Dear Sir, I am 29 yrs old, i need 30k monthly income apart from from my current salary, i have 2 lakh in MF, 2 lakh in stock, 5 lakh in ULIP , 9 lakh in post office MIS and 10 lakh surplus in liquid, (i also have 2 lakh liquid fund any kind of emergency). My question is how should I realign my investment to get 30k monthly income with increasing the investment capital at the same tym.

Ans: You need approximately 5 crore of corpus to get 2.5 Lakh a month. You have not mentioned the details of stocks & MF funds so it's difficult to say whether it's possible or not

Ans: Current Investment Analysis

Your investment is diversified. You have bank FDs, mutual funds, LIC, and equity shares. Let's evaluate each part.

Bank Fixed Deposit (FD)

You have Rs 95,00,000 in FDs. FDs are safe but have low returns. Current interest rates are around 6-7% annually. This will not help you reach Rs 1,75,00,000 in five years.

Mutual Funds

You have Rs 35,00,000 in mutual funds. Mutual funds can give higher returns. Equity mutual funds can give 10-15% annually. You should focus more on these.

LIC Policies

You have Rs 15,00,000 in LIC policies. These usually give 4-6% returns. It is better to review their performance. You may consider surrendering low-return policies and reinvesting in mutual funds.

Equity Shares

You have Rs 4,50,000 in equity shares. These can give high returns but come with high risk. Diversification is important here. You should invest in a mix of large-cap, mid-cap, and small-cap stocks.

Investment Reshuffling Strategy

To achieve Rs 1,75,00,000 in five years, you need to reshuffle your investments.

Increase Equity Exposure

Increase your investment in equity mutual funds. Allocate around 50-60% of your total portfolio here. Equity mutual funds have the potential to give 12-15% returns annually. Diversify across large-cap, mid-cap, and small-cap funds.

Balanced Funds

Invest around 20-25% of your portfolio in balanced funds. These funds invest in both equity and debt. They provide stable returns with moderate risk. Expected returns are around 8-10% annually.

Debt Funds

Allocate around 10-15% in debt funds. These are safer than equity and balanced funds. They give around 6-8% returns. This will ensure some stability in your portfolio.

Review and Rebalance

Review your portfolio every six months. Rebalance your investments as needed. This ensures your portfolio remains aligned with your goals.

Emergency Fund

Keep some funds in a liquid asset for emergencies. This ensures you don't need to sell your investments in a hurry. Liquid mutual funds or short-term FDs can be good options.

Avoid Direct Funds and Index Funds

Direct funds may seem cheaper but require more expertise. They need regular monitoring and knowledge. Regular funds, through a Certified Financial Planner (CFP), offer professional management.

Index funds track market indices. They provide average market returns. Actively managed funds aim for higher returns. They have fund managers who make strategic decisions. This can lead to better performance.

Avoid Annuities

Annuities are not ideal for your goal. They offer low returns and less flexibility. Mutual funds and equities are better options.

Insurance Review

Check your LIC and other insurance policies. Ensure you have adequate life and health insurance. Surrender policies that give low returns. Reinvest in better options like mutual funds.

Final Insights

To reach Rs 1,75,00,000 in five years, diversify wisely. Focus on equity mutual funds for high returns. Balanced and debt funds provide stability. Review and rebalance your portfolio regularly. Work with a Certified Financial Planner (CFP) for professional guidance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are investing Rs 14,000 per month through SIPs across various mutual funds. You also have a mediclaim policy of Rs 10 lakh and a term insurance plan of Rs 1 crore. Given your goals, it's great that you've taken steps towards financial security. Your target of Rs 2 crore over the next 10-15 years is achievable with consistent investing and proper planning.

Here’s an analysis of your current investments:

ABSL Flexi Cap Fund (Rs 1000/month): This is a diversified fund investing across large, mid, and small caps. It’s a good long-term choice, but since your investment is relatively small here, consider increasing it slightly.

Axis ELSS Tax Saver (Rs 3000/month): ELSS offers tax benefits and the chance for wealth creation. It is aligned with your tax-saving goals. You can continue investing, as it also provides the benefit of compounding over time.

HDFC Business Cycle (Rs 1000/month) and HDFC Manufacturing (Rs 2000/month): These sectoral/thematic funds are riskier because they focus on specific sectors. I would recommend reducing your exposure to sector funds and shifting the amount into diversified equity funds or large-cap funds to balance your portfolio.

ICICI Prudential Energy Opportunities (Rs 2000/month): Sector-specific again, this fund focuses on energy. While this can give good returns in the short term, it's a high-risk bet in the long term. I suggest reallocating some portion to a more diversified approach.

Kotak Emerging Equity (Rs 2000/month): A mid-cap fund that can deliver higher returns in the long run, but mid-caps can be volatile. Ensure you balance it with large-cap or diversified funds.

Mirae Asset Large & Midcap (Rs 1000/month): This is a good blend of large and mid-cap stocks. You can continue with this, as it balances both stability (large-cap) and growth (mid-cap).

Nippon India Small Cap (Rs 1000/month) and Whiteoak Capital Midcap (Rs 1000/month): These small and mid-cap funds are higher-risk investments. Over the long term, they can give higher returns, but be prepared for volatility.

Recommendations for Improvement
To meet your goal of Rs 2 crore, you need to adjust your investment strategy. Here are some recommendations:

1. Increase SIP Amount Gradually
Rs 14,000 per month is a good start, but you may need to increase this over time to meet your Rs 2 crore target. Since your income is Rs 90,000, aim to gradually increase your SIP by 5-10% every year.
2. Reduce Exposure to Sector Funds
Sectoral and thematic funds like HDFC Business Cycle, HDFC Manufacturing, and ICICI Prudential Energy Opportunities are more volatile. Reallocate a part of this investment to large-cap or diversified equity funds for more stability.
3. Continue ELSS for Tax Savings
Axis ELSS is serving your tax-saving needs. Continue with this investment, but ensure you are within the Rs 1.5 lakh limit under Section 80C.
4. Focus on Diversified Equity and Large-Cap Funds
To achieve your wealth creation goal, increase your exposure to large-cap and flexi-cap funds. They provide a safer and more consistent route to building wealth over the long term.

Some of the small and mid-cap funds you’re investing in can be retained, but the key is not to over-invest in higher-risk funds. A balanced portfolio will reduce risk and increase the chance of reaching your goal.

5. Consider Adding Debt Funds for Stability
You may want to add some debt mutual funds to your portfolio. This will ensure a balanced risk level and provide some protection against market volatility.
6. Prepay Home Loan if Possible
If you have surplus income or can free up some investments after realigning your portfolio, consider prepaying your home loan. This will reduce the interest burden and free up funds for future investments.
7. Review Insurance Coverage
You have Rs 1 crore in term insurance, which is good. However, if your liabilities increase, like for your daughter's education or other expenses, ensure that your coverage remains adequate.
How Much You Need to Save
To reach Rs 2 crore in the next 10-15 years, you'll need to ensure that your investment corpus grows at a healthy rate. With an expected return of 10-12% from mutual funds, you can build a significant corpus, but a more detailed plan with regular reviews is essential.

Example Approach:
If you increase your SIP amount by Rs 2,000-3,000 periodically and reallocate your portfolio as suggested, you will be on track for Rs 2 crore in 15 years. With time, compound interest will work in your favor.
Tax-Saving Strategy
You already invest in Axis ELSS, which gives you tax-saving benefits under Section 80C. You can consider adding another ELSS fund if you need additional tax-saving options, but don't exceed Rs 1.5 lakh in total investment for tax deductions.

Alternatively, you can contribute to PPF for tax-free, low-risk returns. Since you already have a home loan, remember to take advantage of Section 24 for tax deductions on interest payments.

Final Insights
To sum up:

Increase your SIP investments slightly over time to meet your Rs 2 crore goal.

Rebalance your portfolio by reducing sectoral fund exposure and focusing more on diversified and large-cap funds.

Maintain ELSS for tax-saving benefits but diversify if necessary.

Gradually prepay your home loan to reduce interest expenses and free up cash flow for investing.

Continue reviewing your insurance coverage to match future needs.

Making these changes will put you on the right path to achieving your financial goals in 10-15 years.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: Hello;

What is the current value of your share in the ancestral property?

Are you in a position to sell it whenever you want or it depends on concurrence of other people?

Please clarify.

Thanks;