Others have come up with some radical suggestions.
Making a crore is undoubtedly a challenge. But utilising it effectively is another.
Here is what some of our readers would do:
I will divide the entire amount into four parts: 30% + 30% + 30% + 10%.
I would then invest 30% in stocks. This amount will be further allocated thus:
10% - Blue-chip index stocks
10% - Mid-caps with good business modules, management and profits
10% - New stories like Petronet lNG and Power Trading Corporation
I would invest the next 30% in real estate.
I would spend half the amount on buying an apartment in a posh locality. And the other half in buying a big plot of land on the outskirts of the city. The value of this piece of land would rise as the city expands.
Another 30% would go into very safe investments: National Savings Certificate, Public Provident Fund, LIC policies, bank deposits and Government of India bonds are some options.
The last 10% would be spent on diamond-studded gold and platinum jewellery.
- Anjan Bora
I would work out the following strategy:
1. Sell all the stocks.
2. Put the entire amount in my savings account with a nationalised bank. Sounds stupid, I know!
3. Wait for the present government in the Centre to fall.
4. Then I would wait for the Sensex to drop by around 700-800 points.
5. I would then re-enter the market with the entire amount and wait another year for this amount to double to Rs 2 crore (Rs 20 million).
What would I have done then?
Gone back to Point 2 and probably continued in the same way.
- Anand Sathyamoorthy
First things first. I would immediately say, "Goodbye!" to my boss.
With 15% of the amount, I would go on a world tour with my fiancée and donate around 10% to charity.
Then I would invest the rest:
25% - equities
25% - buy a decent apartment
25% - bank deposit
- S K Bhoopathy
I would remain invested with the initial seed amount of Rs 30 lakh (Rs 3 million).
I would sell shares worth Rs 70 lakh (Rs 7 million), which is the profit made. This amount would then be invested in various fixed income investments.
I would plough the interest I earn back into the stock market and the cycle would continue.
- Sanjay
I would resort to three courses of action:
1. Pre-pay my existing loan to a level where it matches my existing fixed return investments.
2. Another part would have been invested in a home to earn a rental income as well as avail of asset appreciation. If necessary, I would even finance part of this purchase by taking a home loan. But I would ensure the Equated Monthly Installment is 60% or less than the rental income.
3. Assuming I am left with, say, 40% to 50% of the original Rs 1 crore (Rs 10 million), I would reallocate the balance into the market. This time, my target would be Rs 2 crore (Rs 20 million).
I would continue this cycle over the next 10 years and hope to make enough to retire at 45.
- Prasanna Singh
If my investment of Rs 30 lakh (3 million) grew to Rs 1 crore (10 million), I would cash out (assuming this is a long-term capital gain and I don't have to pay tax on it!).
There are three things I would do with the Rs 70 lakh (Rs 7 million) profit:
1. Donate 10% of the amount to a known charitable trust.
2. Put Rs 6 lakh (Rs 600,000) in the Post Office Monthly Income Scheme and earn a return of Rs 4,000 per month.
3. Assuming I already own the house that I stay in or that I stay with my parents, I would invest around Rs 57 lakh (Rs 5.7 million) in property. This, in developing areas of the city, not in posh localities.
I can assume a rental income of approximately Rs 12,500 to Rs 15,000 per month and a capital appreciation of around 5% to 10% per annum.
Obviously, in the booming real estate scenario, the appreciation can be much more. But I am averaging it out over a 10 to 15-year span and basing this on my experience in South Bangalore.
What would I do with the original Rs 30 lakh (Rs 3 million)?
Reinvest Rs 21 lakh (Rs 2.1 million) in shares or mutual funds. Though I would probably wait for a bear phase when prices drop to re-enter the market.
Rs 9 lakh (Rs 900,000) would go into National Savings Certificate and fixed deposits.
By doing this, I generate:
~ Monthly cash flow of Rs 16,500 to Rs 19,000 (rent + interest from the MIS). So, per annum, I earn Rs 198,000 to Rs 228,000.
~ Appreciation of Rs 285,000 to Rs 500,000 annually on my property.
~ The fixed deposit would get me 6% and NSC gives me 10% interest annually. So an average of 8% on Rs 9 lakh (Rs 900,000) is Rs 72,000 as interest per annum.
~ Assuming an average of 12% per annum on my equity investment of Rs 21 lakh (Rs 2.1 million), I would earn Rs 252,000 per annum.
- Aravind Krishna
To view earlier responses, please read What would I do with Rs 1 crore.
Illustration: Dominic Xavier
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