How To Create A Rs 2-Crore Corpus In 20 Years: Investment Strategy You Can Adopt

Market fluctuations are unavoidable. Creating wealth over the long term requires patience. Don’t react on impulse to market fluctuations. Focus on your goal of accumulating Rs 2 crore, and have a disciplined investment strategy.

Creating a corpus of Rs 2 crore in 20 years seems daunting, but with a proper and disciplined investment plan, it is possible. It all depends on knowing your risk appetite, selecting the appropriate financial instruments and investing regularly over the long term.

Time is perhaps the greatest wealth-creation factor. The sooner you invest, the more you get to take advantage of compounding. It is where your investments create more returns over time. Even small monthly investments can amount to a lot if left to compound for 20 years.

Define Your Portfolio

In order to make Rs 2 crore in 20 years, a balanced investment plan is required. A mix of equity, debt and hybrid products can result in growth while controlling risk.

Equity mutual funds: In the long term, equities have higher prospects for returns. A systematic investment in equity mutual funds can fetch 10% to 12% return on an average every year on a monthly basis. Assuming a return of 12% per year, investing around Rs 30,000 per month in equity securities for about 18 years can get you there.

Debt instruments: Debt funds, fixed deposits or PPF fall in this category. They help stabilise your portfolio and keep volatility low. Although debt provides lower returns (5% to 7% per annum), it protects your investments from market fluctuations.

Hybrid funds: Hybrid or balanced funds offer a mix of equity and debt, offering a moderate return with less risk.

Consistency is important. Setting up a Systematic Investment Plan (SIP) ensures that you invest a fixed amount at regular intervals, irrespective of the market situation. Automating your investments not only leads to discipline, but also allows you to take advantage of rupee cost averaging. This results in buying more units when they are cheap and fewer when they are expensive.

Review And Rebalance

Over 20 years, your portfolio’s asset allocation may need changes due to market fluctuations. Periodic review and rebalancing, which includes shifting funds between equities and debt to maintain your desired allocation, ensures that your portfolio aligns with your long-term goals while managing risk.

Market fluctuations are unavoidable. Creating wealth over the long term requires patience. Don’t react on impulse to market fluctuations. Focus on your goal of accumulating Rs 2 crore, and have a disciplined investment strategy.