How to become a crorepati: All you need is Rs 5,000 and a financial goal
How to become a crorepati: The answer lies in financial planning. Undoubtedly, one can easily become rich via stock markets, but it requires patience and well-articulated financial planning. Without this, a person will find it very difficult to survive on Dalal Street.
How to become a crorepati: Being rich is everybody's dream, but not many achieve that goal. Also, everyone knows stock markets can offer hefty returns, but not many manage to make it pay. So, where do they lack? The answer lies in financial planning. Undoubtedly, one can easily become rich via stock markets, but it requires patience and well-articulated financial planning. Without this, a person will find it very difficult to survive on Dalal Street.
The most important thing to understand for individuals or retail investors is one should always start investing in markets via mutual funds because direct exposure to equities could be hazardous if one is not well-versed with the way stock markets work. So, to ensure that there are no slip-ups, below are three key things for investors to keep in mind before they buy a mutual fund and put themselves on the road to becoming a crorepati. So, here is how to become a crorepati:
1) Identify financial goals
Before you analyse which fund to buy, you should list down all the financial goals that you would like to meet. Financial goals could be of long-term like retirement, kid’s education and marriage or of short-term like travel or buying a car.
2) Figure out the type of fund you need
Once, the financial goals are identified, one can zero down to the mutual funds one should buy. On the basis of short or long-term goals, a largecap, midcap, diversified or a balanced fund could be looked into. Largecap and midcap funds are meant for long-term, diversified and balanced funds for medium term and debt funds for short-term goals.
While creating a portfolio there has to be a balance between debt and equity funds because of course equity funds are riskier than debt funds. An aggressive investor may have larger exposure to equities, but a risk-averse investor would do well to invest more in debt funds.
Now let's understand how just Rs 5000 invested periodically can help you become a crorepati.
A 25-year old viewer of Zee Business Dheeraj Ahuja called on Mutual Fund Helpline to help him create a portfolio for future goals. He was willing to invest Rs 20,000 each month to serve four financial goals keeping 22-24 years’ time horizon.
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Pooja Bipin Bhinde, certified financial planner, suggested that he should start 4 Systematic Investment Plan (SIPs) of Rs 5000 each in the following mutual funds:
- Kotak Select Focus Largecap Fund
- L&T India Value Midcap Fund
- Reliance Smallcap Fund,
- Aditya Birla Sun Life Equity Fund, a multicap fund