I want to be a crorepati!

- Praveen Jain

To achieve your goal, you need to earn a compounded annual return of 30%.

To the best of my knowledge, there is no investment avenue that will give you this level of return in 10 years. Either bring up your savings, bring down your target or increase the time frame to achieve your goal.

• How to save

I am 23 with an annual salary of Rs 550,000.

I may be getting married in a year's time and will have to take care of everything. What's the best investment strategy?

- Amit Agrawal

Since you have only 12 months to go, it is tough to take an equity call. If the stock markets turn down when you need the money, you face the real risk of capital erosion. 

Simply keep the money in a long term floating rate fund for a year. Floating rate mutual funds have around 65% to 100% of their investments in floating rate securities. The balance is in fixed income securities. Floating rate instruments have a variable interest rate (just like you have a floating rate on a home loan). The interest rate changes periodically and is linked to a specified benchmark.

Alternatively, you could look at a 1-year or 13-month fixed maturity plan which is tax advantaged. These are mutual fund schemes that invest in fixed return instruments like bonds for a fixed period of time and return the money on maturity. To get some more information, read What to do with your money.

In your own interest, though, given your age, you must have a long-term investment as well.

Perhaps 10% of your savings, invested in equity through a mutual fund, can act as a long-term accumulation. You must not touch this even in dire times.

You are also likely to need money to set up home. It is a good idea to work out a plan after consulting your wife. If you lock your money in long-term investments, and find you need to fund your honeymoon, home-making, vehicle and the long list that stare a young man at his face, you could be in trouble. 

Begin by estimating and, perhaps, controlling your spend. Investments can come next.

• PPF may be taxed on withdrawal

I am 25 years old with a monthly income of Rs 13,000.

My premium on my insurance policy is Rs 5,000 every quarter.

I am getting married next month, for which I have taken a personal loan of Rs 75,000. The Equated Monthly Installment is Rs 2,750 for three years. How do I save?

- Amit

Even at a  nominal rate of 10% p.a., you are paying over half of your loan amount as interest. Repay the loan first, before anything else, unless it is a subsidised loan given by your employer. 

I do hope your wife will earn some income as well. It could become important to augment incomes in every possible way, before one can plan for the future and begin to save. 

It is also important that you understand your spending budgets first. Along with the responsibilities of being a husband, comes a long spending list, and you will need liquid cash most. 

Once you have grasped the spend budget, see if there is room to save Rs 500 per month. 

Open a PPF account. Even if you manage Rs 500 a year, you are fine with the PPF account. 

Once you know you can set aside money regularly, begin other savings, like mutual funds.

• How to access your PPF money

I am 25 with a monthly income of Rs 30,000.

I pay Rs 5,000 every month towards a home loan. I have to save for my marriage and would like to help my parents after marriage too (I have no siblings).

Where must I begin?

- Dhanya Shekar

I think it is time you placed yourself first, and began a plan. Assuming you plan to marry in another two to three years, and that you do not have any savings yet, desist from taking risks with your money. 

A short-term mutual fund will work for you, because other avenues have a longer lock-in period. You may not be able to withdraw the money when you need it. 

If you find a fixed maturity plan, opt for it. You can put about 10% to 20% of your money in equity funds, on the assumption that you may not be required to draw all your funds for your wedding.

This money can accumulate for you over the long run, and be of help in the future.