How can someone earning ₹5 lakh a month today buy a ₹9.25 crore sea-facing 3BHK in South Mumbai within seven years – without a ₹1 crore monthly salary or a ₹100 crore inheritance?
Certified Financial Planner Sneha Vasdeo shared a detailed case study on LinkedIn, illustrating how disciplined investing, income growth, and strategic allocation can make this a reality.
The property – currently a new launch under construction – is priced at ₹6.50 crore. By the time of possession in seven years, it’s expected to appreciate to ₹9.25 crore. The target is to arrange ₹4 crore for the downpayment, with the remaining ₹5.25 crore financed via a home loan. At an estimated EMI of ₹4.35 lakh/month, the required income in Year 7 will be about ₹8.5 lakh/month.
The client’s profile:
- Current income: ₹5 lakh/month, projected to grow to ₹8 lakh/month in 7 years
- Supports a family of six – parents, wife, two children
- Existing mutual fund portfolio: ₹2.5 crore, with 40% (₹1 crore) allocated for the home goal
- Aim: Secure a family home offering dignity to parents, stability to children, and long-term wealth value
Step 1: Growing the existing portfolio
The ₹1 crore allocated for the home from the mutual fund corpus is expected to grow to approximately ₹2.2 crore in seven years, assuming a 12% compounded annual growth rate (CAGR).
Step 2: Systematic Investment Plan (SIP) structure
The client invests 40% of monthly income into SIPs, with 40% of that amount earmarked for the home purchase:
- Year 1: ₹5L income → ₹2L SIP → ₹80k for home
- Year 2: ₹5.75L → ₹2.3L SIP → ₹92k for home
- Year 3: ₹6.6L → ₹2.64L SIP → ₹1.05L for home
- Year 4: ₹7.1L → ₹2.84L SIP → ₹1.14L for home
- Year 5: ₹7.5L → ₹3L SIP → ₹1.2L for home
- Year 6: ₹7.8L → ₹3.12L SIP → ₹1.25L for home
- Year 7: ₹8L → ₹3.2L SIP → ₹1.28L for home
At a 12% CAGR, these home-specific SIPs are projected to reach around ₹1.08 crore by Year 7.
- Final downpayment calculation:
- SIP corpus for home: ₹1.08 crore
- Portfolio allocation growth: ₹2.2 crore
- Total: ₹3.28 crore
- Shortfall: ~₹80 lakh, covered by drawing from the remaining mutual fund portfolio, which is projected to reach ~₹5.08 crore in seven years.
Vasdeo’s core message: the path to high-value property ownership isn’t reserved for those with massive incomes or inheritances. “You need a vision, a timeline, and the will to start today,” she wrote.