# How to balance a portfolio with magic of maths  Term used to calculate the same is:

A person with 25 age carrying 1 Lac investment till the age of 55. He should invest 409090.91 in debt and 590909.09 in equity at the age of 25.

Debt investment amount calculation is: Amount*Age/55 and reducing 10% from the result. This 10% is ultimately your 10% equity investment at the retirement age.

Equity investment calculation: Amount – In Debt

Example:
Debt investment: 100,000*25/55 = 45454.45 and deducting the 10% from this amount will give the Debt investment value of 40909.09/-

Equity investment: 100,000 – 40,909.09 = 59,090.91/

This is the case of only 100,000 lac that he is carrying from the age 25 till 55. What about if you adding additional amount to your principle each year? A slight alternation on the above calculator will give you the exact result. Below is the table showing a person adding additional amount of 1 lac each year:

No we have found method to balance a portfolio with single amount investment and balancing portfolio with adding amount each year.

Now, it is the time to discuss about balancing a portfolio that giving a 6% returns annually to your investments in a compounding basis. ( I have mentioned 6% to ease the calculation only. For debt investments, you can expect a minimum of 6% and equity you can expect between 12% to 100 or more percentage depends on your investments.) Below is the list, how your portfolio growing each year with returns along with your regular addition of 1 lac in each years.

That’s all.

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