The task you’re facing is essentially a blend of short, medium, and long-term goals. Meeting all three goals with your current savings and monthly contributions might be challenging, but with strategic planning and diligent investments, you can set yourself on the right path.
For the immediate goal, aiming to accumulate Rs. 500,000 in 2 years for a car purchase, you’ll need a stable and reliable form of investment considering the short duration. Conservative mutual funds or high-yield savings accounts could be ideal. If you opt for an investment yielding an average annual return of 6%, you would need to contribute about Rs. 18,700 per month, considering your starting principal of Rs. 220,000.
Your medium-term goal is to accumulate Rs. 6,500,000 in 16 years for a house. Here, equity-oriented balanced funds or diversified equity mutual funds could be suitable options. Assuming an average annual return of 10%, you would need to invest approximately Rs. 12,500 per month to reach your goal.
The long-term goal is to accumulate Rs. 1.4 crores in 22 years for retirement. For long-term goals, equity mutual funds are typically considered an optimal choice due to their higher return potential. Assuming an average annual return of 12%, you would need to invest approximately Rs. 14,000 per month to achieve this goal.
Note: These calculations are estimates and actual results can vary based on market performance and the actual returns of your chosen investments. Therefore, you should consider increasing your monthly investments or extending your investment horizon if possible.
Navigating this journey can be challenging, but remember, every financial journey starts with a single step. And, as Benjamin Graham, the mentor of Warren Buffet, famously said, “The investor’s chief problem – and even his worst enemy – is likely to be himself.” So, stick to your plan, keep your emotions in check, and you’re already on the right track. If you need a trusted advisor, consider Jama Wealth.
Additional Resources:
To plan your goals, use a tool (links given below).
- Car: Approx monthly investment 18,500. Click here for the goal
- Home: Approx monthly investment 11,000. Click here for the goal
- Retirement: Approx months 11,300. Click here for the goal. If we tag the 2.2 lakhs already available, then the monthly contribution will reduce by Rs 1,000.
Clearly the monthly saving is not sufficient. So you either need to increase the saving or reduce the goal or extend the target dates. Use the links above to plan this out and make your investments meet your life goals!
