Can I build a 20 Crore corpus in 12 years with a 35-45L salary and loans?

Ans: Hello Nandakumar, thank you for writing to me. To create a corpus of Rs.4 Crore, you will need to invest Rs.1.8 Lakh every month.

If you wish to invest only thru Mutual Funds, then you can consider starting monthly SIP's in:

1-Edelweiss NIFTY 100 Quality 30 Index Fund-Rs.60 thousand.
2-Axis ESG Fund-Rs.60 thousand.
3-UTI MNC Fund-Rs.60 thousand.

Ans: With your assets and goals in mind, let's craft a plan to accumulate a corpus of 10 Crore in 10 years:

Firstly, let's leverage your existing assets:

Your self-owned house and shop are valuable assets that can provide stability and potential appreciation over time.
The commercial garage rental income adds to your monthly cash flow, which is a positive aspect for your financial planning.
Given your current cash reserve:

Utilize a portion of your cash reserve for immediate expenses and emergencies.
Allocate the remaining amount strategically towards investments that align with your long-term goal.
Considering your lack of current income:

Explore investment avenues that offer a balance of capital appreciation and regular income generation.
Focus on creating a diversified investment portfolio to spread risk and maximize returns over the long term.
For your monthly expenses:

Ensure that your investment strategy takes into account your monthly expenditure needs, aiming for a balance between growth and liquidity.
Regarding your family's financial security:

Continue to maintain adequate medical insurance coverage to safeguard against unforeseen health expenses.
Consider allocating a portion of your investment towards education and future financial needs of your children.
Remember:

Regularly review your investment portfolio and adjust your strategy as needed to stay on track towards your goal.
Seek guidance from a Certified Financial Planner to fine-tune your investment plan and address any concerns or uncertainties.
With diligence and a well-thought-out strategy, achieving your financial goal is within reach.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You have Rs 3 lakhs in PF, Rs 2 lakhs in PPF.

You also have Rs 5 lakhs in shares and Rs 2 lakhs in mutual funds.

Your monthly salary is Rs 1 lakh.

Creating a Rs 1 Crore Corpus
Start a Systematic Investment Plan (SIP) in equity mutual funds.

Invest Rs 20,000 monthly in equity funds for high growth.

Consider a mix of large-cap, mid-cap, and flexi-cap funds.

Benefits of Actively Managed Funds
Actively managed funds aim to outperform the market.

Fund managers make strategic decisions for better returns.

They adapt to market changes more effectively than index funds.

Avoid Direct Funds
Direct funds lack professional management.

Regular funds with CFP guidance provide better returns.

Professional fund managers offer expertise and strategic insights.

Public Provident Fund (PPF) and Employee Provident Fund (EPF)
Continue contributing to PPF and EPF for tax benefits.

They offer safe and guaranteed returns.

Emergency Fund
Maintain an emergency fund of at least 6 months of expenses.

This ensures liquidity during unexpected events.

Buying a House in Mumbai
Create a separate savings plan for the house.

Consider debt funds for moderate returns and low risk.

Avoid real estate investments to keep liquidity.

Final Insights
Your current portfolio is balanced.

Increase equity exposure for higher growth.

Plan your investments with a Certified Financial Planner for the best outcomes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Das, at 40 years old, your monthly salary is Rs. 80k. Your monthly expenses are Rs. 40k. This leaves you with Rs. 40k for investments and savings.

Your current investments are:

PPF: Rs. 6 lakhs
NPS: Rs. 15 lakhs
FD: Rs. 14 lakhs
Your monthly NPS contribution is Rs. 18k, combining both your contribution and your employer’s.

Financial Goals
You aim to build a corpus of Rs. 3 crores in the next 20 years.

Assessment of Current Strategy
PPF
Your investment in PPF is good for long-term growth and tax benefits. It has a stable interest rate and risk-free returns.

NPS
Your NPS contributions are excellent for retirement planning. NPS offers tax benefits and market-linked returns, making it suitable for long-term growth.

Fixed Deposits
FDs are safe but offer lower returns compared to other investment options. Consider reallocating some of these funds for higher returns.

Recommendations for Improvement
Increase Equity Exposure
Equity investments have the potential for higher returns over the long term. Consider starting SIPs in equity mutual funds.

Diversify Investments
Diversifying your investments helps reduce risk. Apart from PPF and NPS, you can invest in mutual funds and bonds.

Adjust Fixed Deposits
FDs are low-return investments. Reallocate a portion of your FD corpus to mutual funds for better returns.

Consistent Review and Adjustment
Review your investments regularly. Make adjustments based on market conditions and your financial goals.

Mutual Funds
Equity Mutual Funds: Start SIPs in diversified equity mutual funds. These funds have higher growth potential.
Actively Managed Funds: Actively managed funds can outperform index funds due to professional management.
Retirement Planning
Your NPS contributions are excellent. Continue this for a stable retirement corpus. Additionally, allocate funds to mutual funds for diversified growth.

Emergency Fund
Ensure you have an emergency fund. This should cover 6-12 months of expenses and be kept in a liquid asset.

Tax Planning
Maximize your tax-saving investments. Ensure you are using instruments like PPF, NPS, and tax-saving mutual funds.

Final Insights
Your current investment strategy is solid, but can be improved. Increase your equity exposure for higher long-term returns. Diversify your investments to reduce risk. Review and adjust your portfolio regularly.

Start SIPs in equity mutual funds and consider reallocating some FD funds to higher return investments. Maintain an emergency fund and maximize tax-saving investments.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in