- Wealth PMS
Inflation is a lifelong constant, but your salary isn’t. And if you live to be 90, you need to start saving now, and wisely. We’ll tell you how and where – Deepak Shenoy, Founder, Capitalmind
— Business Line (@businessline) May 13, 2017
Q: Rajeev had done what they said he should have done. He invested ₹5,000 a month in an SIP (systematic investment plan) in mutual funds since 2000, when he was 43. Today, he realises he needs ₹1 lakh a month when he retires this year. How well has he done?
A: Fantastically, if you look at the numbers. He has a return of over 24 per cent a year.
The bad news? Rajeev isn’t going to make it. His money has grown to ₹1.19 crore. That money, stored in a “low-risk” fixed deposit, will give him just ₹80,000 per month. He’s going to only earn 80 per cent of what he wanted, despite stellar returns. With inflation, his expenses will double in about 12 years. He’ll have to dip into the corpus to fund himself. He’ll run out of money by the time he is 72. Not a good age to be poor.
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