How to become rich quick in India: Turn into a crorepati with just Rs 1 lakh
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Income tax return filing on mind? This mutual fund scheme is called the best; save your money this wayHow to become rich quick in India: Becoming a crorepati is on every person's mind and that too quickly. But much effort and even better planning is required. We show you how to become a crorepati in India fast. Creating a portfolio is a tough job, more so if you are willing to invest a lumpsum amount. First-time retail investors often start their investing journey with a lumpsum investment. They would have a big amount to invest, but not much idea as to how or where they can judiciously invest their funds to get massive returns. As stock market stares at a wobbly ride in an election year, and a high interest rate era has made a comeback, retail investors are juggling with finding the best investment avenues. So, if you have Rs 1 lakh to invest at this juncture, you may look at dividing your investment in a manner that a well-diversified portfolio could be created. Zee Business spoke to financial experts to create a portfolio for retail investors with Rs 1 lakh in hand. This is what they suggest:
Jayant Manglik, President, Religare Broking
Since there cannot be a one fit answer to a portfolio construct, it is pertinent to note the major factors which play an important role in finalising the asset allocation of a portfolio. These are the age of the investor, the risk-taking ability and the goals. Thus, a younger age would generally be associated with a relatively higher risk taking ability with the goal of wealth creation. In such a scenario, a major portion (75-80 per cent) of the investment can be parked systematically in Equities with the balance in Debt instruments like Bond Funds, FMPs, FDs, etc. However, a higher age would typically equate with a relatively lower risk taking ability and a goal of capital preservation with reasonable returns. In such a scenario, investments in Debt instruments should supersede Equity investments. Nonetheless, it is important to note here that disciplined investments into equities over a period of time can also reduce the risks associated with equities considerably.
Nikhil Kamath, Co-founder, Zerodha
For a retail investor with one lakh in hand, it is important to remember to pick a strategy which is as passive as possible. No point churning a portfolio or spending excessive time on research, as this quantum of investment can never replicate a standard income. One lakh could be split up into two categories, with the index trading at such high valuations, we would recommend allocating 50 per cent to bonds and leaving the remaining 50 per cent in equity at this juncture.
Try not to leverage or make miracles happen, pick an investment strategy wherein the fees are low and I would recommend buying an ETF with really low management fees and being passive about it, not entering and exiting often. One could also look at buying a couple of large-cap stocks, picking from the nifty stocks and leaving them for the long term to take advantage of favourable tax laws related to investment.
What one should stay away from is leveraging and trying to trade short term, this could cause a huge dent on this quantum of money very quickly.
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Suren Kochhar, Chief Business Officer, Indiabulls Asset Management Company
Client profiling is an important step while making an investment decision. For those who are first time investors in mutual funds and are in their mid-twenties to early forties, investments must be done in Equity as an asset class through a 12 month Systematic Transfer Plan. If an investor is in her early forties to late fifties, then she could look at an Aggressive Hybrid Fund with an Equity Exposure from 65 per cent to 80 per cent in equity and the balance in Debt securities. However, it is also important to note that if the investments are for more than three years and the risk profiling does not permit a higher Equity exposure, then the investor should invest in a Conservative Hybrid Fund which has up to 25 per cent exposure in Equity and 75 per cent in Debt securities. Moreover, this particular category is most suitable for investors with age profile of sixty years and beyond.
Thus, a balanced portfolio well-diversified between debt and equity is answer to your portfolio management for Rs 1 lakh. A young investor may dabble into equities more, while an older one should take higher exposure into debt instruments, but both should stay away from short-term trading for quick gains on lumpsum money.
