Will I be able to create Rs 40 lakh in 10 years?

I have monthly SIPs of Rs 5,000 each in the following funds.
- DSPBR Midcap Fund-Reg(G)
- L&T Emerging Businesses Fund-Reg(G)
- Franklin India Smaller Companies Fund(G)
- HDFC Mid-Cap Opportunities Fund(G)
My target corpus is Rs 40 lakh in 10 years for education of my kids. Are these mutual funds good for the long term?
--Sumit Gupta

You are investing in midcap and smallcap schemes. These schemes are meant for aggressive investor with the capacity to withstand volatility. These schemes can be extremely risky and volatile, but they also have the potential to offer superior returns over a long period. Just make sure that your risk profile is in line with these schemes.

You are currently investing Rs 20,000. Assuming an annual return of 12 per cent, you may be able to create a corpus of a little over Rs 46 lakh at the end of 10 years.


It is not clear how you reached the target corpus of Rs 40 lakh. We would like you to work with real numbers to arrive at a realistic figure. Find out the current cost of the course, inflate it by 6-7 per cent every year to reach a realistic target corpus. Once you have the target, you can find out how much you need to invest every month to achieve it. This strategy would ensure that you meet your target without fail.