I am 41 years old. I am single. I have no dependents. In my family only father is there who lives off his monthly government pension which is around 80k per month. I am currently working on my startup. I don't have a regular monthly income as of now. I have inherited property which is around worth 20 crores. I have 3 houses. I dont have any loans or any other financial commitments. I might do marriage and may have kids also in near future. I have invested in a pension plan of a nationalised bank in which I invest 8 lacs per year for 5 years. and Then I get a lifelong income of approx 3 lacs per year for the rest of my life. The property I have and will inherit will be mostly agricultural land and commercial land. How and where do i invest so that I get at least 4 lacs per month regular income from my property investments. The money which I will receive from my agri/comm land sale will be at least 60 percent in cash. So, my question is about the regular monthly income and also where do I invest my money.

Ans: I can provide a detailed plan for you. Let's discuss how you can achieve a regular monthly income of at least Rs 4 lakhs from your investments. I'll break down the plan into key components and provide professional advice while keeping the language simple and clear.

Understanding Your Current Financial Situation

First, let's appreciate your financial situation. You have no loans or dependents, and you own valuable property worth Rs 20 crores. You also have three houses and expect to inherit more agricultural and commercial land. It's impressive that you have a pension plan that will provide lifelong income.

Since you aim for a stable monthly income, diversifying your investments will be key. Let's explore different investment options to help you achieve your goal.

Investment in Mutual Funds

Mutual funds are an excellent way to generate regular income. They offer diversification, professional management, and liquidity. There are different types of mutual funds to consider:

1. Debt Mutual Funds

Debt mutual funds are less risky and provide steady returns. These funds invest in government securities, corporate bonds, and other fixed-income instruments. They can offer regular income through monthly, quarterly, or annual dividends.

Advantages of Debt Mutual Funds

Lower risk compared to equity funds.
Regular income through dividends.
Professional management.
Diversification across various debt instruments.
2. Equity Mutual Funds

Equity mutual funds invest in stocks and have the potential for high returns. Though they are riskier, they can provide significant growth over the long term. You can choose funds focusing on large-cap, mid-cap, or small-cap stocks based on your risk tolerance.

Advantages of Equity Mutual Funds

High potential returns.
Diversification across various companies.
Professional management.
Long-term growth through compounding.
3. Balanced or Hybrid Mutual Funds

Balanced or hybrid funds invest in both equity and debt instruments. They offer a balance of risk and return. These funds can provide regular income through dividends while offering growth potential.

Advantages of Balanced or Hybrid Mutual Funds

Balanced risk and return.
Regular income through dividends.
Diversification across equity and debt.
Professional management.
Systematic Withdrawal Plan (SWP)

A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your mutual fund investments regularly. This can provide you with a steady income. You can set up an SWP in debt or balanced funds to ensure regular monthly income.

Advantages of SWP

Regular income.
Flexibility in withdrawal amount and frequency.
Tax efficiency compared to lump-sum withdrawals.
Professional management of remaining investments.
Fixed Deposits (FDs)

Fixed deposits are safe and provide guaranteed returns. Though they offer lower returns than mutual funds, they are a reliable source of regular income. You can invest a portion of your funds in FDs to ensure stability.

Advantages of Fixed Deposits

Guaranteed returns.
Low risk.
Regular interest income.
Flexibility in tenure.
Post Office Monthly Income Scheme (POMIS)

The Post Office Monthly Income Scheme is a government-backed savings scheme. It provides a fixed monthly income with low risk. You can invest in POMIS to ensure a part of your income is stable and secure.

Advantages of POMIS

Guaranteed monthly income.
Low risk.
Government-backed security.
Fixed tenure with assured returns.
Senior Citizen Savings Scheme (SCSS)

If you or your father are eligible, the Senior Citizen Savings Scheme is an excellent option. It offers regular income and tax benefits. This scheme is government-backed and provides higher interest rates.

Advantages of SCSS

Regular income.
Higher interest rates.
Tax benefits.
Government-backed security.
National Pension System (NPS)

The National Pension System is a long-term investment option. It offers tax benefits and helps build a retirement corpus. While it focuses on retirement, it can be a part of your diversified portfolio.

Advantages of NPS

Long-term retirement planning.
Tax benefits.
Diversified investments.
Professional management.
Real Estate Investment Trusts (REITs)

While you have substantial real estate holdings, investing in REITs can provide diversification. REITs allow you to invest in commercial properties and earn rental income without directly managing the properties.

Advantages of REITs

Regular income through dividends.
Diversification in real estate.
Professional management.
Liquidity compared to direct real estate investment.
Diversified Investment Portfolio

To achieve a regular monthly income of Rs 4 lakhs, a diversified investment portfolio is essential. Here's a suggested allocation:

1. Mutual Funds: Allocate a significant portion to debt, equity, and balanced funds. Use SWP for regular income.

2. Fixed Deposits: Invest a portion in FDs for guaranteed returns and stability.

3. POMIS and SCSS: Invest in these schemes for low-risk, government-backed income.

4. NPS: Consider NPS for long-term retirement planning and tax benefits.

5. REITs: Invest in REITs for real estate diversification and rental income.

Creating a Systematic Investment Plan (SIP)

Systematic Investment Plans (SIPs) allow you to invest regularly in mutual funds. SIPs help in rupee cost averaging and disciplined investing. You can set up SIPs in equity and balanced funds to build a corpus over time.

Advantages of SIP

Disciplined investing.
Rupee cost averaging.
Flexibility in investment amount and frequency.
Professional management.
Power of Compounding

Investing early and regularly takes advantage of the power of compounding. Your investments grow exponentially over time, providing significant returns. Compounding is especially beneficial in equity mutual funds and SIPs.

Advantages of Compounding

Exponential growth over time.
Higher returns with longer investment duration.
Benefits of reinvesting earnings.
Risk Management and Diversification

Diversification helps manage risk and ensures stability in your portfolio. By investing in various asset classes, you reduce the impact of market volatility. Balancing high-risk and low-risk investments is key to achieving steady income.

Advantages of Diversification

Risk management.
Stability in returns.
Exposure to various asset classes.
Professional management.
Working with a Certified Financial Planner

A Certified Financial Planner (CFP) can help create a tailored investment plan. They offer professional advice, portfolio management, and periodic reviews. Working with a CFP ensures your investments align with your goals.

Advantages of Working with a CFP

Professional advice and management.
Tailored investment plan.
Periodic portfolio reviews.
Alignment with financial goals.
Final Insights

To achieve a regular monthly income of Rs 4 lakhs, diversify your investments. Focus on mutual funds, FDs, government schemes, and REITs. Use SWPs and SIPs for steady income and growth. Work with a Certified Financial Planner for professional guidance. Diversification and risk management are key to stable and regular income.

Investing in mutual funds provides growth and stability. They offer diversification and professional management. Balanced and debt funds provide steady income. SIPs and SWPs ensure disciplined and regular investments.

Fixed deposits and government schemes provide guaranteed income. They add stability to your portfolio. REITs offer real estate diversification without direct management. NPS helps in long-term retirement planning.

Diversification and risk management ensure stable returns. The power of compounding boosts long-term growth. Working with a CFP provides professional advice and alignment with your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in