Mutual funds: Monthly SIP which is enough to accumulate ₹100 crore in 30 years

Mutual fund calculator: Equity mutual funds are suitable for those high risk investors who don't have enough time to manage their stock portfolio. According to wealth advisors, equity mutual funds are definitely an answer to an investor's query 'how to become rich.' They believes that a long term investor should go mutual fund SIP (systematic investment plan) as it helps an investor to get average of the return given by the mutual fund plan over the period of investment. They said that it can be started any time as every time is a good time to start a mutual fund SIP. 

Mutual fund advisers maintained that if an investor is disciplined enough, then in that case, starting a monthly SIP with around ₹20,500 to ₹21,000 amount can help him or her to accumulate to the tune of ₹100 crore in 30 years. However, for that they will have to do some pun in their mutual fund SIP.

Speaking on the adaptation that a mutual fund investor requires with its monthly SIP, Kartik Jhaveri, Wealth Manager at Transcend Capital said, "Long term mutual fund SIP enables an investor to get compounding benefit means interest on the interest earned on one's money. However, my suggestion to an investor is to increase one's monthly SIP with rise in one's monthly income. This helps your investment grow in sync with your income."

How to become rich via mutual funds?

On how a disciplined mutual funds investor can increase one's monthly SIP amount, Kartik Jhaveri said, "One can use annual SIP step up. In this pun, an investor raises one's monthly SIP amount by near 15 per cent annually. By doing this, the person manages to strike a balance between one's income and savings."

On whether ₹100 crore retirement corpus in 30 years is achievable or not, SEBI registered tax and investment expert Jitendra Solanki said, "The retirement corpus of ₹100 crore in 30 years is achievable provided the investor is disciplined enough. Generally, an investor raises one's monthly SIP amount by around 15 per cent per annum. But, in case of this ambitious ₹100 crore target, one will have to adopt 20 per cent annual SIP step up to make sure about meeting one's investment goal of ₹100 crore."

Asked about mutual fund return that one can expect on one's mutual funds SIP for 30 years, Jitendra Solanki said, "One can expect near 15 per cent return on one's money if the time horizon is 30 years. However, if the investor has higher exposure in mid-cap and small-cap funds, then the return may become 16 to 16.50 per cent per annum. As the investment horizon is very long, my suggestion for the mutual funds investor is to keep higher exposure in mid-cap and small-cap funds."

SIP calculator

Assuming 16 per cent annual return on one's money for a mutual fund SIP for 30 years maintaining 20 per cent annual SIP step-up, the mutual fund calculator suggests that an investor needs to start a monthly SIP with ₹20,500 to ₹21,000 per month to meet one's investment goal of ₹100 crore.

See mutual funds SIP calculator below:

On mutual fund plans that can help an investor achieve ₹100 crore corpus in 30 years, Pankaj Mathpal, MD & CEO at Optima Money Managers listed out the following schemes:

1] ICICI Prudential Large & Midcap Fund;

2] Aditya Birla Sun Life Multi-cap Fund; and

3] Nippon India Flexi Cap Fund.

Disclaimer: The views and recommendations made above are those of individual analysts or wealth management companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.