I am 19 th aged now and wants to retire with 10 cr at 35 age please suggest my investment instruments allocation please suggest me please anyone

Ans: Hello Sudhanshu & thanks for writing to me.

To create a corpus of Rs.10 Crore, you will need invest Rs.1.75 Lakh every month over the next 16 years to create your corpus. You can consider investing in a mix of small & mid cap funds for the first 10 to 12 years & then invest in a mix of large cap funds & hybrid funds that can offer stability to your portfolio.

Periodic rebalancing is essential to ensure you are on the right track.

Ans: Wanting to retire with a significant corpus at 35 is an ambitious goal! Here's a suggested investment strategy to help you achieve it:

Equity Investments (70-80%): Allocate a significant portion of your investments to equity for long-term growth potential. Consider diversified equity mutual funds or index funds for exposure to the stock market. Since you're comfortable with aggressive risk-taking, you can explore mid-cap and small-cap funds for higher growth potential.
Debt Investments (20-30%): Allocate a smaller portion to debt instruments like fixed deposits, bonds, or debt mutual funds for stability and capital preservation. This helps mitigate risk and provides a buffer during market downturns.
Systematic Investment Plan (SIP): Invest regularly through SIPs to benefit from rupee-cost averaging and the power of compounding over the long term.
Regular Review and Rebalancing: Periodically review your portfolio's performance and rebalance as needed to maintain your desired asset allocation and risk level.
Financial Education: Continuously educate yourself about investing, personal finance, and market trends to make informed decisions and adapt to changing market conditions.
Remember, achieving a 10 Cr corpus by 35 requires disciplined saving, prudent investing, and patience. Consulting a Certified Financial Planner can provide personalized guidance and help you navigate the complexities of investing to reach your ambitious goal.

Ans: It's impressive that you're thinking about retirement at such a young age! Starting early gives you a significant advantage in building wealth over time. Here's a suggested allocation for your investment instruments to aim for a retirement corpus of 10 crores by the age of 35:

Equity Investments (70-80%):
Invest a major portion of your portfolio in equity instruments like mutual funds, stocks, or exchange-traded funds (ETFs). These offer the potential for high returns over the long term. Consider diversified equity funds across large-cap, mid-cap, and small-cap segments to spread risk.
Allocate around 70-80% of your investment portfolio to equity for higher growth potential.
Debt Instruments (10-20%):
Allocate a smaller portion of your portfolio to debt instruments like fixed deposits, bonds, or debt mutual funds. These provide stability and act as a buffer against market volatility.
Aim to allocate around 10-20% of your portfolio to debt instruments to balance risk and provide steady income.
Alternative Investments (10%):
Consider allocating a small portion of your portfolio to alternative investments like real estate investment trusts (REITs), gold, or other alternative assets. These can provide diversification and act as a hedge against inflation.
Allocate around 10% of your portfolio to alternative investments for added diversification.
Remember, asset allocation should be based on your risk tolerance, investment goals, and financial situation. Regularly review and rebalance your portfolio to stay aligned with your objectives and adjust as needed. Consider consulting with a financial advisor to create a personalized investment plan tailored to your specific needs and aspirations. Starting early and staying disciplined will put you on the path towards achieving your retirement goal of 10 crores by the age of 35.

Ans: To accumulate the amount of Rs 10 crores in a span of 16 years, you need to invest as per the following -
Option 1 - One time bulk investments of Rs 1.63 cr approx
Option 2 - Monthly Investments of Rs 1.7 lakhs through SIPs
Option 3 (Combination of Bulk and SIPs) - Rs 30-Rs 40 lakhs in bulk and monthly investment through SIPs of Rs 1.5 lakhs

By considering historical returns of 12%, you can invest in pure equity funds for next 15-16 years in different categories like Index Funds, Flexi cap, Mid Cap, Small Cap etc. Be patient and consistent.

Ans: congratulations on your impressive financial journey so far. With a robust monthly salary of Rs. 1.8 lakhs and diverse investments, you are well-positioned to achieve your financial goals. Let’s delve into a strategic plan to help you build a corpus of Rs. 10 crores in the next 12 years while ensuring safety and higher returns.

Current Financial Situation
Income and Expenses
Monthly Salary: Rs. 1.8 lakhs
Monthly Expenses: Rs. 50,000
Monthly Investments:
NPS: Rs. 40,000
Mutual Funds: Rs. 21,000
Remaining Monthly Amount for Investment: Rs. 50,000
Existing Investments
Stocks: Rs. 3 lakhs
Sovereign Gold Bonds (SGB): Rs. 6 lakhs
Mutual Funds: Rs. 14 lakhs
Public Provident Fund (PPF): Rs. 25 lakhs
National Pension System (NPS): Rs. 5 lakhs
Emergency Fund: Rs. 10 lakhs
Term Insurance: Rs. 2 crores
Property: Current value approx. Rs. 2 crores
Home Loan: Rs. 16 lakhs (EMI: Rs. 25,000 per month)
Investment Goals and Strategy
Your primary goal is to build a corpus of Rs. 10 crores in the next 12 years. To achieve this, you need to focus on a balanced and diversified investment strategy that emphasizes growth, safety, and tax efficiency.

Recommended Investment Instruments
Equity Mutual Funds
Why Equity Mutual Funds?

Higher Returns: Historically, equity mutual funds have provided returns averaging 12-15% over the long term.
Diversification: Investing in a mix of large-cap, mid-cap, and small-cap funds offers balanced risk and return.
Strategy:

SIP (Systematic Investment Plan): Continue your SIPs and consider increasing the amount annually.
Additional Allocation: Allocate a portion of your Rs. 50,000 surplus into equity mutual funds.
Balanced Advantage Funds
Why Balanced Advantage Funds?

Dynamic Allocation: These funds adjust the allocation between equity and debt based on market conditions.
Stability: They offer a good balance of risk and return, providing some downside protection.
Strategy:

Monthly Investment: Consider allocating Rs. 10,000-15,000 per month to balanced advantage funds.
Direct Stocks
Why Direct Stocks?

Potential for High Returns: Individual stocks can provide significant returns if well-researched and selected.
Diversification: Investing in different sectors can mitigate risks.
Strategy:

Research and Investment: Invest Rs. 10,000 per month in blue-chip and high-growth potential stocks.
Debt Funds
Why Debt Funds?

Lower Risk: They are less volatile compared to equity funds.
Steady Returns: Ideal for stability and regular income.
Strategy:

Monthly Investment: Allocate Rs. 10,000-15,000 per month to debt funds, focusing on high-quality corporate bonds and government securities.
Public Provident Fund (PPF)
Why PPF?

Tax Benefits: Offers tax exemption under Section 80C.
Safe Returns: Government-backed, ensuring safety of principal.
Strategy:

Annual Contribution: Continue contributing to your PPF account to maximize the benefits.
Building a Corpus of Rs. 10 Crores
Systematic Investment and Compounding
Importance of Compounding:

Regular Investments: Continuously invest the Rs. 50,000 surplus every month.
Reinvestment: Reinvest returns to benefit from compounding over the next 12 years.
Expected Returns:

Equity Mutual Funds and Stocks: Assuming an average annual return of 12-15%.
Balanced Funds: Expecting around 10-12% returns annually.
Debt Funds and PPF: Providing 7-8% returns annually.
Monthly Investment Allocation
Suggested Allocation:
Equity Mutual Funds: Rs. 25,000
Balanced Advantage Funds: Rs. 10,000
Direct Stocks: Rs. 10,000
Debt Funds: Rs. 5,000
This diversified approach balances high returns with safety and stability.

Tax Implications and Planning
Equity Investments
Long-Term Capital Gains (LTCG): Taxed at 10% beyond Rs. 1 lakh of gains.
Short-Term Capital Gains (STCG): Taxed at 15%.
Debt Investments
LTCG: Taxed at 20% with indexation benefits.
STCG: Taxed as per your income slab.
Managing Your Home Loan
Early Repayment
Consider making occasional lump sum payments towards your home loan principal to reduce the interest burden and pay off the loan sooner.

Financial Planning for Your Children
Education and Future Needs
Child Education Plans: Consider investing in child-specific mutual funds or balanced advantage funds.
SIP for Children: Start SIPs dedicated to your children’s education and future needs.
Regular Review and Adjustment
Periodic Review
Review Investments: Conduct semi-annual or annual reviews of your portfolio with a Certified Financial Planner (CFP).
Rebalance Portfolio: Adjust your investments based on performance and changing financial goals.
Final Thoughts
You have a solid financial foundation and a clear goal. By following a disciplined investment strategy, leveraging the power of compounding, and regularly reviewing your investments, you can achieve your target corpus of Rs. 10 crores in the next 12 years. Remember, the key to successful investing is consistency, diversification, and periodic assessment.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in