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`1 crore
ANNIVERSARY
SPECIAL REPORT
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ANNIVERSARY
SPECIAL REPORT
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Why `1 crore?
Even though converting savings of a few thousand rupees a month into one crore rupees
looks like a difficult task, starting early and having the right approach make it doable.
WHAT IT COST
IN 2000
WHAT IT COSTS
NOW (2016)
SCHOOL FEES/MONTH
(PUBLIC SCHOOL IN METRO)
`2,000
`4,200
`8,800
HIGHER EDUCATION
(ENGINEERING DEGREE)
`3-4 lakh
`6-8 lakh
`12-16 lakh
DOCTORS CONSULTATION
CHARGES (PER VISIT)
`200
`800
`3,200
1 LITRE
OF PETROL
`30
`70
`200
`2.5 lakh
`8 lakh
`20 lakh
30 YEARS
40 YEARS
50 YEARS
`
30,000
`
53,750
`
96,214
60 YEARS
`
1.72 lakh
ANNIVERSARY
SPECIAL REPORT
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GIVEN RISING PRICES, HOW MUCH WILL YOU ACTUALLY NEED IN RETIREMENT?
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RETIREMENT CORPUS
`1 crore
`2 crore
`3 crore
5 years
11 years
18 years
`4 crore
26 years
`5 crore
35 years
Note: Withdrawals are ination adjusted and will rise by 6% every year
ANNIVERSARY
SPECIAL REPORT
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20 YEARS AGO
Principal
investment
Value of PPF
investment
Value of Investment
in the Nifty*
Additional returns of
equity investor
PPF VS EQUITY
Growth of a monthly SIP of `10,000 over the last 20 years
1.2
In ` crore
EQUITY*
1.0
0.8
0.6
PPF
0.4
0.2
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ANNIVERSARY
SPECIAL REPORT
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One of the basics of safe
investing is to spread
your money across
different investments.
Mutual funds are an
easy way to do this. Each
mutual fund spreads money across a
large number of investments.
Choice
There are mutual funds
available for every kind
of return and risk level
and suitable for every
kind of time horizon.
No matter what kind of
investment you want, theres likely to
be a variety of funds that suit you.
Convenience
You can easily invest as
well as withdraw from
mutual funds in any
amount. Investments
can be made by filling
up a simple form or even
online with a direct debit from your
bank account. Similarly, redemptions
can be made directly to your bank
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Mutual funds are
obligated by law to
release
comprehensive data
about their operations
and investments. All
funds release NAVs (Net Asset
Value) daily and most release their
complete portfolio every month. The
SEBI (Securities and Exchange
Board of India) regulates the fund
industry very tightly and is
constantly refining the applicable
rules to protect investors better.
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There are many
investments you can
conveniently make
only through a
mutual fund. For
example, the stocks of
foreign companies. For most of us, it
would be prohibitively complex to
open brokerage accounts and buy
shares in different countries.
However, you can do so easily by
investing in an international fund.
ANNIVERSARY
SPECIAL REPORT
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WEALTH CREATORS
Returns from a monthly SIP of `10,000 over the last 20 years
2.5
In ` crore
2.0
1.5
20-YR CAGR
Equity
tax-planning
20.93%
Equity
multi-cap
18.04%
Balanced
17.69%
1.0
0.5
AMOUNT
INVESTED
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Value Research
Our `1 crore plan assumes a conservative 12% rate of return. The actual 10 year returns of the fund
categories have been higher at 15.7%, 17.5% and 19.4%. In short, you could
potentially achieve your `1 crore goal, even faster.
ANNIVERSARY
SPECIAL REPORT
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BECOME A CROREPATI
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`30,600*
crore
10 years
`12,000*
crore
15 years
`5,400*
crore
20 years
`2,600*
crore
25 years
`1,300*
crore
30 years
*Increase investment amount by 10% per year
An apple a day keeps the doctor away. Atleast `1,300 a month is your apple for achieving financial health. With higher savings invested regularly every month, you improve your financial health dramatically.
Review annually
Review your investments
annually to make any changes. If
a fund has underperformed its
benchmark take a hard look at
the reasons for the
underperformance and the
likelihood of their persistence
before deciding your future
course of action. If decide to exit
from a particular fund after your
analysis, its important to not to
do so in a hurry. You must
consider the tax implications and
exit charges and weigh these
against the benefits of redemption
or switching.
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Putting the first three steps into
action is easy, the difficult bit is
staying the course. Equity
markets, and in turn, your funds
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ANNIVERSARY
SPECIAL REPORT
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4.42
1 year late
2 years late
3 years late
4 years late
5 years late
21
40.4
60
78.80
97.40
4.21
4.01
3.63
3.44
Assumptions used in above calculation: Monthly investment of `5,000 started in 2016, Amount raised by 10% every year, Investment earns 12% compounded annual returns