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43-Year-Old Asks: Can I Build a Rs.10-12 Crore Retirement Corpus?

Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Jul 17, 2024Hindi
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Hi Mam, I'm 43+, Monthly take home is around 3.20 Lacs, Currently i have invested in Shares (Current Portfolio is around 1.75 Crs). EMI is around 1.1 lacs P/m (Home loan 1 - 50K per month till 2037, 30K car loan till 2027 (Planning to close this year by paying 13 lacs, please suggest if this option of preclosure is good or EMI is good, will be paying this amount by selling some shares), 30k per month of home 2 till 2040., Recently i have started investing in SIP 1 lacs P/M, and balance 1.20 lacs goes in house, kids education expense. Have EPF balance of 40 lacs as on date. As mentioned above recently i have started investing in SIP (From Oct 2023 onwards), which is at the tune of 1 lacs per month. SIP are Franklin India Prima Fund regular Plan - Growth - 25K, ICICI Prudential Small cap fund retail plan G - 25K, Kotak Multicap fund regular plan growth - 15K, DSP Blackrock mid cap fund regular plan growth - 10 K, and Parag Parikh Flexi Cap fund - Regular plan growth - 25 K. Will increase the SIP investment by 10% every year going forward. Sir, My question is with current SIP investment will i be able to generate 10~12 Cr corpus fund by retirement (Assuming that i will be in Job and working for next 15 years). Current Share portfolio is for long term investment only (assuming i get 12~15% of return every year). Please note : will be spending around 1~1.5 cr for my Son education in engineering from 2027 to 2031, 50% will be spend from savings and balance 50% from education loan.

Ans: Financial Snapshot
Age: 43+
Monthly Take Home Salary: Rs 3.20 lakhs
Current Investment in Shares: Rs 1.75 crores
EMI Payments: Rs 1.1 lakhs per month
Home Loan 1: Rs 50,000 till 2037
Car Loan: Rs 30,000 till 2027 (planning to close this year)
Home Loan 2: Rs 30,000 till 2040
Monthly SIP Investment: Rs 1 lakh (started Oct 2023)
Monthly Household and Education Expenses: Rs 1.20 lakhs
EPF Balance: Rs 40 lakhs
Expected Expenses for Son's Education: Rs 1-1.5 crores (2027-2031)
Assessing Current Investments
Share Portfolio:

Value: Rs 1.75 crores
Assumed Annual Return: 12-15%
Long-term growth potential is strong. Continue holding for compounding benefits.
SIP Investments:

Started in Oct 2023
Current SIP of Rs 1 lakh per month in a diversified mix of funds
Analyzing Loan Preclosure Option
Car Loan Preclosure:

Current EMI: Rs 30,000 per month till 2027
Preclosure Amount: Rs 13 lakhs (consider selling some shares)
Pros of Preclosure:

Reduces monthly EMI burden
Saves interest costs
Cons of Preclosure:

Selling shares might impact portfolio growth
Evaluate if share sale aligns with long-term goals
Recommendation:

If interest rate on car loan is high, preclosure can be beneficial.
Ensure share sale does not significantly affect long-term portfolio growth.
Evaluating SIP Investments
Current SIP Allocation:

Franklin India Prima Fund: Rs 25,000
ICICI Prudential Small Cap Fund: Rs 25,000
Kotak Multicap Fund: Rs 15,000
DSP Blackrock Mid Cap Fund: Rs 10,000
Parag Parikh Flexi Cap Fund: Rs 25,000
Plan to Increase SIP by 10% Annually:

This is a good strategy. It helps to combat inflation and increase your corpus over time.
Active vs. Index Funds:

Advantages of Actively Managed Funds:
Potential to outperform market
Professional management
Disadvantages of Index Funds:
Passive tracking of the market
No chance to outperform during market rallies
Projected Retirement Corpus
Assumptions:

Monthly SIP: Rs 1 lakh (increasing by 10% annually)
Investment Horizon: 15 years
Average Annual Return: 12-15%
Projection:

Estimated Corpus at Retirement:
With a 12% annual return: Approximately Rs 10-12 crores
With a 15% annual return: Potentially higher than Rs 12 crores
Financial Planning for Son's Education
Expected Expenses:

Rs 1-1.5 crores over 4 years (2027-2031)
Plan to use 50% savings and 50% education loan
Recommendation:

Start a dedicated education fund
Consider balanced or hybrid funds for stability and growth
Ensure this fund aligns with the investment horizon and risk tolerance
Final Insights
Your current investment strategy is strong.
Increasing SIP contributions annually is a prudent move.
Evaluate the car loan preclosure option based on interest rates and long-term goals.
Maintain a diversified portfolio to balance risk and growth.
Regularly review your investments with a Certified Financial Planner to stay on track.
By following these steps, you should be well-positioned to achieve a corpus of Rs 10-12 crores by retirement. Additionally, planning for your son's education expenses with a dedicated fund will ensure financial stability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2024

Asked by Anonymous - Apr 12, 2024Hindi
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Hi Sir, I'm 43+, Monthly take home is around 3.20 Lacs, Currently i have invested in Shares (Current Portfolio is around 1.55 Crs). EMI is around 1.1 lacs P/m, Recently i have started investing in SIP 1 lacs P/M, and balance 1.20 lacs goes in house, kids education expense. Have EPF balance of 40 lacs as on date. As mentioned above recently i have started investing in SIP (From Oct 2023 onwards), which is at the tune of 1 lacs per month. SIP are Franklin India Prima Fund regular Plan - Growth - 25K, ICICI Prudential Small cap fund retail plan G - 25K, Kotak Multicap fund regular plan growth - 15K, DSP Blackrock mid cap fund regular plan growth - 10 K, and Parag Parikh Flexi Cap fund - Regular plan growth - 25 K. Will increase the SIP investment by 10% every year going forward. Sir, My question is with current SIP investment will i be able to generate 8~10 Cr corpus fund by retirement (Assuming that i will be in Job and working for next 15 years). Current Share portfolio is for long term investment only (assuming i get 12~15% of return every year).
Ans: Analysis of Retirement Corpus Target

Considering your current financial situation and investment strategy, let's evaluate whether your SIP investments can help you achieve a corpus of 8-10 crores by retirement in the next 15 years.

Assessment of Current Investments

Shares Portfolio: With a current portfolio value of 1.55 crores and assuming an annual return of 12-15%, your shares portfolio has the potential to grow significantly over the long term.

EPF Balance: Your EPF balance of 40 lakhs provides a solid foundation for retirement savings and adds to your overall retirement corpus.

SIP Investments: Your SIP investments totaling 1 lakh per month are diversified across various mutual funds, including Franklin India Prima Fund, ICICI Prudential Small Cap Fund, Kotak Multicap Fund, DSP Blackrock Mid Cap Fund, and Parag Parikh Flexi Cap Fund. The plan to increase SIP investments by 10% annually demonstrates a commitment to long-term wealth accumulation.

Estimation of Future Corpus

To estimate the potential corpus accumulated through SIP investments, let's assume an average annual return of 12% over the next 15 years. With an initial SIP investment of 1 lakh per month and an annual increase of 10%, the future value of SIP investments can be calculated using a future value of annuity formula.

Considering the monthly SIP investments and their projected growth, you can accumulate a substantial corpus over the next 15 years. However, the final corpus will depend on various factors such as market performance, investment discipline, and economic conditions.

Assessment of Retirement Corpus Target

Achieving a corpus of 8-10 crores by retirement is ambitious but feasible with consistent savings, prudent investment decisions, and disciplined portfolio management. Your combined investments in shares, EPF, and SIPs demonstrate a proactive approach towards building wealth for retirement.

Recommendations

Regular Monitoring: Continuously monitor the performance of your SIP investments and shares portfolio. Periodically review your financial goals and adjust your investment strategy as needed to stay on track towards achieving your retirement corpus target.

Risk Management: Diversify your investment portfolio to manage risk effectively. Consider allocating assets across different asset classes such as equities, debt, and real estate to enhance portfolio resilience.

Professional Guidance: Consult with a Certified Financial Planner (CFP) to develop a comprehensive financial plan tailored to your specific needs, goals, and risk tolerance. A financial advisor can provide personalized recommendations and strategies to optimize your investment portfolio for long-term wealth accumulation.

With a disciplined approach to savings and investments, coupled with prudent financial planning, you can work towards achieving your retirement goals and securing a comfortable financial future for yourself and your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 15, 2024

Asked by Anonymous - Jul 08, 2024Hindi
Money
Hi Sir, I'm 43+, Monthly take home is around 3.20 Lacs, Currently i have invested in Shares (Current Portfolio is around 1.75 Crs). EMI is around 1.1 lacs P/m (Home loan 1 - 50K per month till 2037, 30K car loan till 2027 (Planning to close this year by paying 12 lacs, please suggest if this option of preclosure is good or EMI is good), 30k per month of home 2 till 2040., Recently i have started investing in SIP 1 lacs P/M, and balance 1.20 lacs goes in house, kids education expense. Have EPF balance of 40 lacs as on date. As mentioned above recently i have started investing in SIP (From Oct 2023 onwards), which is at the tune of 1 lacs per month. SIP are Franklin India Prima Fund regular Plan - Growth - 25K, ICICI Prudential Small cap fund retail plan G - 25K, Kotak Multicap fund regular plan growth - 15K, DSP Blackrock mid cap fund regular plan growth - 10 K, and Parag Parikh Flexi Cap fund - Regular plan growth - 25 K. Will increase the SIP investment by 10% every year going forward. Sir, My question is with current SIP investment will i be able to generate 8~10 Cr corpus fund by retirement (Assuming that i will be in Job and working for next 15 years). Current Share portfolio is for long term investment only (assuming i get 12~15% of return every year). Please note : will be spending around 80 lacs for my Son education in engineering from 2027 to 2031, 50% will be spend from savings and balance 50% from education loan.
Ans: It is commendable that you have a structured approach to your finances and investments. Let us delve into an in-depth analysis of your current financial situation and provide a detailed assessment of your future financial objectives, especially focusing on building a corpus of Rs 8-10 crores by retirement.

Current Financial Overview
Income and Expenses
Your current monthly take-home income is around Rs 3.20 lakhs. This is a healthy income, providing you with a good foundation to build your investments. With an EMI burden of Rs 1.1 lakhs per month, you have a significant portion of your income allocated towards debt repayment. It is essential to manage this debt efficiently to maximize your savings and investments.

Investment Portfolio
Your current investment portfolio is diversified across shares, SIPs, and EPF. Here is a quick breakdown:

Shares: Your long-term share portfolio is valued at Rs 1.75 crores.

SIPs: You have recently started SIPs of Rs 1 lakh per month across various funds. This is a positive step towards systematic investment.

EPF: Your EPF balance is Rs 40 lakhs as of now.

EMI Obligations
You have three major EMIs:

Home loan 1: Rs 50,000 per month till 2037
Car loan: Rs 30,000 per month till 2027 (with a plan to prepay Rs 12 lakhs)
Home loan 2: Rs 30,000 per month till 2040
Other Expenses
You have also accounted for household and educational expenses, which is Rs 1.20 lakhs per month. This ensures your family’s needs are met while you invest for the future.

Investment Strategy
SIP Investments
Your SIP investments are well diversified across different types of funds. This diversification helps in managing risks and achieving steady growth. Increasing SIP investments by 10% annually is a prudent strategy, ensuring that your investments grow with your income.

Long-term Share Investments
Assuming a 12-15% return per annum from your share investments, you are on a good path. Shares, being long-term investments, have the potential to provide significant returns, especially if chosen wisely.

EPF
Your EPF provides a secure and stable return, acting as a safety net for your retirement corpus. It is crucial to continue contributing to this fund as it offers tax benefits and compounded growth.

Debt Management
Prepaying Car Loan
Prepaying the car loan of Rs 12 lakhs can be a good decision. It will reduce your EMI burden by Rs 30,000 per month. With the car loan closed, you can redirect this amount towards your investments, accelerating your wealth creation.

Home Loans
Your home loans have a longer tenure, and given their current interest rates, it is advisable to continue with the EMIs. Home loans also provide tax benefits which should be considered.

Future Financial Goals
Retirement Corpus
To achieve a corpus of Rs 8-10 crores by the time you retire, it is crucial to stay disciplined with your investments. Assuming you continue working for the next 15 years, here are some key points to consider:

SIP Growth: Increasing your SIPs by 10% annually will significantly boost your corpus. Starting with Rs 1 lakh per month, your SIPs will grow to Rs 4.18 lakhs per month by the 15th year, assuming a 10% annual increment.

Compounded Growth: With an assumed annual return of 12%, your SIPs alone could potentially grow to Rs 5-6 crores in 15 years. Combined with your share portfolio and EPF, achieving an Rs 8-10 crores corpus is feasible.

Regular Review: Periodically review and rebalance your portfolio. This ensures that your investments are aligned with your goals and market conditions.

Child’s Education
You have planned Rs 80 lakhs for your son’s education, with 50% from savings and 50% from an education loan. This is a balanced approach, ensuring that you do not deplete your savings entirely. Education loans also come with tax benefits on the interest paid.

Risk Management and Insurance
Adequate Insurance
Ensure you have adequate life and health insurance. This protects your family and finances in case of unforeseen events. Evaluate your existing policies and consider additional coverage if necessary.

Emergency Fund
Maintain an emergency fund to cover at least 6-12 months of your expenses. This provides a buffer against unexpected financial shocks.

Tax Planning
Optimize Deductions
Maximize your tax-saving investments under sections 80C, 80D, and other relevant sections. This reduces your tax liability and increases your investable surplus.

Long-term Capital Gains
Plan your withdrawals and investments to optimize long-term capital gains. This involves holding investments for the required duration to benefit from lower tax rates.

Final Insights
Your current financial strategy is robust and well-planned. With disciplined investment and regular reviews, you are on track to achieve your retirement corpus of Rs 8-10 crores. Here are some final suggestions to ensure continued success:

Stay Informed: Keep yourself updated with financial markets and investment opportunities.

Seek Professional Advice: Periodically consult with a Certified Financial Planner to review your strategy and make necessary adjustments.

Focus on Goals: Stay focused on your long-term goals, avoiding impulsive financial decisions.

Your dedication and planning are commendable. With continued discipline and smart financial management, you are well on your way to a secure and prosperous retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 01, 2024

Asked by Anonymous - Sep 30, 2024Hindi
Money
Hi Mam, I'm 43+, Monthly take home is around 3.40 Lacs, Currently i have invested in Shares (Current Portfolio is around 1.50 Crs). EMI is around 1.2 lacs P/m (Home loan 1 - 50K per month till 2037, 30K car loan till 2027 (Planning to close this year by paying 13 lacs, please suggest if this option of preclosure is good or EMI is good, will be paying this amount by selling some shares), 30k per month of home 2 till 2040., Last year i have started investing in SIP 1 lacs P/M, and balance 1.20 lacs goes in house, kids education expense. Have EPF balance of 40 lacs as on date. As mentioned above recently i have started investing in SIP (From Oct 2023 onwards), which is at the tune of 1 lacs per month. SIP are Franklin India Prima Fund regular Plan - Growth - 25K, ICICI Prudential Small cap fund retail plan G - 25K, Kotak Multicap fund regular plan growth - 15K, DSP Blackrock mid cap fund regular plan growth - 10 K, and Parag Parikh Flexi Cap fund - Regular plan growth - 25 K. Will increase the SIP investment by 10% every year going forward. Sir, My question is with current SIP and shares investment will i be able to generate 10~12 Cr corpus fund by retirement (Assuming that i will be in Job and working for next 15 years). Current Share portfolio is for long term investment only (assuming i get 12~15% of return every year). Please note : will be spending around 60~70 cr for my Son education in engineering from 2027 to 2031, 50% will be spend from savings and balance 50% from education loan. Current value of house 1 - 1.35 Cr (EMI is 50K), House 2 Current Value is 82 Lacs (EMI is 30K).
Ans: You have a healthy financial profile, with significant investments in shares (Rs 1.50 crore) and a diversified portfolio of SIPs. Your monthly income of Rs 3.40 lakhs and ongoing EMI payments indicate a steady cash flow, but your future expenses, especially for your son’s education, require careful planning.

Here are key aspects to focus on:

Shares Investment: Rs 1.50 crore portfolio with long-term goals. If you can achieve a 12-15% return, this will grow significantly over the next 15 years.

SIPs: You have diversified well across mid-cap, small-cap, multicap, and flexi-cap funds. Increasing your SIP by 10% annually is a wise move to achieve compounding returns.

Debt: Your EMI obligations are Rs 1.2 lakh monthly, spread across three loans.

Home Loan and Car Loan Preclosure
You are considering preclosing your car loan by selling Rs 13 lakhs worth of shares. Here’s an evaluation of whether preclosure is the right decision:

Preclosure of Car Loan: Your car loan EMI is Rs 30,000 per month and will last till 2027. Prepaying Rs 13 lakhs now will save you interest, but given that car loans typically have a lower interest rate, you should assess if the shares you sell are likely to deliver a return greater than the interest saved. If you anticipate higher returns from your equity portfolio, continuing the loan might be beneficial.

Home Loans: Both home loans are long-term commitments (till 2037 and 2040). As real estate is appreciating, holding onto these loans may be financially sound, especially considering home loan tax benefits. But if you have surplus funds in the future, prioritizing the repayment of home loan 2 (lower value) could reduce your debt burden early.

SIP and Mutual Fund Investments
You’ve started a Rs 1 lakh SIP across different mutual funds. Here are some insights:

Current SIP Allocation: Your allocation is diversified, covering small, mid, and multicap funds, providing balanced exposure to market fluctuations. A yearly 10% increase in SIP will significantly boost your corpus.

Actively Managed Funds: Active funds, like the ones you’ve chosen, tend to outperform passive funds in Indian markets. You’ve avoided index funds, which can often underperform during volatile market conditions. Actively managed funds give you the advantage of fund manager expertise, especially in emerging markets.

Review Regularly: While your SIPs are a strong strategy, it’s essential to review their performance yearly. Ensure that underperforming funds are replaced with those providing consistent returns.

Targeting a Corpus of Rs 10-12 Crore by Retirement
With 15 years to retirement, your goal of accumulating Rs 10-12 crore is achievable with disciplined investing. Let’s evaluate the path forward:

Shares: Assuming a 12-15% annual return on your Rs 1.50 crore share portfolio, your wealth could grow significantly. Over 15 years, with a 12-15% return, this alone could amount to Rs 7-10 crore.

SIPs: A monthly SIP of Rs 1 lakh, growing by 10% annually, can generate a substantial corpus. Given the power of compounding and potential returns of 10-12%, your SIP investments could contribute Rs 4-6 crore by the time you retire.

Combining your SIP growth with your equity investments, you should comfortably reach your target of Rs 10-12 crore, provided markets perform as expected.

Planning for Son's Education Expenses
You’ve planned for your son’s engineering education, which is expected to cost Rs 60-70 lakhs. Here’s a breakdown of how to manage these expenses:

Savings and Loans: You plan to fund 50% of this amount from your savings and the rest from an education loan. Education loans can be a good option, as they provide tax benefits and can be repaid over time without straining your immediate cash flow.

Asset Allocation: As 2027 approaches, start setting aside a portion of your portfolio into less volatile assets (like debt mutual funds) to ensure that you have liquidity for these expenses without being forced to sell your shares at a loss.

EPF and Future Contributions
Your Rs 40 lakh EPF balance is a solid foundation for retirement. Continuing your EPF contributions for the next 15 years will ensure that you have a significant corpus by retirement, offering additional security. EPF provides a safe, tax-free, and stable return, complementing your more aggressive equity and mutual fund investments.

Liquidity and Emergency Fund
You are currently managing your expenses well, but liquidity is essential, especially as future expenses for your son’s education loom. It’s advisable to have an emergency fund that covers at least 6-12 months of expenses. This should be kept in a liquid fund or a high-interest savings account to ensure easy access.

Tax Planning
Given your high income, efficient tax planning will be essential to ensure that your wealth grows optimally:

Capital Gains Tax: Be mindful of the new capital gains tax rules when selling your shares or redeeming mutual funds. Plan your redemptions to optimize your tax outgo. The new taxation rates of 12.5% for LTCG and 20% for STCG will impact your returns.

Tax-Saving Investments: Ensure that you are making the most of tax-saving opportunities, such as the Rs 1.5 lakh deduction under Section 80C, tax benefits on home loan interest under Section 24, and the additional Rs 50,000 under Section 80CCD for NPS contributions.

Increasing SIP Investment
Your plan to increase SIP contributions by 10% annually is excellent. It will maximize the compounding effect and boost your retirement corpus significantly. Here's how it will benefit you:

Growing Contributions: Increasing SIPs every year ensures your investment keeps pace with inflation and your rising income. This disciplined approach will enhance your chances of meeting your retirement goal of Rs 10-12 crore.
Final Insights
With a well-balanced investment portfolio, strategic use of loans, and disciplined SIP contributions, you are on track to reach your financial goals. Here are some key takeaways:

Preclose the car loan if the interest saved outweighs the potential returns from your shares. Else, continue with the EMI.

Maintain your current SIP strategy, but review fund performance regularly. Consider reallocating underperforming funds.

Your target of Rs 10-12 crore by retirement is achievable with disciplined investing in shares and SIPs.

Keep liquidity in mind for your son’s education. Move a portion of your investments into safer assets as the expenses near.

Ensure adequate tax planning to minimize your liabilities and grow your wealth efficiently.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Milind

Milind Vadjikar  |741 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 15, 2024

Asked by Anonymous - Nov 14, 2024Hindi
Listen
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Hi Sir, I'm 43+, My Monthly take home is around 3.40 Lacs, Currently i have invested in Shares (Current Portfolio is around 1.40 Crs). EMI is around 1.2 lacs P/m (Home loan 1 - 50K per month till 2037, 30K car loan till 2027 (Planning to close this year by paying 13 lacs, please suggest if this option of preclosure is good or EMI is good, will be paying this amount by selling some shares), 30k per month of home 2 till 2040., Last year i have started investing in SIP 1 lacs P/M, and balance 1.20 lacs goes in house, kids education expense. Have EPF balance of 40 lacs as on date. As mentioned above recently i have started investing in SIP (From Oct 2023 onwards), which is at the tune of 1 lacs per month. SIP are Franklin India Prima Fund regular Plan - Growth - 25K, ICICI Prudential Small cap fund retail plan G - 25K, Kotak Multicap fund regular plan growth - 15K, DSP Blackrock mid cap fund regular plan growth - 10 K, and Parag Parikh Flexi Cap fund - Regular plan growth - 25 K. Will increase the SIP investment by 10% every year going forward. Sir, My question is with current SIP and shares investment will i be able to generate 10~12 Cr corpus fund by retirement (Assuming that i will be in Job and working for next 15 years). Current Share portfolio is for long term investment only (assuming i get 12~15% of return every year). Please note : will be spending around 60~70 Lacs for my Son education in engineering from 2027 to 2031, 50% will be spend from savings and balance 50% from education loan. Current value of house 1 - 1.35 Cr (EMI is 50K), House 2 Current Value is 82 Lacs (EMI is 30K).
Ans: Hello;

Kudos for holding judicious blend of assets in equity(stocks and MFs), real estate, EPF.

Your thought process is absolutely spot on. You should prepay the car loan through shares corpus and close the EMI.

If you maintain monthly sip of 1 L with yearly top-up of 10% for 15 years then you may accumulate a corpus of around 8.68 Cr.

Stock holding of 1.27 Cr(13 L considered to be deducted for car loan prepayment) is expected to grow into a sum of 5.31 Cr in 15 years.

EPF balance of 40 L will grow into a corpus of 1.27 Cr over 15 years. Fresh contributions, if any, will be bonus.

So cumulatively your total corpus at the end of 15 years from now will be 8.68+5.31+1.27=15.26 Cr.

Due to your sound financial planning you may not need education loan for son's education.

Modest return of 12%, 10% and 8% are considered from mutual funds, direct stocks and EPF respectively.

Happy Investing;

..Read more

Latest Questions
Milind

Milind Vadjikar  |741 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Dec 03, 2024

Listen
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What happens when a Mutual Fund company shuts down / gets sold off?
Ans: Hello;

If a mutual fund company gets sold or fails, the process is prescribed by SEBI:

In case MF company is Sold,
The new fund house may:
1. Continue the scheme with a new name and management.

2. Merge the scheme with similar funds and offer investors the option to exit without any exit load.

In case MF company shuts down,
The fund house will:
1. Pay out investors based on the fund's last recorded Net Asset Value (NAV) and the number of units the investor holds, after deducting expenses.

2. If the company is not in a position to do so then SEBI may liquidate the funds assets and distribute the proceeds to unit holders.

It is also pertinent to note that mutual fund regulation in India is one of the most stringent and hence best, from investor's point of view, globally.

This is not just in theory. We have seen how the Franklin Templeton abrupt closure of debt funds was handled with surgical precision, by SEBI, with no loss to unitholders.


Skin in the game regulation mandates that 20% salary of key mutual fund personnel and fund managers is paid in terms of units of their funds with a 3 year lock-in.

The stocks and bonds purchased by the AMC for the fund are held by a custodian, appointed by the trust that administers the fund.

The trust engages into a investment management agreement with the AMC for managing the fund as per their mandate and within regulatory guidelines.

Registrar and Transfer Agents handle the investor registration,kyc, maintaining records, providing account and tax statements etc.

Happy Investing;
X: @mars_invest

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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