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Retiree with 10 cr looking for passive income and long-term growth

Janak

Janak Patel  | Answer  |Ask -

MF, PF Expert - Answered on Mar 07, 2025

Janak Patel is a certified financial planner accredited by the Financial Planning Standards Board, India.
He is the CEO and founder of InfiniumWealth, a firm that specialises in designing goal-specific financial plans tailored to help clients achieve their life goals.
Janak holds an MBA degree in finance from the Welingkar Institute of Management Development and Research, Mumbai, and has over 15 years of experience in the field of personal finance. ... more
BK Question by BK on Feb 24, 2025Hindi
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Hi, I have 10 CR new surplus coming in next 6-12 months. I have worked hard and would like to take it easy at this point. I would like this corpus to last in perpetuity and leave behind a good amount for kids. I would like to invest this in a way that delivers 3 lakh per month inflation ( assume 5-6%) adjusted income and also grow the portfolio/corpus in longer run. Assume that this portfolio will be there for ever for next generations as well. Please advise a) if this is possible b) If the 3 lakh / per month expectation is too high/low c) provide details how I should approach this. d) Would you be able to prioject based on practical experience how much it will be in 30 years time. Thanks so much

Ans: Hi BK,

The queries you have raised are simple but the the solutions to them can be many. I will cover the important ones - your main objectives of regular monthly income and also have a corpus that you can leave behind.

So before my response I will make a few assumptions along with your inputs
1. You want to have 3 Lakh per month income to be adjusted by inflation each year.
2. You expect to receive above income for the next 30 years.
3. Return on the corpus invested will be an average of 10% pa.
4. Corpus to last beyond 30 years for your children.
5. No other dependencies to be serviced through your corpus.

Response a) Yes it is very much possible.

Response b) 3 lakh per month has to take into account your lifestyle expenses. It may seem too high for someone or too low for another, so its more relevant for you to measure it against your own expenses today. Do note that with time, and also as you indicated you want to take it easy, this number if its valid today may change once you take it easy.

Response c)
One of the simple solution to achieve your goals/objectives can be to split your 10 crore corpus into 2 amounts and invest them separately.
1. Invest 5.5 crore in Mutual fund schemes - you can further split this into 2~3 schemes for diversification and risk management. Consider between Conservative hybrid, Balanced advantage and Aggressive hybrid funds which can provide an annual average return of 10% (consolidated).
After a year of staying invested, start a SWP (systematic withdrawal plan) from these MF schemes to withdraw 3 lakhs per month and there after increase this by 5% every year.
This corpus will last you between 25 to 30 years.
2. Invest the remaining 4.5 crore separately in Mutual fund schemes - again this can be put into a portfolio of different schemes. This needs to be well balanced for investment for the next 30 years. This is where the long time duration of investment can permit you to take a bit of risk and generate good wealth.
At an average of 10% to 12% returns on the portfolio, expect the portfolio value to be between 78 crore and 125 crore after 30 years.

Response d) Projections provided above with assumed rate of returns.

Please note in the above, tax implications have not been taken into account. Also some important and crucial aspects need to be considered - health insurance being the primary one. You should get yourself a good health cover for the remainder of your life, if you have one, check if it needs to be enhanced or if its sufficient.
Hence I would recommend, you to hire/consult a Certified Financial Planner who can help you build your portfolio with recommended products and schemes that will meet your objectives. A CFP can provide a customized plan to achieve your goals and will also provide you alternatives/options and highlight the pros/cons for each.

Thanks & Regards
Janak Patel
Certified Financial Planner.
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  |8934 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2024

Asked by Anonymous - May 05, 2024Hindi
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Hi sir, I am 33.5 years old and want to built a corpus of 5 crore by the age of 40. My current investment are: Mutual funds - 37 lac Fixed deposits of around 50 lac PPF - 25 lac Gold and Gold bonds - 20 lac Indian stocks - 1 lac mainly HDFC US stocks - 7 lac mainly etfs This is my and my wifes combines portfolio For next 6.5 years we will be investing in Sip - 2 lac per month PPF - 25k per month Sovereign Gold - 12g every year Nifty 50 etf niftybees 30k per month only days when market is down. Please guide me.
Ans: It's impressive to see your proactive approach towards building wealth and securing your financial future. With a well-diversified portfolio and a systematic investment plan in place, you're on the right track to achieve your goal of reaching a corpus of 5 crore by the age of 40.

Your current investment mix demonstrates a balanced approach, encompassing various asset classes like mutual funds, fixed deposits, PPF, gold, and stocks, both domestic and international. Diversification is key to managing risk and maximizing returns over the long term.

Continuing with your SIPs, PPF contributions, and sovereign gold investments will further strengthen your portfolio's foundation. SIPs in equity mutual funds provide exposure to the equity market, offering the potential for higher returns over time. PPF and sovereign gold investments offer stability and act as a hedge against market volatility.

Your strategy of investing in Nifty 50 ETF during market downturns is commendable as it allows you to capitalize on market opportunities and accumulate units at lower prices, potentially enhancing your long-term returns.

Active vs. Passive Management:
While you've included both actively managed mutual funds and index funds (ETFs) in your portfolio, it's important to understand the differences between the two. Actively managed funds aim to outperform the market through active stock selection and portfolio management, while index funds passively track a specific index's performance.

Benefits of Actively Managed Funds:
Actively managed funds offer the potential for higher returns compared to index funds, especially during market inefficiencies or when skilled fund managers can identify lucrative investment opportunities. Additionally, active management allows for flexibility in portfolio construction and adjustments based on market conditions.

Potential Disadvantages of Index Funds:
While index funds offer low expense ratios and broad market exposure, they may lack the potential for outperformance compared to actively managed funds. Additionally, they're subject to tracking error, which occurs when the fund's performance deviates from the index it's designed to replicate.



Regularly review your portfolio's performance and rebalance as needed to ensure alignment with your financial goals and risk tolerance. Consider consulting with a Certified Financial Planner (CFP) to fine-tune your investment strategy and address any specific concerns or objectives you may have.

Stay disciplined with your savings and investment approach, and continue to monitor market trends and economic indicators. With patience, perseverance, and prudent financial management, you're well-positioned to achieve your target corpus by the age of 40.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8934 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 15, 2025

Asked by Anonymous - Feb 15, 2025Hindi
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We are a family of three (me + my parents). I am 30 and have no plans on getting married. Will explore spirituality and try to be a social worker after working for 2-3 more years. We have a corpus of Rs. 1.1 cr invested in FDs. The interest generated (Rs. 8,00,000 p.a.) is withdrawn monthly and used for daily expenses. Please tell me - 1. How long can my corpus last if we keep withdrawing the same amount each year? 2. Is there a need to add more money in corpus? 3. How will inflation hurt and play a role?
Ans: Your situation is well-structured, and your financial discipline is impressive. Let’s break down your concerns step by step.

1. How Long Will the Corpus Last?
You have Rs 1.1 crore in fixed deposits (FDs).

Your annual withdrawal is Rs 8 lakh, covering living expenses.

The duration your corpus lasts depends on the FD interest rate and inflation.

If the interest earned matches your withdrawals, the corpus remains intact.

But if expenses rise due to inflation, the corpus may start depleting.

If inflation is higher than your FD interest rate, the corpus will shrink faster.

Over time, this gap can significantly reduce your savings.

Without additional earnings or reinvestment, depletion becomes inevitable.

A detailed cash flow analysis is necessary for exact projections.

2. Is There a Need to Add More Money?
Your current strategy works well for now.

But inflation will increase expenses each year.

FD interest rates may also decline in the future.

A 25-year time frame requires careful planning.

If expenses rise but income stays the same, your corpus may not last.

Having an extra financial buffer is always good.

You may need to add funds over time to sustain withdrawals.

Consider a mix of investment options for better returns.

Balancing risk and stability is key for long-term security.

3. The Role of Inflation
Inflation reduces the value of money over time.

What costs Rs 50,000 today may cost Rs 1 lakh in 15-20 years.

If expenses double, your withdrawals must also double.

But your FDs may not generate enough interest to support this.

Over time, the real value of your corpus declines.

This means either increasing your corpus or reducing expenses.

Investing in assets that beat inflation can help.

A financial plan with regular reviews is necessary.

4. Fixed Deposits – Strengths and Weaknesses
FDs offer stability and guaranteed returns.

But they may not keep up with inflation in the long run.

Tax on FD interest further reduces net earnings.

Interest rates fluctuate and may decline in the future.

Over-reliance on FDs can erode wealth over time.

A diversified investment plan is essential.

5. Alternative Investment Strategies
You can explore better investment options alongside FDs.

Actively managed mutual funds have the potential for higher returns.

Debt mutual funds offer stability with tax efficiency.

Some portion in balanced hybrid funds can manage risk well.

Conservative investment in gold can hedge against inflation.

Having multiple sources of income is always better.

Choosing the right mix of investments is crucial.

6. Steps to Strengthen Financial Security
Review expenses and identify areas for cost-cutting.

Maintain an emergency fund for unexpected needs.

Consider reinvesting some interest earnings to grow the corpus.

Diversify investments instead of relying only on FDs.

Keep track of inflation and adjust withdrawals if needed.

Reassess the financial plan every year.

7. Impact of Taxes on Your Income
FD interest is fully taxable as per your income slab.

High taxation reduces the effective return on FDs.

Some alternative investments offer better tax efficiency.

Choosing tax-efficient options helps preserve more wealth.

8. Planning for Spiritual and Social Work Phase
After 2-3 years of work, your income may stop.

Your corpus must fully support expenses post-retirement.

Ensuring a steady income source is essential.

Passive income streams like dividend-yielding investments can help.

Reducing lifestyle costs can make funds last longer.

Proper financial discipline is crucial for long-term sustainability.

9. Final Insights
Your financial setup is strong, but long-term risks exist.

Inflation, tax impact, and lower FD rates can hurt corpus longevity.

A well-diversified portfolio will offer better security.

Regular financial reviews help in adjusting to changing needs.

Adding funds to your corpus ensures stability for the future.

Prudent planning today ensures a worry-free tomorrow.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8934 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 18, 2025

Asked by Anonymous - Jun 18, 2025
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Hi, I am 57+ years old with 2 yrs left for retirement from pvt firm. My take home salary is 2.15L after tax, corporate insurance and VPF deduction. I have accumulated 2cr in PF, 40 L in PPF, 20 L in FD, 40 L in retiral benefits when due. SIP of monthly10k in Equity MF started recently valued at only 5L. Own house, 40k loan monthly emi ending just before retirement. Self and family sufficiently insured . Monthly expense 1.8L . Eligible for 1L pension post retirement. I need to ensure a total retirement corpus of 5 cr by next 2 yrs. Fall in Single income bracket. Pls advise.
Ans: You have already taken some key steps in the right direction. Let me guide you towards achieving your Rs 5 crore corpus goal with a structured, 360-degree plan. This advice comes with your short 2-year time frame, income flow, and existing assets in mind.

Current Financial Snapshot – Assessment

You are already on a stable base:

Age: 57+ years, 2 years from retirement.

Monthly net salary: Rs 2.15 lakh.

Existing savings:

PF: Rs 2 crore.

PPF: Rs 40 lakh.

FD: Rs 20 lakh.

Retiral benefits (due at retirement): Rs 40 lakh.

MF SIP (started recently): Rs 5 lakh value, Rs 10,000/month.

EMI of Rs 40,000 ending just before retirement.

Own house – no rent burden.

Monthly expense: Rs 1.8 lakh.

Post-retirement pension: Rs 1 lakh/month.

Well-insured family and self.

This gives a very good head-start. You are already financially disciplined. Your lifestyle is well-planned. You are consistent in saving. But the target of Rs 5 crore in 2 years is slightly tight. So, every rupee now must work harder.

Goal Feasibility – Analysis of Rs 5 Crore Target

Let’s review if this goal is realistic:

Current accumulated wealth: Rs 3.05 crore (PF + PPF + FD + MF).

Retiral benefits in 2 years: Rs 40 lakh more.

Total likely corpus in 2 years without new investments: Rs 3.45 crore.

Gap to Rs 5 crore: Rs 1.55 crore.

Your income surplus is approx. Rs 35,000 per month (Rs 2.15 lakh income – Rs 1.8 lakh expense – Rs 40,000 EMI). EMI will stop in 2 years. That will free more cashflow, but not now. With just Rs 35,000/month savings, achieving Rs 1.55 crore extra in 2 years needs very high returns. That is not advisable near retirement.

Hence, you need:

Clear cost management.

Smarter savings redirection.

Enhanced allocation in high potential assets.

Realistic goal adjustment if needed.

Action Plan – Smart Steps for Next 2 Years

Let us now break down what to do.

1. Re-align Your Monthly Budget
Current surplus is Rs 35,000/month.

Cut monthly lifestyle spend from Rs 1.8 lakh to Rs 1.5 lakh.

Free up Rs 65,000+ per month for investments.

This increase is key to reach your Rs 5 crore goal.

2. Increase Equity Exposure Strategically
You started SIP in equity MF. Good beginning.

Rs 10,000/month is very low for your goal.

Increase it to Rs 50,000/month if possible.

Invest in well-managed diversified mutual funds.

Use regular plans through a Certified Financial Planner.

Avoid direct plans. They offer no guidance or risk management.

Regular plans allow you access to a certified MFD + CFP support.

This handholding is vital at your stage.

Disadvantage of Direct Plans:

No portfolio review.

No exit strategy support.

No emotional handholding in market volatility.

You might choose wrong funds.

Saving 0.5%-1% fee is not worth big risk at this stage.

Instead, pay a small trail fee and get full guidance. That is safer and more profitable in the long run.

3. Lumpsum Allocation from FD + PPF
PPF and PF are debt-heavy.

FD returns are taxable and low.

You need growth assets now.

Action:

Move Rs 10 lakh from FD into 2 lumpsum tranches of Rs 5 lakh each.

Use them in equity mutual funds via Systematic Transfer Plan (STP).

STP gives gradual market exposure.

This protects you from sudden market crashes.

PPF: Continue till maturity. Don’t break. It's safe and tax-free.

FD: Don’t increase allocation. Use only as emergency buffer.

4. Retiral Benefits to Be Invested Wisely
Rs 40 lakh expected on retirement.

Don’t keep it in savings account or FD.

Split into 2 parts:

Rs 15 lakh into hybrid or balanced mutual funds.

Rs 25 lakh in short duration debt mutual funds for 2–4 year needs.

Use mutual funds, not bank products.

Bank products give lower return and are taxable. Mutual funds give better growth and flexibility.

5. Monthly SIP Discipline and Staggering
Increase SIP gradually each quarter if possible.

Target Rs 75,000–80,000/month within 12 months.

Use diversified equity mutual funds across large, mid and flexi-cap categories.

Avoid sector funds or thematic funds. Too risky.

Avoid index funds:

No active management.

Cannot avoid loss in falling markets.

Underperforms in sideways or volatile markets.

Lack flexibility and safety in retirement stage.

Advantage of actively managed funds:

Can shift to cash or debt when needed.

Expertly curated by experienced fund managers.

Less risk in volatile times.

This is important for your risk profile.

Post Retirement Strategy – Manage Withdrawal and Income Smartly

After retirement:

Monthly pension: Rs 1 lakh.

Your current monthly need: Rs 1.8 lakh.

Monthly gap: Rs 80,000.

So, your corpus should generate Rs 80,000/month = Rs 9.6 lakh/year.

Step-by-step plan:

Use debt and hybrid funds to generate fixed withdrawals.

Use equity fund growth for long-term needs.

Keep 1 year of expenses in ultra short-term fund.

Replenish it every 12 months from equity/debt growth.

Don’t withdraw from equity funds in loss phase.

Use buffer funds instead. This avoids selling in down markets.

Tax Impact Planning – Avoid Surprises

Equity mutual fund long term capital gain (LTCG) over Rs 1.25 lakh is taxed at 12.5%.

Short term gains (STCG) taxed at 20%.

Debt mutual funds taxed as per your slab.

Plan redemptions carefully with your CFP.

Spread out withdrawals to reduce tax burden.

Avoid fixed deposits for income. They are taxed at your slab rate.

Emergency and Contingency Plan

Keep Rs 10 lakh in liquid fund or ultra-short duration debt fund.

This is for health emergency or family needs.

Don’t touch your retirement corpus for this.

Emotional and Family Considerations

Talk to spouse and family about spending reduction for next 2 years.

Avoid lifestyle upgrades.

No unnecessary gifting or lending.

Involve family in investment discussions.

This helps them manage better later.

What Not to Do Now

Don’t invest in real estate. It lacks liquidity.

Don’t buy new insurance policies.

Don’t invest in NPS or ULIPs now.

Don’t go for annuities. Poor returns and no growth.

Don’t keep big cash in bank FDs.

Finally – Key Insights and Recommendations

Rs 5 crore goal is possible with smart moves.

Cut spending. Increase savings.

Use equity mutual funds more.

Avoid FDs and other low-yield products.

Work closely with a Certified Financial Planner.

Avoid emotional investing decisions.

Keep health insurance active always.

Build a withdrawal strategy from day one after retirement.

Revisit and re-balance portfolio every 6 months.

Protect capital. Grow smartly. Spend wisely.

Your financial discipline is already strong. With better strategy, the final stretch will be successful.

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

...Read more

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Hi Sir, Good morning. My son got in admission VIT AP branch Mechanical Engineering(Robotics) in cateagery 1 and Sastra University is alloted Stream-1 Rank 18678 & Stream-2 Rank 8447. Also i paid Rs:20000/-for regstering seat in Next wave (NIAT). They alloted seat in Sanjay Godhavath University, Kolhapur, Maharstra for CSE AI&ML and In TS EAMCET he got Rank 27827. Please suggest which college need to join? after BTech he planned to persuing MS AI&ML in abroad. Please advise me Sir where he need to join in BTech programme.
Ans: Uma Madam, VIT-AP’s Mechanical Engineering (Robotics) offers 90% placement consistency, specialized robotics labs and global collaborations, making it strong for a core?engineering foundation. SASTRA University’s CSE Streams yield 95.6% overall placements, active AI/ML research centres and strong internship pipelines, with Stream-2 (Rank 8,447) more secure than Stream-1(18,678). Sanjay Ghodawat University’s CSE AI&ML reports 75%–90% placements, emerging AI labs and regional industry ties but lower recruiter density than SASTRA. TS EAMCET rank 27,827 secures limited state options. For an MS in AI&ML abroad, a robust AI curriculum and research exposure at SASTRA Stream-2 outshine other offers, followed by VIT-AP for its technical rigor. Recommendation: Join SASTRA University Stream-2 for AI&ML, with VIT-AP Mechanical as a strong fallback for robotics focus. All the BEST for the Admission & a Prosperous Future!

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Hello Sir, I have been allotted Integrated MSc Food Science and Technology at VIT Vellore, but I am also considering doing a BSc in Computer Science. I am confused about which path would be better for my future career. Also, I come from a financially lower background, so I want to choose a course that will give me better career opportunities, job stability, and help me support my family early. Kindly guide me and suggest which option would be better for my situation. Thank you.
Ans: Mohammed, Choosing Integrated M.Sc. in Food Science & Technology at VIT Vellore offers specialization in food processing, quality control, R&D and regulatory roles across FMCG, dairy and government sectors, with placement eligibility from the 5th year and typical placement rates for food technology grads reaching 80–90% in similar institutes. A B.Sc. in Computer Science delivers broader IT roles—software developer, web engineer, data analyst, cybersecurity specialist—with freshers’ employability near 85–95% across recruitments by major tech firms like TCS, Infosys, and Cognizant. Food science careers often require a master’s for core research, whereas B.Sc. CS secures entry-level IT roles immediately after three years. Given limited financial resources and need for early income, B.Sc. CS enables quicker campus placement participation, diverse job profiles and higher early-career hiring flexibility, whereas Food Science placements commence later and may involve internships before securing permanent roles. Recommendation: pursue B.Sc. Computer Science for faster employability, diverse entry-level opportunities and earlier financial support for family needs. All the BEST for the Admission & a Prosperous Future!

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Asked by Anonymous - Jun 16, 2025
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My son has admiision in Amity mohali in B tech CSE Data science . Is Amity Mohani is goodoption
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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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