How much should I invest to create Rs 15 lakh in three years? (2024)

I am 32 years old. I am looking for a long-term investment (10 years) and ready to take moderate risk. Currently, I have SIPs in ABSL Mid Cap Fund (Rs 1,500), ABSL Frontline Equity Fund (Rs 1,200), ABSL Medium Term Plan (Rs 1,300), SBI Bluechip Fund (Rs 1,500), HDFC Hybrid Equity Fund (Rs 1,500) and L&T Tax Advantage Fund (Rs 1,000). I have started these SIPs a couple of months ago. Can I continue with these SIPs or do you recommend any new mutual fund schemes? And I have a short-term goal as well: I need Rs 15 lakh in three years. How much should I invest to achieve my short term goal?

-- Vivek Anand

Ideally, you should choose your mutual fund schemes based on your goals, investment horizon, and risk profile. We typically ask investors to link their mutual fund schemes or portfolio to their goals because it helps them to stay focused on their investments.

Having said that here are a few quick observations. One, you are investing in too many schemes. You say you are ready to take moderate risk, but your portfolio is not really in line with it. For example, you have a midcap scheme, which is not suitable for an investor with moderate risk profile. Two, you are also investing in a medium-term plan, a debt scheme. Your other investments in two largecap schemes and an aggressive hybrid scheme are more suited for conservative investors.

When you are investing for a short-term goal, your priority should be to preserve your capital. You should not expose your capital to unwanted risk. If you are a conservative investor, you may opt for bank recurring deposits or short-term funds to achieve your short term goal. If you are ready to take a little extra risk for extra returns, you may opt for conservative hybrid schemes that invest a small part of their corpus in equity. Since you are investing for a short period, you need to invest almost equivalent to your target corpus to achieve your goal.

For example, assuming an annual return of 6.5 per cent, you should invest around Rs 37,650 every month to create a corpus of Rs 15 lakh in three years. Assuming an annual return of 8 per cent, you need to invest around Rs 36,750 for the next 36 months to create your target corpus.