[diptimanraje]

Originally Posted by Aviator_guy

It is very heartening to see that you followed a very disciplined approach and reaping the benefits of long term investment strategy.

I observed from your original post that there were sip of about 5000 including your wife's contribution. Other investment being endowment insurance and ppf. I ran the scenario of returns from the sip (assuming annual step up by 15% and healthy returns of 20%). Combining this with other investment like lic/ppf still doesn't get me anywhere near the 15 Cr figure. What am I missing?

Yes 16 years back we had done only 2 SIPs between us today we have 5 and our average monthly contribution towards the same comes to 30000 per month for 16 years, today’s value for which is 3.5 cr.
Our PPF value after 24 years is 1.3 cr between us both.
Our LIC policy value comes to 2.25 cr.
ULIP policy value after 20 years is
1.5 cr. Between both of us.
We have also invested in NPS and VPF. Combined value of which is about 3 cr.
And fixed deposits are of 3.5 cr.
Hence totally our combined portfolio comes to 15 cr.

[Aviator_guy]

Originally Posted by diptimanraje

Yes 16 years back we had done only 2 SIPs between us today we have 5 and our average monthly contribution towards the same comes to 30000 per month for 16 years, today’s value for which is 3.5 cr.
Our PPF value after 24 years is 1.3 cr between us both.
Our LIC policy value comes to 2.25 cr.
ULIP policy value after 20 years is
1.5 cr. Between both of us.
We have also invested in NPS and VPF. Combined value of which is about 3 cr.
And fixed deposits are of 3.5 cr.
Hence totally our combined portfolio comes to 15 cr.

That's very impressive I was breaking my head how a 5k SIP (even with step up) could yield such a high value in 20 years !

Now I realise that it is combination of different asset classes, regular large investment amount and longer time window which is making the difference.

May be the thread title should be updated to bit generic like "How to create a corpus of 15 Cr via power of compounding and mix of asset classes"

[hothatchaway]

Excellent example of consistent investing and it is the discipline that you have displayed (and your family) that has borne fruit. Like some members have already pointed out, it is your discipline over a long period of time and a shared mindset for wealth creation that has delivered results.

I crunched the numbers out of curiosity and for you and your spouse, the bulk of your investments were in LIC endowment policies. But for this, your portfolio level CAGR would have been higher. I assumed a CAGR of 20, 8 and 7 for equity MF, PPF and LIC respectively. The mix is better for your son as he had >50% in equity when you wrote your original post 15 years back. As we all know, PPF no longer gives 8% and I doubt your LIC policies gave even 7%. Going forward, it will be too optimistic to expect 20% odd returns from equity. Tough times ahead for those starting out now!

Yours is a great example of the mindset trumping everything else.

Thanks for sharing!

[maddy42]

Congrats and very motivating journey. Goes to show that a diversified portfolio provides a good return if you do manage dipping into the savings and also provided a very long run way.

You could take your foot off the gas a bit now and enjoy your savings, but do be very careful on what details you reveal both in life as well as the online life.

In addition do take care of your health and wellness going ahead as a lot of people in their pursuit of wealth forget about healthy living.

Very inspiring journey. Keeping what you inherited and building on it and giving a bigger pie to your kid says a lot about your journey.

[diptimanraje]

After 30 years of investing, making blunders and right and wrong investments, but making a plan and sticking to it religiously without missing a single SIP date or EMI date. Having a CIBIL score of 810, I can state that it is possible for anyone to achieve their financial goals.

By tradition a person starts working at the age of 25 and works till 55-60. So totally he gets 30-35 years to obtain financial independence. It is possible by setting aside 35000 per month.

Yes it is. I suggest the following:

1. Start a PPF account and start investing 6000 in it per month in 30 years @ 7.1% it will become 80 lacs.

2. Start a NPS account and start investing 4000 in it per month in 35 years ( as maturity is at age 60 ) @ 12% it will become 2.7 cr.

3. Start SIPs in different equity mutual funds of 25000 per month for 30 years @15% you should make 17 cr.

Total by investing 35000 per month you will be accumulating 20 cr in 30 years.

This is for you for your retirement purpose.

If you want to create generational wealth or legacy wealth then you will have to think about your next generation as they have age on their side and due to which by investing a smaller amount you can accumulate huge sums. Power of compounding.

Start investing immediately after your children are born so that by the time they attain age 45 their accumulated wealth should be about 100 cr.

1. Stars a PPF account and invest 6000 per month in it for 45 years @ 7.1% accumulation will be 2 cr.

2. Start NPS account and invest 4000 per month in it. @ 12% accumulation will be 9 cr.

3. Start SIPs of 15000 per month in various diversified equity mutual funds, in 45 years @ 15% accumulation will be 100cr.

Total by investing 25000 per month for 45 years one can accumulate 110 crs.

Now the debate is if we should invest for our children, if we do it for them they will not have value for it and they will be incompetent. We should not hand over the plan to them till they attain 45 age. Till then they have gone through all the struggles of life and have faced reality. They will value the plan and will help contribute in it to make it grow bigger.

I believe, today we can sit in the shade of a tree because someone else had planted the tree long time ago. It’s our time now to plant a tree so that others can sit in its shade in the future.

I hope this inspires you to plant the tree.

Thanks.