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Ans: You are in a good position with a combined income of Rs. 1,62,000 per month. Your financial discipline with consistent investments is admirable. However, you have home loan and personal loan liabilities, which need to be considered when planning for long-term wealth creation. Let’s look at the current picture and devise a strategy to accumulate a corpus of Rs. 10 crore by age 60.

Income and Liabilities
Monthly Income: Rs. 75,000 (yours) + Rs. 87,000 (husband) = Rs. 1,62,000
Home Loan EMI: Rs. 40,000
Personal Loan EMI: Rs. 20,000
The total EMI outflow is Rs. 60,000 per month, which is a significant portion of your income. Paying off these loans as soon as possible should be one of your priorities, especially the personal loan. Personal loans tend to have higher interest rates than home loans, which means they drain more from your monthly budget.

Current Investments
Mutual Fund SIPs: Rs. 28,000 per month
It's excellent that you're consistently investing in mutual funds. However, the investment amount might not be enough to achieve your Rs. 10 crore goal within the given time frame.

Provident Fund (PF) Contributions: Rs. 25,000 per month (husband + wife)
You already have Rs. 40 lakh in your PF account, which is a great start. However, PF typically offers lower returns compared to equity-based investments, and relying too heavily on PF alone may not help achieve your ambitious goal of Rs. 10 crore.

Daughter’s Education Fund: Rs. 60,000 per year (corpus of Rs. 6.5 lakh)
Education expenses are an essential goal to secure your daughter’s future. It's crucial to invest this corpus wisely to ensure it grows over time, especially as education costs rise.

Goal of Rs. 10 Crore by Age 60
To reach Rs. 10 crore by the time you are 60 years old, you need to invest systematically in a portfolio that offers higher growth potential. Given that you have 20 years to build this corpus, equity-based instruments should be the core of your investment strategy.

Key Considerations
Loan Repayment
Paying off the home loan and personal loan is critical. As mentioned, personal loans have high-interest rates, so it’s better to clear this liability first. Home loans typically have lower interest rates, so they can be tackled later.

Monthly Investment Capacity
After clearing the loans, you will have more disposable income that can be channelized into investments. With your current income and considering the existing commitments, you are already investing a significant amount in mutual funds. Once the loans are cleared, this amount can be increased for higher growth.

Investment Strategy to Achieve Rs. 10 Crore
Step 1: Prioritize Loan Repayment
Personal Loan:
Pay off this loan as quickly as possible. Once this EMI is cleared, you will have Rs. 20,000 available for reinvestment each month.
Home Loan:
Although this EMI is higher, focus on making accelerated payments with any surplus funds after clearing the personal loan.
Step 2: Increase Monthly Investment in Mutual Funds
Current SIP Allocation: Rs. 28,000 per month
While you’re investing in mutual funds, the current SIP amount might not be enough to reach Rs. 10 crore. You should aim to gradually increase your SIP as your loan liabilities reduce. Here’s how you can proceed:

Increase SIP Post Loan Repayment: After paying off the personal loan and reducing the home loan EMI, you can redirect the freed-up funds into SIPs. For instance, if you allocate the Rs. 20,000 currently spent on the personal loan towards SIPs, you can increase your monthly SIP to Rs. 48,000 (Rs. 28,000 + Rs. 20,000).

Long-Term SIP Increase: As your income grows and your expenses reduce, try to increase the SIP amount by another Rs. 10,000-20,000 over the next few years.

Step 3: Diversify Mutual Fund Portfolio
Mid-cap and Small-cap Funds:
You already have exposure to equity markets, which is great. To maximize returns over the long term, focus on a mix of large-cap, mid-cap, and small-cap funds. Mid-cap and small-cap funds have higher risk, but they can potentially yield higher returns over the long term.

Hybrid and Balanced Advantage Funds:
These funds can offer a good mix of equity and debt, ensuring some stability to your portfolio. It would be ideal to allocate around 20-30% of your SIP towards these funds, especially during market volatility.

Sectoral and Thematic Funds:
Depending on your risk tolerance, you can add a small portion (5-10%) of sectoral funds like technology, FMCG, or healthcare. These funds can potentially outperform the broader market, but they come with higher risk.

Step 4: Increase Provident Fund Contributions
While PF is a safe investment, it offers lower returns compared to equity-based investments. However, since you already have a substantial amount in PF (Rs. 40 lakh), increasing your PF contributions gradually can be part of your strategy to secure a part of your retirement corpus.

Diversify PF Investments:
Although PF provides fixed returns, you can consider diversifying some portion of your retirement savings into other tax-advantaged options like National Pension System (NPS). NPS offers exposure to equity markets along with tax benefits.
Step 5: Invest in Tax-Advantaged Accounts
You may want to explore additional tax-saving instruments such as:

National Pension System (NPS):
NPS can be a good addition to your portfolio for retirement savings, especially because it offers tax deductions and exposure to equity markets. NPS also allows you to accumulate wealth while reducing your taxable income.

ELSS Funds:
Consider allocating a portion of your mutual fund investments towards Equity Linked Savings Schemes (ELSS) for tax benefits under Section 80C.

Step 6: Asset Allocation
To achieve long-term goals like a Rs. 10 crore corpus, your asset allocation should heavily favor equity, with about 60-70% invested in equity mutual funds (mid, small, and large-cap). You can keep 15-20% in hybrid or balanced advantage funds, and the remaining 10-15% can be in debt instruments or tax-saving funds.

Step 7: Regular Portfolio Rebalancing
Rebalancing:
Periodically review and rebalance your portfolio. If a particular fund has underperformed or become too volatile, consider shifting your allocation to better-performing funds.

Monitor Performance:
Regularly check the performance of your mutual fund investments. Based on the market conditions, you may need to make adjustments to your portfolio to maximize returns.

Step 8: Additional Investments
Other Options:
If you have additional savings after increasing your SIP and clearing the loans, you can consider diversifying into gold, international equity funds, or debt funds for stability.
Final Insights
You are on a strong path with disciplined investments, but to reach your goal of Rs. 10 crore by age 60, you will need to increase your investment significantly, especially in mutual funds. Prioritize clearing your loans, then focus on increasing your SIP amounts. A diversified portfolio with an emphasis on mid-cap, small-cap, and hybrid funds will help you achieve the required growth. Regular portfolio reviews, coupled with a disciplined approach, will ensure that you stay on track.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment