Hi Sir, I have inherited 6-8 lakhs. I am a freelancer and have 3 yr son. I want a monthly income plus want the money to grow. Please guide.
Ans: You are taking a responsible step for your financial future and your child’s well-being. Let us now explore a 360-degree financial action plan for you. This plan will help you get regular income while growing your money steadily.
Let’s begin with a clear and simple approach.
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Know Your Core Financial Needs
You need a regular monthly income. You also want growth for the future.
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Your investment must support you now. It must also secure your child’s future.
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Your capital must be safe. It should not be locked or misused.
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You must stay protected from sudden financial shocks.
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This needs careful planning. You cannot take random investment decisions.
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Understand the Money You Have
You received Rs. 6 to 8 lakhs as inheritance.
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This is a one-time opportunity. You must treat it with care and purpose.
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As a freelancer, your income is variable. So, stability is very important.
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You should use this corpus to balance risk, income, and growth.
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This money should reduce your stress. It should not become another pressure.
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Split the Money Into Two Buckets
Use Bucket 1 for monthly income. This is your stability base.
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Use Bucket 2 for long-term growth. This is for your child and future.
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For example, from Rs. 8 lakhs, keep Rs. 3 lakhs in Bucket 1.
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Keep Rs. 5 lakhs in Bucket 2 for growth.
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Do not mix both buckets. Use each with full clarity.
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Build Monthly Income (Bucket 1)
Put Rs. 3 lakhs in low-risk income options.
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Choose options that give monthly income without capital loss.
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You can consider options like short-term mutual funds through a Certified Financial Planner.
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Use systematic withdrawal plan (SWP) to get regular monthly income.
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Avoid using dividend options. They lack predictability and control.
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Avoid annuity products. They block your capital and give low returns.
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Keep money in SWP with a 3–5 year view. Review it every year.
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Grow Money for Your Child (Bucket 2)
Use Rs. 5 lakhs for long-term growth. This is for your 3-year-old child.
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Invest in actively managed mutual funds through a CFP-backed MFD.
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Stay away from direct mutual funds. They do not give regular guidance.
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Without guidance, you may lose direction during market volatility.
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A regular plan with portfolio tracking, goal-based changes, and reviews is key.
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Avoid index funds. They may look cheap but give average returns.
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Actively managed funds can beat markets. Index funds just follow it.
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Use flexicap, midcap, or large and midcap fund categories.
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Do not touch this bucket for next 10 years. Let it grow with power of compounding.
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Emergency Backup Plan
Keep 3 to 6 months of expenses in savings or liquid fund.
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This emergency fund gives peace during low freelance income months.
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Without emergency funds, you may break growth investments.
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Emergency backup is not optional. It is a must.
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Secure Yourself with Insurance
Take health insurance of at least Rs. 5 lakhs.
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Do not depend only on savings for medical needs.
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One illness can break your financial plan completely.
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Also take term insurance if you have financial dependents.
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Term insurance is low cost. It protects your child’s future if something happens to you.
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Monthly Income Through SWP – Simple Strategy
Choose a suitable mutual fund with low volatility.
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Invest Rs. 3 lakhs in it through a Certified Financial Planner.
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Start withdrawing Rs. 4,000–5,000 per month.
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This gives you steady income. Your capital also grows slowly.
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Review once a year to check returns and adjust withdrawals.
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Do not stop growth investing in other bucket even if income is needed.
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Continue Freelance Income Planning
Keep aside small savings every month.
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Try building SIPs of Rs. 2,000–5,000 monthly when income allows.
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Invest surplus income in your child’s goal fund.
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Automate the savings so that you stay consistent.
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Avoid frequent changes. Let long-term plans stay intact.
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Review Investment Every 6–12 Months
Meet your Certified Financial Planner every year.
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Review your income, child’s goal progress, and safety fund.
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Adjust portfolio as per changing income or family needs.
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If income increases, move more funds to growth bucket.
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Do not make sudden decisions due to market news.
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Avoid Emotional Financial Decisions
Do not invest in schemes that promise fast income.
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Avoid friends and relatives’ advice that is not goal-linked.
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Avoid buying real estate for rental income. It locks funds and needs maintenance.
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Do not invest in annuities. They give low returns and no flexibility.
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Say no to index funds. They are passive and don’t suit long-term goal changes.
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Avoid direct funds. Stay with regular funds through CFP-supported MFDs.
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Protect Your Child’s Future
Start a separate goal plan for child’s education.
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A small SIP now will build a big corpus in 15 years.
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Keep this money untouched. It is not for regular income.
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Tell your Certified Financial Planner about this specific goal.
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Add small amounts whenever you get surplus from freelance work.
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Think Ahead
Plan next 5 years with income, growth, and protection.
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Next 10 years must focus on child’s education planning.
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From 15th year onwards, you will have a matured education fund.
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After that, shift focus to your own retirement.
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Step by step planning brings balance and peace.
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Finally
You have inherited Rs. 6–8 lakhs. This is a big opportunity. Use it wisely.
Use part of it for monthly income with SWP. Use the rest for growth.
Avoid emotional or risky investments. Avoid direct funds and index funds.
Actively managed funds through MFDs with CFP support give better results.
Build an emergency fund. Keep insurance in place.
Keep investments and income balanced. Stick to the plan.
Review often. Adjust carefully. Think long-term.
Your son’s future and your peace of mind will depend on what you do today.
Start simple. Stay consistent. Avoid shortcuts.
This small corpus can bring big life changes when managed the right way.
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Best Regards,
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K. Ramalingam, MBA, CFP,
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Chief Financial Planner,
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www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by N on Oct 21, 2023English
