Home Editor Picks How can I accumulate ₹75 lakh corpus for my business in 5 years?

How can I accumulate ₹75 lakh corpus for my business in 5 years?

How can I accumulate  ₹75 lakh corpus for my business in 5 years?


I am a 35-year-old professional earn 1.5 lakh out of which I can invest half every month. I have used my savings to buy a house and now I have around 6 lakh in the bank. I want to start my own business in 5 years and I will need 75 lakh for this. How will I be able to reach this goal and what funds should I invest in?

—Name withheld on request

Usually, there are two ways to work on a monthly investment plan for goals that are for the long term. Your goal of creating a corpus of 75 lakh over five years has a reasonable time horizon. One approach is where you invest the same amount every month for the coming five years. By the end of the five years, you will accumulate 75 lakh. In this approach, you will have to invest 93,000 per month if we assume a 12% return per annum. The 6 lakh in your bank account can be retained as a contingency fund and let us not include that for your business goal.

As mentioned in your query, you are comfortable investing half of your salary i.e. 75,000 every month, the other approach of stepping up investment every year could work better for you.

You can start with a monthly investment of 70,000 and increase this investment annually by 15% from next year onwards. In such a case you will be able to reach your goal amount for your business by the end of 5 years if the return on investment is 12% per annum. This strategy will help you plan your savings and investments in the coming years in advance and also work on some other goals that you work out in the future.

A five-year horizon is good for equity mutual funds and you can consider investing in the following funds. Parag Parikh Flexicap (15%), UTI Nifty Index Fund (15%), ICICI Prudential Bluechip Fund (15%), HDFC Large & Mid Cap Fund (15%), Kotak Equity Opportunities Fund (15%), 360 One Focused Equity Fund (15%) and Nippon India Growth Fund (10%). Try to review your portfolio every six months to assess your progress and how your investments are doing.

Harshad Chetanwala is CFP, co-founder at MyWealthGrowth.com

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Published: 03 Apr 2024, 06:18 PM IST


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