Hello sir, I am Biswajit. I want to do SIP for my son's education and future. My son's name is Rajbir and he is four years old. I can do SIP of 15 to 20 thousand. Which app is better for SIP? Please create a good SIP portfolio so that I can understand how much minus I should invest in which fund. I hope I will get an answer to my question. Thank you very much.
Ans: – Biswajit, this is a very good goal for your four-year-old son Rajbir.
– Starting early gives you a long investment period.
– Your Rs.15,000–20,000 monthly SIP can build a strong education corpus.
– The key is consistency, not chasing the highest return.
» Suggested SIP Portfolio
For Rajbir, I would keep the portfolio mainly equity-oriented.
For a Rs.20,000 monthly SIP:
– Rs.8,000 – Flexi-cap equity fund
– Rs.6,000 – Large and mid-cap equity fund
– Rs.4,000 – Mid-cap equity fund
– Rs.2,000 – Balanced advantage fund
For a Rs.15,000 monthly SIP:
– Rs.6,000 – Flexi-cap equity fund
– Rs.4,500 – Large and mid-cap equity fund
– Rs.3,000 – Mid-cap equity fund
– Rs.1,500 – Balanced advantage fund
» Why This Combination
– Flexi-cap provides the main core of your portfolio.
– It can invest across different company sizes.
– Large and mid-cap funds provide a diversified growth approach.
– Mid-cap allocation can improve long-term growth potential.
– It can also have higher ups and downs.
– Balanced advantage gives some stability during market corrections.
– Four funds are enough for this SIP size.
– Avoid adding many funds without a clear reason.
» Investment Time Horizon
– Rajbir is currently four years old.
– His higher education may start around age 17 or 18.
– You therefore have around 13 to 14 years.
– This is a useful period for equity investments.
– Do not stop SIPs during market falls.
– Market corrections are normal in long-term investing.
» How To Use The SIP
– Start with Rs.15,000 if Rs.20,000 feels difficult.
– Increase the SIP whenever your income increases.
– A 5% to 10% yearly SIP increase can help greatly.
– Keep the SIP running through market ups and downs.
– Review the portfolio once every year.
– Avoid changing funds based on short-term performance.
» Important Step Before Education
– Around five years before Rajbir needs the money, reduce equity exposure.
– Start moving the required education amount towards safer investments.
– Do this gradually instead of making one large shift.
– This protects the education corpus from sudden market falls.
» Which App Is Better
– The app is less important than the investment process.
– Since you are investing through an AMFI-registered MFD, regular plans can be considered.
– Regular plans include professional support and portfolio monitoring.
– Your MFD can also help with nominee and documentation matters.
– Avoid selecting funds only because an app shows low costs.
– The lowest cost does not always mean the best overall solution.
» Do Not Over-Diversify
– Four funds are sufficient for your present SIP.
– Adding ten or fifteen funds will not improve diversification much.
– It can instead make portfolio monitoring difficult.
– Focus on fund quality, consistency and portfolio overlap.
» Protection For Rajbir's Goal
– Keep an emergency fund separately from this education SIP.
– Do not use the education portfolio for regular family expenses.
– Keep adequate life insurance for the earning parent.
– Maintain suitable family health insurance too.
– These protections help keep the SIP running during emergencies.
» Final Insights
– Rajbir has a useful time advantage because he is only four.
– Start with Rs.15,000 if that is comfortable today.
– Increase towards Rs.20,000 as your income improves.
– Keep equity exposure high during the early years.
– Gradually reduce risk before the education goal arrives.
– Stay disciplined and avoid reacting to market noise.
– This approach gives Rajbir a strong financial foundation for his future.
Best Regards,
K. Ramalingam, MBA, CFP,
AMFI-Registered MFD – ARN 4188
www.holisticinvestment.in
https://www.linkedin.com/in/ramalingamcfp/
Question by Simharaj on Jun 15, 2023English
