Seeking Clarity: 35-Year-Old with 50 Lakhs - Invest or Repay Loan?

Ans: Hello, there are two websites available for the Bihar Pharmacy Council:
https://biharpharmacycouncil.in/
https://biharstatepharmacycouncil.com/
To register as a pharmacist, you need to upload your details onto the council's website. Kindly verify on which website you have uploaded your details.
The website https://biharstatepharmacycouncil.com/ is linked with the Pharmacy Council of India. Therefore, follow the directions on the second website accordingly.

Ans: Age is just a number. But ageing process happens with oxidative stress. One may be 60, but the biological age according to the healthy physiological system may be like in 50 s. Ageing process is unavoidable, particularly eating everything and crossing the limitations of the physical causes more oxidative stress. So please take care of your lifestyle. With a healthy lifestyle you can age gracefully with good quality of life.

Ans: Post viral illness can trigger different chain of immune reactions
They are mostly self limiting if your lifestyle is well disciplined.
Here are the points towards a healthy lifestyle
1.Early dinner by 6 pm and avoid animal protein and fat at dinner meal
2.Sleeping time to be regulated. Fix a specific time around 9/9.30 pm and unwind from the world particularly off media from 7 pm
3.Regular brisk walking 30 mts a day five days a week
4.Balanaced nutrition and avoid highly refined carbohydrates

Ans: Pulling out hair is inflicting self pain. This is seen as a Psychological condition which needs Psychotherapy and Counselling.
Tips for regrowing hair are
1.Balanced nutrition
2.Good quality Sleep
3.Manage your stress, choose where to meet it

Ans: Practise Yoga from what you are capable now. With regular practise you will be able to do Sukhasana. Until then sit with back support.
Preludes in yoga which is called Yama-the attitude towards self. One of Tha Yamas is Ahimsa - Non violence to yourself. So please do not violate your body capacity. You will be able to breathe well into Sukhasana one day

Ans: Yes, Through Homeopathy medication, one can address the Constituitional imbalances too

Ans: Dear Ms.Sunita ,

I have often mentioned that comparasion of Colleges are difficult and cant be made in absolute terms as many factors are taken into account while comparing . If you are from North India near noida prefer Jaypee or if you are from Punjab side You may think about Thapar University which has also impressive track record.

Ans: Thanks for candidly sharing your goals, current income and savings/investments.

You have adequate term life cover but recommend to cover family and parents with healthcare cover of 50 L as a minimum considering increasing cost of medical treatments and rise in illnesses with age.

Your existing investments are considered as 95 L (Ignoring Emergency fund and saving account balance)

Crypto holdings are considered 0 since they are highly volatile, unregulated and not backed by any tangible asset.

1.5 Cr house reconstruction expenses 12 years hence translates into around 3 Cr considering 6% inflation.

So start a SIP of 90K for 12 years into Nippon India Multicap Fund & HDFC top 100 Fund(50:50)which may yield a corpus of 3.12 Cr(Considering modest return of 13%)

Next goal is car purchase after 6 years so initiate a SIP of 40K in HDFC balanced advantage fund which will yield a corpus of 40L considering modest return of 10.5%

Next goal is a corpus of 3-5 Cr when you will be 55 so you can do a SIP of 50K in PPFAS flexicap fund which will yield a corpus of 5.73 Cr assuming conservative return of 13%

Further important goal is corpus for child education so considering timeframe of 14 years recommend to do a SIP of 50K in HDFC Children's Gift Fund which will yield a corpus of 2Cr+ assuming modest return of 12%

Finally retirement goal of 30Cr assumed to be 25 years from now so you may start a SIP of 70K in ICICI Pru Retirement Fund Pure Equity Plan which yield you a corpus of 15.9 Cr considering modest growth of 13%.
Plus your corpus of 95 L at a modest return of 9.5% will yield a value of 9.18Cr after 25 years
So your total retirement corpus is now 15.9+9.18=25.08 Cr
Further the amount getting released after achievement of all other goals apart from retirement can be redeployed in a value based BAF(HDFC; 10% return) for residual span towards retirement goal.
i.e. 90K for 13 years --2.89 Cr
40K for 19 years--2.73 Cr
50K for 5 years----0.39 Cr
50K for 11 years---1.2 Cr
Total_-----------------------7.21 Cr

Adding this to our earlier calculated retirement corpus gives us comprehensive retirement corpus of 7.21+25.08= 32.21 Cr

Anything you get from Crypto is bonus!!

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing

You may follow us on X at @mars_invest for updates

Happy Investing!!

Ans: At the age of 27, with a long-term investment horizon, you have built a diverse portfolio. However, a review of your portfolio is necessary to ensure optimal returns and financial security. Let’s assess each of your existing investments while providing insights on potential improvements.

1. PPF (Public Provident Fund)

The PPF is a solid choice for risk-free, tax-efficient, long-term savings.

It offers guaranteed returns and tax benefits under Section 80C.
It should be continued as part of your debt allocation.
However, you may want to limit over-reliance on low-return instruments like PPF, as it has a lock-in period of 15 years and a lower growth potential compared to equities.
2. Postal Life Insurance (PLI)

PLI is one of the oldest and most reliable life insurance products in India.

It offers low premiums with high returns.
However, if you are purely looking for life cover, term insurance may offer a higher sum assured at a lower cost.
For wealth accumulation, this may not be the most optimal choice due to its moderate returns. It is advisable to review whether you need both PLI and Jeevan Umang (discussed below).
3. Jeevan Umang

Jeevan Umang is a combination of life insurance and investment, providing regular payouts.

Such investment-cum-insurance plans generally offer lower returns compared to mutual funds.
You might want to re-evaluate keeping this plan since standalone life insurance (term insurance) combined with mutual fund investments may provide better growth and flexibility.
Cancelling or surrendering this policy should be considered after evaluating its surrender value and whether it's feasible based on your financial goals.
4. Recurring Deposit (RD)

RDs are low-risk instruments but have relatively lower returns.

While RDs ensure capital safety, they might not be ideal for wealth creation, especially for long-term goals.
Since you're still young with a long investment horizon, it might be better to channel more funds into equities for higher growth potential.
Consider reducing or stopping this RD and redirecting the funds into equity-based investments.
5. ICICI Equity and Debt Fund

This hybrid fund is a balanced option offering exposure to both equity and debt.

It provides the potential for growth through equities while managing volatility with debt.
As you are young and have a long-term horizon, a higher allocation towards pure equity funds might yield better long-term results.
Evaluate whether you need a hybrid fund in your portfolio, as your other debt investments (PPF, RD) already provide stability.
6. ICICI India Opportunity Fund

This is a thematic fund, focused on certain sectors or market opportunities.

Thematic funds can be more volatile and risky compared to diversified equity funds.
Consider whether you need exposure to such a niche strategy. These funds can work well in a bull market but may not be ideal for consistent long-term growth.
It might be wiser to replace this fund with a more diversified equity mutual fund for better stability.
7. Kotak Multi Cap Fund

Multi-cap funds invest across large-cap, mid-cap, and small-cap stocks.

Multi-cap funds are suitable for long-term growth as they provide diversification across different market capitalisations.
This is a good choice to hold as it balances risk and returns by spreading investments across different categories.
No change is required here.
8. Sundaram Service Fund

Thematic funds like this one tend to focus on specific industries or sectors.

Sector-focused funds are prone to higher volatility due to limited diversification.
While such funds can provide high returns in specific cycles, they may not be ideal for consistent long-term growth.
You could consider switching to a diversified equity fund to reduce concentration risk.
9. Nippon Small Cap Fund

Small-cap funds have high growth potential but are also volatile.

Given your long-term horizon, small-cap funds can offer excellent growth opportunities.
However, small-cap funds should be a part of your portfolio, but with a smaller allocation due to higher risks.
Keep an eye on the fund’s performance and market conditions but maintain some exposure to small caps for aggressive growth.
10. HDFC Multi Cap Fund

Similar to the Kotak Multi Cap Fund, this fund offers broad exposure across different types of companies.

Multi-cap funds are an important component of a well-diversified portfolio.
Holding multiple multi-cap funds may lead to overlapping stock investments, so it may be beneficial to consolidate into one multi-cap fund for simplicity and efficiency.
No immediate need for cancellation, but consider streamlining your investments.
11. Canara Robeco Blue Chip Equity Fund

Blue chip equity funds invest in well-established companies with strong track records.

Blue chip funds are a stable option for long-term wealth creation with moderate risk.
These funds tend to perform well in the long term, providing stable growth.
Continue investing in blue-chip equity for consistent, lower-risk returns.
12. Motilal Oswal Large and Mid Cap Fund

This fund invests in a mix of large and mid-cap companies.

Large and mid-cap funds offer a balance of stability from large caps and growth potential from mid caps.
It’s a good choice to keep, given your long-term investment horizon.
Continue your SIP in this fund as it provides a diversified exposure to both stable and high-growth companies.
Portfolio Insights

Your portfolio is a mix of both equity and debt instruments. There are areas where you could improve efficiency and focus more on growth. Since you are young, your portfolio should focus more on equity investments rather than debt or conservative instruments.

Here are some points for improvement:

Consider reducing or stopping PLI, Jeevan Umang, and RD. They offer lower returns and are not ideal for wealth accumulation.
Consolidate your multi-cap funds to avoid redundancy and improve efficiency.
Consider moving away from thematic funds (ICICI India Opportunity, Sundaram Service) and replace them with more diversified options for better risk management.
Maintain small exposure to small-cap funds but don’t over-allocate due to volatility.
Large-cap and blue-chip funds should continue, as they provide stability to your portfolio.
Investment Strategy Moving Forward

Since you are currently pursuing your MD, you might want to focus on building a strong long-term growth portfolio. The following strategy could help you optimise your investments:

Increase Equity Exposure: Given your young age and long-term goals, you could increase your equity exposure to maximise returns. Equity mutual funds have historically outperformed other asset classes over long periods.

Reduce Debt Instruments: PPF is a good debt instrument, but the RD and life insurance policies may not be ideal for wealth creation. Consider directing those funds into more growth-oriented investments.

Review Insurance Needs: If your current life insurance policies are not providing adequate coverage, switch to a term plan that offers high coverage at a lower premium. This will allow you to free up more funds for investment purposes.

Consolidate and Simplify: You have multiple schemes in similar categories, which might lead to unnecessary overlap. Streamlining your portfolio by focusing on a few high-quality funds can make it easier to track performance.

Continue SIPs: SIPs are a great way to invest systematically. Increase your SIPs in funds with strong performance records and reduce exposure to underperforming or high-risk funds.

Monitor Portfolio Regularly: Keep track of your fund performance, rebalance annually, and make adjustments as needed to align with your goals.

Final Insights

Your portfolio is already in a good shape for someone at the start of their professional career. However, there are some areas where you could optimise for better returns. By focusing more on equity and less on conservative products like life insurance and RDs, you can enhance your wealth creation potential.

This shift in strategy will allow you to focus on long-term growth, ensuring a solid financial foundation for the future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in