What should be my strategy to invest in mutual funds by SIP if I want to generate Rs 80L in 17 years and Rs 1.3 Cr in 27 years? I have considered inflation at 8% for current expenses of 20 Lacs and 15 Lacs respectively.

You strategy should be to go for a combination of multicap and large cap equity mutual funds, since the time horizon is quite long. This will need to be fine tuned based on your risk profile and other requirements for ‘liquidity’ in the interim.

Goal 1 : RS 80 lacs in 17 years

Invest Rs 12,000 per month in an SIP

Goal 2 : Rs 1.3 crores in 27 years

Rs 5,500 per month in an SIP

As you can see in the above math, going for Direct Plan Mutual Funds will get you a benefit of Rs 13 lacs and 37 lacs respectively on the above two goals. That is about Rs 50 lacs benefit on an total investment of Rs 42 lacs. This shows the power of guaranteed extra return by cutting out broker commissions. This input alone is worth sharing with your friends!

Which funds to invest int? Here is a list of funds to consider:

1. Best Equity Funds in 2018 for long term
2. Best Multicap funds for long term

Note: While you took a ‘conservative’ estimate of 8% inflation the math for the target goals will be Rs 93 lacs and Rs 1.2 crores respectively. This a minor detail and as long you invest diligently you should be able to reach your goals.

Happy Investing!