again search for others funds which might have delivered returns close to 15% and should this go on till my target amount is achieved?
Both are great funds and what I have assumed might not happen but at some point time they will not be able to generate these kinds of returns as it has happened in case of Reliance Growth and Vision
Hi Abhijeet,
In such situations its best to have a margin of safety. By that I mean do your financial planning assuming conservative returns. For example even if HDFC Top 200 has delivered 18% returns I do my financial planning assuming a more conservative return of 12%. So that gives me a margin of safety of 6% (18% – 12%). Well as it happens with all great companies, there can be small periods of under-performance, but then there are also periods of out-performance which cover up the under-performance.
Also in your portfolio have a mix of equity, balanced and debt component. The average expected return should match return given by the funds. Also have some diversification for your portfolio outside equities to commodities, fixed income etc. You should review the performance of the funds regularly once is 6 months or 1 year. And if your fund is consistently under-performing, then you should switch.
First of all I really want to thank you for providing such an insight
into investing for a common man. I am new to mutual funds I didn’t have
any knowledge regarding mutual fund but I have been ms
reading your blog and watching CNBC Awaz have gained certain knowledge on
overall portfolio management… But I still have certain questions
which I like to get answer for..
First of all let me tell you my goal.
I wanted to retire after 27 years ( my age is 31 years) and want to
have at least 80000 rs per month (as per given market condition) . So
as per my calculation would need a sum of around 6 crore as corpus (
taking inflation of 8% in Mind).So if i invest the corpus with 10% of
annual return in FD( after 27 years) which will be 60 lac and if i
divide the return by 12 months i will get 5 lac per month which is
equivalent to rs 80000 as of today.
My First question is whether my retirement planning is correct?Or have
I missed some details…
My second question is-
as I am new to MF investment I have planned to invest in rs 2000 in
each fund
HDFC TOP 200
ICICI Pru Focused Bluechip Eqty (G)
HDFC Balanced
Birla Sun Life G-Sec. Fund – Long Term (G)
How is my fund selection ( 65% in Equity & 35% in Debt)? And if I
invest around Rs 20000 in these funds through SIP for 25 to 27 years
whether I will be able to achieve my goal of 6 crore?
My next question is How should I Invest through SIP whether it is
through DMAT account or through Web Portal like FundsIndia.com? and
why?
Also could you give methe path where I can download the calculator… Which you have mentioned above?
Hello Amit,
The financial calculator (FC200) that I have mentioned above is a physical calculator and not an online calculator.
First of all I really want to thank you for providing such an insight
into investing for a common man. I am new to mutual funds I didn’t have
any knowledge regarding mutual fund but I have been ms
reading your blog and watching CNBC Awaz have gained certain knowledge on
overall portfolio management… But I still have certain questions
which I like to get answer for..
First of all let me tell you my goal.
I wanted to retire after 27 years ( my age is 31 years) and want to
have at least 80000 rs per month (as per given market condition) . So
as per my calculation would need a sum of around 6 crore as corpus (
taking inflation of 8% in Mind).So if i invest the corpus with 10% of
annual return in FD( after 27 years) which will be 60 lac and if i
divide the return by 12 months i will get 5 lac per month which is
equivalent to rs 80000 as of today.
My First question is whether my retirement planning is correct?Or have
I missed some details…
My second question is-
as I am new to MF investment I have planned to invest in rs 2000 in
each fund
HDFC TOP 200
ICICI Pru Focused Bluechip Eqty (G)
HDFC Balanced
Birla Sun Life G-Sec. Fund – Long Term (G)
How is my fund selection ( 65% in Equity & 35% in Debt)? And if I
invest around Rs 20000 in these funds through SIP for 25 to 27 years
whether I will be able to achieve my goal of 6 crore?
My next question is How should I Invest through SIP whether it is
through DMAT account or through Web Portal like FundsIndia.com? and
why?
Hello Amit,
I have not very clearly understood how much are your current expenses and how you have done the calculations.
If I take your current monthly expenses as Rs 80,000 (Rs. 9.6 Lakhs per annum) then in your 60th year your annual expenses will be Rs. 89,44,538 assuming an inflation rate of 8%. Based on this to sustain yourself for the next 20 years of retirement you will need a corpus of Rs. 15.96 crores assuming your expenses during your retirement years grow at 6% pa and your retirement corpus earns a return of 8% pa.
To arrive at this retirement corpus of Rs. 15.96 crores you will have to invest Rs. 3,89,306 pa (Rs. 32,442 per month) for the next 30 years. This investment amount will have to be increased at the rate of 5% pa and the rate of return assumed on investment is 12%.
I see that you have not assumed the increase in your expenses post retirement. You have assumed that your expenses will be constant at Rs. 5,00,000 per month post retirement. This is not possible as expenses will continue to increase post retirement even though there is no income. Also post retirement at that time how have you assumed that the FD’s will be 10%? Also the interest earned on FD’s is taxable, so the net amount that you will get will be less which you have not factored in.
I am not sure whether the information that you have given, I have interpreted correctly or not. The currently monthly expenses amount of Rs. 80,000 that I have taken is correct or not.
Also regarding your mutual fund portfolio a mix of Equity (65%) and debt (35%) is good.
The amount that you have mentioned (20,000 per month) if invested for 30 years earning a return of 12% will accumulate Rs. 6,48,70,226 (6.48 crores). Ideally you should select an investment medium which ensures the deliver of mutual fund units in your demat account so that you can have a consolidated statement of all the MF schemes at one place
Hi Gopal,
Thanks a lot for your reply… The amount that I have mentioned above Rs 80000 monthly expenditure … I have already taken into consideration the increase in Expenditure after retirement my current expenditure is rs 40000 per month … which i will bring it down .Please let me know whether my fund selection of below mentioned mf is good or not and by investing in these mf can i expect return of 12% i next 25 years
HDFC TOP 200
ICICI Pru Focused Bluechip Eqty (G)
HDFC Balanced
Birla Sun Life G-Sec. Fund – Long Term (G)
Also i have not understood your reply on below mentioned question, could you please elaborate a little
How should I Invest through SIP whether it is
through DMAT account or through Web Portal like FundsIndia.com? and
why?
Hello Amit,
Out of the 4 funds that you have mentioned
HDFC TOP 200
ICICI Pru Focused Bluechip Eqty (G)
HDFC Balanced
Birla Sun Life G-Sec. Fund – Long Term (G)
I know about HDFC Top 200, HDFC Balanced and ICICI Pru Focused Bluechip Eqty (G). All 3 are good long term funds and should give you more than 12% CAGR returns over the next 25 years based on their past track record. I cannot comment anything on Birla Sun Life G-Sec. Fund – Long Term (G) as I dont know anything about it.
Regarding your next query, ideally you should go for SIP and have the units delivered in your demat account.
Like for example I have a trading account with HDFC Securities which is linked to my HDFC Bank Account. I have subscribed to their HDFC Top 200 and HDFC Prudence Fund SIPs. So HDFC Securities debits my HDFC Bank Account every month and the MF units are credited to my demat account.
The rationale behind having units in your demat account is that you receive period statements from NSDL about the holdings which helps you keep track of your investments (Shares, NCDs, MF units). Also other benefit is that you have a consolidated statement of all your holdings at one place.
Hi Gopal, First of all I really want to thank you for patiently answering my questions… I have been reading your advice not only for MF but also for insurance and health insurance… So Once again a BIG THANK YOU>>>> I would have some questions
1- If I have HDFC securities account can i also buy mutualfunds from other houses like ICIci and reliance?
2- What is your opinion on opening account with Sharekhan for MF ? do you recommend it ?
3 I am also interested in doing STP so can u suggest me some top Liquid Mutual funds for HDFC, RELIANCE & ICICI? Through which I can put lumpsum money there and then periodically transfer it to hdfc top 200,balance, icici pru focus and the reliance mf
hi Gopal,
first of all a big thank you. when everybody tries to sell their own MF in disguise of giving advice. ur blog is truely unique.
now my question is that when ppl want invest in MF they look for best performing fund in year and blindly invest. is it right thing cause fund might be over crowded and returns get diluted. so what one must look into a new fund for to see the potential for its future growth.
and my second query is that is it right time to invest in market when sensex is rolling on floor. what advice do you give in picking right funds at this time
Hello Sanjay,
Regarding your second query you should always invest when markets are low. Lot of people panic when markets falls. But any good analyst you hear will say that in a growing economy like India such sharp corrections or falls present very good buying opportunities. I will suggest you to invest through SIPs and not lumpsum amount.
Regarding your first question on things to look at while choosing the MF Schemes. Well some pointers for that can be:
1) Objective of the scheme; whether it matches your risk profile. For example for a person aged 55 years who is 5 years away from retirement, it will not make sense to invest in a fund which has maximum exposure to equity. Similarly for a 25 year old person who is at the start of his career and can take risk, it will not make sense for him to invest in a fund which has maximum exposure to debt instruments. So look at scheme objectives and see if it matches with your risk profile.
2) The profile and background of the Fund House and more importantly of the Fund Manager.
3) The expense ratio of the scheme. This variation in percentage terms even though very small can make a significant difference in absolute terms.
4) The AUM and the portfolio of the scheme
5) The returns given by the scheme in the last 1, 3, 5 years compared to the benchmark index and compared to its peers.
These pointers are not in the sequence that I have mentioned.
Thanks once again for providing options which I was not aware of…HDFC Sweep in deposits facility… My question is that Sweep deposit facility is good If I have Lump some of money but In case I don’t have Lump some and i am planning To Invest say rs- 20000 every two months then In that Case Sweep deposit would not provide me this flexibility to deposit it and then transfer it in mf via sip…. I that case would there be any other service where I can invest which will act as chaneel for depositing money in MF through SIP or the only option is liquid fund ( SFT)
Hello Amit,
You can give standing instructions for monthly transfer of SIP amount though your Bank Savings Account or through a liquid fund. But I will not be able to comment on liquid funds offering this facility as I am not aware of any such liquid funds. You will have to check with individual MF Houses that are providing this facility.
Hi Gopal,
I am 36 years old and plan to retire on 60. How much should I invest every month to make 1 crore at retirement & in what to invest?
Hi,
I have been investing in SIP for last 1 yr in the following funds
1. DSP Blck Rock Top 100 Equity Rs. 1500
2. DSP Small/Mid cap fund Rs. 1500
3. ICICI Dynamic Growth -Rs. 2000
4. ICICI Discovery Growth -Rs.2000
5. HDFC Topp 200 -Rs. 1500
6. Reliance Equities Opportunities Fund Rs. 1500
7. Reliance Gold Fund -Rs.3500
Should I continue with these funds or need to modify the profile. Expected rate of return >= 12%
Thanks,
DSPBR Top 100, HDFC Top 200, ICICI Discovery are good funds. I cannot comment on the other funds as I dont know much about them. You can look at addition funds like HDFC Prudence and IDFC Premier Equity to your portfolio. In case of gold you can go for GOLDBEES from Goldman Sachs Mutual Fund.
Dear Sir,
I already have 3 insurance policies – LIC money back, Birla sunlife endowment plan and Kotak Super advantage plan. now i want to get term plan for myself my age is 28 years . please tell me some good term plan. also give advantages and disadvatages of online term plan purchase and normal term plan purchase from agent.
Hello Ravindra,
You can consider one of the below online term plans
Click2Protect from HDFC Life
AnyTime plan from IndiaFirst Life Insurance
MetProtect from MetLife
i-Life from Aviva
i-Term from Aegon Religare
Difference between online term plan and offline plan bought from agent is the premium. Online term plans are much cheaper than offline plans as in online plans there is no commission payable to agents as they are not involved.
Hello Gopal,
I am 27 year old guy working in software company, I have invested my money in MFs started from Feb 2011, kindly let me know if my portfolio is ok or do i need some changes on it.
HDCF Top 200(G) – 5000/-
Fidelity Equity Fund(G) – 2000/-
DSPBR Micro Cap Fund (G) 1000/-
Reliance RSF Balanced – 1000/-
I also have a RD with HDFC bank of 3000 pm.
I have SBI (Multi Option Deposit) saving account in which I have 50,000 saved.
DO you think I should invest somewhere or my portfolio is ok?
Thanks
AJ
Hello Ankit,
Your portfolio seems okay to me. The missing part is life insurance. You should buy a term insurance policy with a cover amount that will be able to take care of your financial responsibilities and financial liabilities in case something happens to you.
Also your investments should be targeted towards a financial goal like you should be investing a specific amount every month in a mutual fund assuming a certain rate of return towards a financial goal of X amount after X number of years.
Hi Sir i have 3 life insurance of LIC and a LIC growth, i want to invest now i am 28 years, can you help in investing, long term and short term
Hello Frazer,
What exactly is your requirement? I mean, I want to know your financial goals, the amount required, the time horizon available, the monthly amount available for investment and accordingly I will advice you to invest. You can write to me at gopal_gidwani@yahoo.com
Hi Sir,
I have 3 insurance policies in LIC, two Jeevan Anand policies and one Jeevan Saral policy and a money back and a medical insurance, Total investment come around 40 k annual now i want u to guide me in investment portfolio.I am 27 yrs. my family depends on me, I am single my annual income is around 2 lac.
Hello Gopal,
I am 41 year old guy working in Abudhabi, I have invested my money in MFs started from Feb 2011 by SIP, kindly let me know if my portfolio is ok or do I need some changes on it.
UTI Divided Yield – 4000/-
UTI Wealth build fund(G) – 5000/-
UTI Opportunity Fund(G) -5000/-
UTI Master value fund – 5000/-
UTI Retirement benefites pesnsion fund – 5000/-
I also have 3 RD with Corporation bank of 5000 pm,1725 pm and 1725 pm(Mysself and my children name)
DO you think I should invest somewhere or my portfolio is ok?
Thanks
Hadja
Hello Mr. Hadja,
You are investing Rs. 24,000 with one mutual fund (UTI) in different schemes. I will suggest you diversify little bit among AMCs and the types of schemes to invest in. I suggest you consider the following schemes for investment:
1) Large cap funds like
ICICI Prudential Focused Bluechip Equity Retail
Franklin India Bluechip
DSPBR Top 100 Equity Regular
2) Large and midcap funds
UTI Opportunities
HDFC Top 200
ICICI Prudential Dynamic
3) Mid and small cap funds
ICICI Prudential Discovery
HDFC Mid Cap Opportunities
IDFC Premier Equity
4) Multi cap funds
HDFC Equity
HDFC Growth
DSPBR Equity
5) Balanced funds
HDFC Prudence
Birla Sun Life 95
You can pick 1 fund from each category and invest accordingly. All the above are good schemes with good past track record. They will give you good diversification among different types of schemes like large cap funds, large and midcap funds, mid and small cap funds, multiple cap funds, balanced funds etc.
Your RD investments are fine and you can continue with them as it is.
Hello,.
Sir, I came across this website by searching the net for a good health insurance policy.
I request you to help me out with the same. My details are-39, single, female, no existing medical condition, self-employed, no other policy and not much knowledge abt them either! Which policy would you suggest so that my future medical expenses are met and I do not incur much financial burden? Please guide me so that I get maximum benefit .Your help would be much appreciated.
Thank you.
Hello Anju,
I suggest you take a look at health insurance plans offered by Apollo Munich and Max Bupa. Both companies offer lifelong renewal and there is no loading for claims. Apollo follows a age slab premium and Max Bupa increases the annual premium every year based on some criteria
Hello Sir,
Many thanks for your guidance. I have some questions-Is apollo munich restore better as compared to their standard policies? I know the multiplier and restore options sound attractive, but are they really so? Suppose, due to NCB my SI doubles after 2 claim-free years, will that be my new SI?and for how long? I understand that on 2 consecutive claims it will again go down. So, will this multiplying of SI go on and on after every claim free year? Does it have any limitations or loop holes?Should one start with low coverage and then upgrade or is there some drawback to this strategy? Please help me choose the policy as well.
Hello Amit,
HDFC Securities uses the online MF System of BSE. So it can place buy and sell orders for MF Units of not just HDFC MF but other MFs also. So yes you can definitely buy MF units of other fund houses also through HDFC Securities.
2) Regarding your second query, rather than going for a third party broker, I would recommend you go for a Company which has a bank as well as a broking arm like HDFC or ICICI Bank or SBI. In case of these say HDFC, the funds will be there all the time in your HDFC Bank Savings Account and when ever you want to buy anything you just block the amount in your bank account and place the order for buying shares / MF units. Till the time the money is there in your bank account it continues to earn 4% interest. But in case of a third party broker (where trading account and banking account are with separate entities) like say ShareKhan or IndiaBulls Securities you need to maintain balance in your trading account. You dont earn any interest on this amount.
3) Regarding your 3rd query, instead of putting money in a liquid fund, I suggest you put the money in a Flexi Deposit of a bank. For example HDFC Bank has a sweep-in deposit facility. In this facility you can put your lumpsum amount in a Fixed Deposit and the FD is linked to your Savings Account. You can issue standing instructions (SI) to the bank for monthly debit to your savings account and transfer the money to HDFC Securities to buy MF units (any MF House) through SIP. But the advantage is till the time the money is there in the FD it continues to earn high returns of an FD. When the SIP instruction will be executed only the SIP amount will be reduced from the linked FD and the remaining amount will continue to earn the interest of a FD without the entire FD being broken. You can read about Sweep-in deposits at
http://www.hdfcbank.com/personal/accounts/fixed_deposits/sweep_in_account/sweepin_faqs.htm
Overall HDFC Bank offers good facilities. You can have all at one place. Sweep-in Deposits, Savings Account, Securities Trading Account, Demat Account, MF Purchase Facility (any MF Fund House) and delivery in Demat Account. Consolidated statement of all investments (equities, MFs, Gold ETFs, NCDs and other Bonds) at one place.
Please Note: I am not promoting HDFC Bank. There are other banks also like ICICI Bank offering these facilities. But since I am myself using these facilities from HDFC Bank I can talk more in detail about HDFC Bank. But before availing any product please read all the offer documents properly and talk to the bank people and then sign the dotted line. Make your judgement and take your own decision based on what you see, hear and read……….