How to make 10 lakh in 5 years ?

This is in response to a question from one of the mytipstowardswealthy blog reader.

"How can I make 10 lakh in 5 years to use as a down payment for my new apartment. I can take calculated risk. I want to know how much i want to invest now to meet this goal ?"

I just try with the compound interest calculator. As per my analysis there are two methods to achieve this goal.
1) Invest Lump-sum
2) Invest via SIP


Since you are capable of taking calculated risk and have long term goal [ 5 years ], i would recommend investing in Indian equities. Here we can assume a 15% compounded annual return from Indian equities.

1) Invest Lump-sum
Need to invest 5 lakh today in a 4/5 star rated mutual funds. After 5 years your money would have grown to 10 lakh due to 15% annual compound interest. But its difficult to have that much ready cash. So lets go with the second method.

2) Invest via SIP
As per the compound interest calculator you need to invest Rs 12500 per month for the next 5 years into 4/5 star rated mutual funds. After 5 years your money would have grown to 10 lakh due to 15% annual compound interest. You can try with 2 funds. A Large Cap Fund and Mid Cap fund in the ratio 60:40 allocation.

I would recommend HDFC Top 200 for the large cap fund and
IDFC Premier Equity Plan A for the Mid Cap Fund.

Thanks to the power of compounding !!