Want to buy dream house? Be a proud owner of Rs 50 lakh house at 35, just invest in these mutual funds
A number of schemes have been introduced by the government to make housing affordable for people. Yet, to own their dream house remains a big challenge for most. Here is how you can turn your dream into reality.
A number of schemes have been introduced by the government to make housing affordable for people. Yet, to own their dream house remains a big challenge for most. The cost of residential properties in major cities is on the rise and with more and more youngsters leaving their homes in search of better opportunities, the demand for housing is increasing. While the data shows that a flat could cost you in crores in cities like Delhi and Mumbai, you can own a decent flat or house for way less than that, if a proper and patient search is carried out. And, if you start at the right time, you may end up owning you dream house of Rs 50 lakh by the age of just 35!
There is only one mantra to achieve this - invest. Most people try to build the required corpus by saving money. While that might help, the money doesn't grow rapidly enough and when adjusted against inflation, might leave you with the need of more. Investments, on the other hand, help you beat inflation by growing the money.
In this case, since you have a long horizon, the best investment option is mutual funds. Srikanth Meenakshi, co-founder and COO, FundsIndia.com told Zee Business online that to create a corpus of Rs 50 lakh in 10 years, an investor needs to save around Rs 23,000 per month during this period. He said that if the average annual return is at around 12 per cent, the investor would easily end up saving the required amount.
"Assuming an aggressive average annual return of 12%, an investor would need to save and invest about Rs 23,000 every month between now and then," Meenakshi said. he added that at least two to three years would be required to secure the built-up corpus (by investing in low-risk investment instruments such as deposits or debt funds), it would be more prudent to assume a lower rate of return overall.
"If one assumes a 10% return, the amount required would be Rs 25,000 every month in this period," he said.
How many mutual funds to invest in?
Meenakshi suggests that for this amount, you can opt for five funds. "The investor can have a simple 5 fund portfolio – four equity funds and one debt fund with equal distribution of Rs 5000 each. Equity funds can be one large cap fund, a multicap fund and two mid and small cap funds. Debt fund can be a low-risk ultra short term fund or short term fund," he said.
Surely, there is no better feeling than being a proud owner of a house of your own.
So, what are you waiting for? Do some research and invest, invest, invest!