To achieve financial goals, investors must remain consistent and disciplined. Even a small investment, when made regularly over time, can yield exceptional returns.
Once you know how much money you need to reach your financial goal, the next step is to start investing in equities to accumulate the required funds within the desired timeframe.
Here are the three key steps investors typically follow to meet their financial goals:
I. Determine the amount required to achieve your financial goals.
II. Choose suitable financial assets — such as equity funds, debt instruments, or gold — to help you build the necessary corpus.
III. Create a staggered investment plan based on the expected rate of return and the available investment horizon.
Saving ₹50 lakh in 15 years
Let us understand how this works. Suppose you want to accumulate ₹50 lakh over a 15-year period. How much monthly investment in equity mutual funds would you need to accumulate this money? It depends on the expected rate of return.
If the equity funds you invest in tend to deliver an annual return of 9% per annum, you would need to invest ₹13,213 every month for a period of 15 years in order for the investment to reach ₹50 lakh, as shown by the goal SIP calculator.
But if the rate of return is 10% per annum, you would need to invest ₹12,063 every month in mutual funds via SIP to accumulate ₹50 lakh (as shown in the table above).
Likewise, if the rate of return on your mutual fund investment is 11% per annum, you would need to invest ₹10,996 every month, thereby investing a total of ₹19.79 lakh in 15 years to accumulate ₹50 lakh.
And if you are lucky enough to opt for a scheme which delivers an annualised return of 12% per annum, then you need to invest ₹10,008 every month, thus investing a total of ₹18.02 lakh in 15 years.
To sum up, as an investor, you would need to invest on a regular basis to meet your financial goals. It is recommended to invest via SIPs in mutual funds, along with investment in other assets, and the amount of investment is based on the rate of return your investment would likely deliver.
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