My financial goal is to accumulate Rs 20 lakh. Please advise on this.

I have been investing in mutual funds with investments worth Rs 4.5 lakh. I have also been investing Rs 20,000 through monthly SIPs in two funds. My financial goal is to accumulate Rs 20 lakh for my child’s education in 7 years. Please advise any changes to be made to this approach of mine.

Jaydeep Ganguly, Kolkata 

Investing regularly through SIPs in mutual fund has its advantages that you would have experienced by now. Moreover, it is a good start to have clear financial goals to invest appropriately in them. You are currently investing Rs 20,000 every month in funds and your current investments are worth Rs 4.5 lakh. This investment should be sufficient to achieve your financial goals if your portfolio earns a combined 12-15 per cent annualised returns, which is possible.

Invest in diversified equity funds and you should be able to reach your goal. Do make it a habit to check on the fund’s performance at least once a year, this way you will know how your investments are progressing towards your financial goals. If you reach your goal by year 5 or 6, just start moving your investments to safer and more fixed return form of investments or just your bank account for safe keeping.

olmdesk@outlookindia.com