To double your money in 6 years at an annual return of 15%, you need to invest your money in an investment option that has a compounding effect. Here are some investment strategies that can help you achieve this goal:
Equity Mutual Funds: Investing in equity mutual funds has been one of the most preferred investment strategies for wealth creation. Historically, equity mutual funds have delivered a CAGR of around 15% over the long term. However, it is essential to note that equity mutual funds are subject to market risk and volatility. Hence, it is advisable to invest in them for a long period of more than five years to fifteen years to reduce the impact of market volatility. If you invest Rs. 1.5Lakhs/ million in an equity mutual fund with a 15% annual return, your investment will double in approximately 5 to 6 years.
Unit-Linked Insurance Plans (ULIPs): ULIPs are a combination of investment and insurance. ULIPs invest your money in equity, debt, or a mix of both depending on your risk appetite. ULIPs have a five-year lock-in period, which helps reduce the impact of market volatility. If you invest Rs. 1.5 million in a ULIP with an 8% annual return, your investment will double in approximately 10 years.
Public Provident Fund (PPF): PPF is a popular long-term investment option that offers a guaranteed return of 7.1% per annum (as of April 2021). PPF has a lock-in period of 15 years and offers tax benefits under Section 80C of the Income Tax Act. Although the return on PPF is low compared to equity mutual funds and ULIPs, the guaranteed return and tax benefits make it a popular investment option. If you invest Rs. 1.5 million in a PPF account with a 7% annual return, your investment will double in approximately 11 years.
Real Estate: Investing in real estate can also help you achieve your goal of doubling your money in six years. However, real estate investments require significant capital, and there are risks associated with it, such as market fluctuations and property management. It is essential to research the real estate market thoroughly and invest wisely.
In conclusion, investing in equity mutual funds, ULIPs, PPF, and real estate can help you double your money in six years at an annual return of 15%. However, it is essential to evaluate your risk appetite, investment horizon, and financial goals before investing in any investment option. Consulting a financial advisor can help you make an informed decision and build a well-diversified investment portfolio.
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