We both are in our 50s and earn 5 lakhs per month want to have 50cr after 15yrs how much amount should we start to invest to reach the goal

Ans: If the retirement is 60 years than you need to do SIP of 55000 for next 10 years in an equity fund

Ans: Assuming your current investments grow ~12% CAGR for the next 5 years, your total corpus will be Rs. 54.5 lacs approximately. Now we are assuming Rs. 40,000 monthly requirement is already inflation adjusted, otherwise the requirement will come close to ~Rs. 54,000 on the 6th year (inflation @ 6%).
We suggest you do a monthly SIP of Rs. 25,000 for the next 5 years. You corpus will come close to Rs. 75 lacs, assuming to grow at 12%; you should be able to take out the required monthly instalment for close to 24 years, assuming your investments continue to grow at ~9% yearly with inflation ~5%.

Ans: Thank you for reaching out. It's admirable that you're planning ahead for your child's education and seeking stable returns on your investment. Let's explore some options that can provide you with a reliable income stream while preserving and potentially growing your capital.

Understanding Your Investment Goals
Given your age and your husband's age, it's essential to focus on investments that offer a balance between safety, income generation, and moderate growth. Your primary goal is to generate sufficient returns to cover your child's education expenses. Therefore, a mix of debt and equity investments may be suitable.

Fixed Deposits and Debt Funds
Fixed Deposits (FDs):

Safety: FDs are one of the safest investment options. Banks and post offices offer fixed deposits with guaranteed returns.
Interest Rates: While FD interest rates are relatively lower than equity investments, they provide assured returns. You can ladder your FDs to take advantage of varying interest rates and maintain liquidity.
Debt Mutual Funds:

Types: Consider short-term debt funds, corporate bond funds, or dynamic bond funds.
Returns: Debt funds generally offer higher returns than fixed deposits but come with some level of risk. They invest in government securities, corporate bonds, and money market instruments.
Liquidity: These funds are more liquid than FDs, allowing you to withdraw money if needed.
Balanced Advantage Funds
Balanced Advantage Funds:

Mix of Equity and Debt: These funds dynamically allocate assets between equity and debt based on market conditions. This provides a balance of growth potential and risk management.
Moderate Risk: Suitable for conservative investors looking for better returns than pure debt investments with manageable risk.
Income Generation: These funds can provide regular income through Systematic Withdrawal Plans (SWP).
Dividend-Paying Stocks and Equity Mutual Funds
Dividend-Paying Stocks:

Regular Income: Investing in high-quality, dividend-paying stocks can provide regular income. Choose companies with a consistent track record of paying dividends.
Growth Potential: Along with dividends, there is potential for capital appreciation.
Equity Mutual Funds:

Diversification: Investing in large-cap or multi-cap equity mutual funds provides diversification across various sectors and companies.
Growth and Income: While equity funds are subject to market risks, they offer the potential for higher returns over the long term. You can set up an SWP to receive regular income.
Systematic Withdrawal Plan (SWP)
Systematic Withdrawal Plan (SWP):

Regular Income: SWPs allow you to withdraw a fixed amount from your mutual fund investments regularly. This can provide a steady income stream to cover education expenses.
Tax Efficiency: SWPs are more tax-efficient compared to regular fixed deposits, as only the gains are taxed, not the principal.
Recommended Strategy
Given your objectives, a diversified approach combining safety and moderate growth is advisable:

Fixed Deposits (30% - 35%): Allocate a portion to FDs for guaranteed returns and safety.
Debt Mutual Funds (30%): Invest in high-quality debt mutual funds for better returns than FDs with manageable risk.
Balanced Advantage Funds (20% - 25%): These funds provide a good balance of growth and income.
Equity Mutual Funds (15% - 20%): Allocate to large-cap or multi-cap equity funds for growth potential.
Regular Monitoring
Regularly review your investments to ensure they align with your financial goals. Adjust the portfolio based on changes in interest rates, market conditions, and your child's education expenses.

Conclusion

With a thoughtful mix of fixed deposits, debt funds, balanced advantage funds, and equity mutual funds, you can create a stable and growing investment portfolio. This approach aims to generate the income needed for your child's education while preserving and potentially increasing your capital.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It's great that you're considering your financial goals. Let's discuss how much you should invest to reach ?50 lakhs in 2 years.

Your commitment to financial planning is commendable, and setting a specific goal is the first step towards achieving financial success.

Assessing the Goal
To achieve ?50 lakhs in 2 years, you need to adopt a focused and aggressive savings and investment strategy.

Evaluating Feasibility
Given your salary of ?27,000 per month, achieving a target of ?50 lakhs in just 2 years might be challenging. Let's explore the feasibility.

Analyzing Investment Requirements
To reach ?50 lakhs in 2 years, you need to calculate the monthly investment required based on your expected rate of return.

Planning for Realistic Goals
Given the short investment horizon of 2 years, aiming for a target of ?50 lakhs may not be realistic. It's essential to set achievable goals aligned with your financial capacity.

Considering Alternative Strategies
Instead of targeting a specific amount, focus on maximizing your savings and investing in avenues that offer potential growth over the long term.

Emphasizing Regular Funds Investing through MFD with CFP Credential
Engaging a Certified Financial Planner who is also a Mutual Fund Distributor (MFD) can help you develop a realistic financial plan and guide your investment decisions.

Conclusion
While achieving a target of ?50 lakhs in 2 years may be challenging with your current income, setting realistic goals and adopting a disciplined savings and investment approach can lead to financial security and growth over time.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Aiming for a Rs. 20 crore corpus in shares, mutual funds, and other investments by leveraging your earnings is a great goal. Here's a detailed plan to help you achieve this.

Understanding Your Financial Situation
You and your husband have a combined monthly net income of Rs. 70,000 from your business and Rs. 8-9 lakhs annually from his earnings. You are both 39 years old and have about 21-22 years until you reach 60. Achieving a Rs. 20 crore corpus by then requires a disciplined and strategic investment approach.

Evaluating Your Current Investments
First, let's assess your current financial position. You mentioned you have real estate properties, but you want to focus on other investments. Real estate is a significant asset, but diversification into equities and mutual funds is essential for growth.

Emergency Fund
Ensure you have an emergency fund covering 6-12 months of expenses. This fund should be in a liquid and safe instrument like a high-interest savings account or a liquid mutual fund.

Insurance
Review your insurance policies. Adequate term life insurance and health insurance are essential to protect your family’s financial future.

Creating a Solid Investment Plan
Define Your Financial Goals
Primary Goal: Accumulate Rs. 20 crore by the time you retire.
Secondary Goals: Any other financial goals such as children’s education, marriage, or personal milestones.
Systematic Investment Plans (SIPs)
SIPs in mutual funds are one of the best ways to build wealth over time. They allow disciplined, regular investments in a variety of funds. Here are some categories of mutual funds to consider:

Equity Mutual Funds: These funds invest primarily in stocks and have the potential for high returns. They come with higher risk but are ideal for long-term goals like retirement. Opt for a mix of large-cap, mid-cap, and small-cap funds for diversification.

Debt Mutual Funds: These funds invest in fixed-income securities and are less risky compared to equity funds. They provide moderate returns and add stability to your portfolio. Consider short-term debt funds or corporate bond funds.

Hybrid Mutual Funds: These funds invest in a mix of equity and debt instruments, balancing risk and return. They are suitable for moderate risk-takers and provide balanced growth.

Tax-Saving Funds (ELSS): These equity-linked savings schemes offer tax benefits under Section 80C and have a lock-in period of three years. They are excellent for long-term wealth creation and tax planning.

Diversification and Asset Allocation
A well-diversified portfolio reduces risk and enhances returns. Here’s a suggested asset allocation based on your age and risk profile:

Equity Mutual Funds: 70-80%
Debt Mutual Funds: 10-20%
Others (PPF, NPS, etc.): 10-20%
This allocation leverages the growth potential of equities while providing stability through debt instruments and fixed returns from other safe investments.

Power of Compounding
Compounding is a powerful concept where your investment returns generate further returns. The earlier and more consistently you invest, the more your wealth grows over time. Regular investments in SIPs will take advantage of compounding, ensuring substantial growth in your corpus.

Regular and Disciplined Investing
Increase SIP Contributions
Start with your current savings capacity and gradually increase your SIP contributions as your income increases. Regularly investing a significant portion of your monthly income in a mix of equity and debt mutual funds will significantly grow your corpus.

Regularly Review and Rebalance
Regularly review your investment portfolio to ensure it aligns with your goals. Rebalance your portfolio annually to maintain your desired asset allocation.

Tax Planning
Tax-efficient investing can enhance your returns. Utilize tax-saving instruments under Section 80C, such as PPF, ELSS, and life insurance premiums.

Equity Linked Savings Schemes (ELSS)
ELSS funds offer dual benefits: tax savings and equity market returns. They have a lock-in period of three years and are an excellent choice for long-term wealth creation and tax planning.

Utilizing Retirement Accounts
Public Provident Fund (PPF)
PPF is a safe, tax-saving instrument with decent returns and a 15-year lock-in period. Continue contributing to PPF for its tax benefits and assured returns.

National Pension System (NPS)
NPS is another excellent retirement-focused investment option. It offers tax benefits under Section 80C and 80CCD and invests in a mix of equity, corporate bonds, and government securities.

Mutual Funds: Advantages and Categories
Mutual funds are a pool of money collected from many investors to invest in securities like stocks, bonds, and other assets. Here are some key points about mutual funds:

Advantages of Mutual Funds
Diversification: Spreads risk across various assets.
Professional Management: Managed by experienced fund managers.
Liquidity: Easy to buy and sell.
Systematic Investment: Allows for disciplined investing through SIPs.
Categories of Mutual Funds
Equity Funds: Invest primarily in stocks. High risk, high return.
Debt Funds: Invest in fixed-income securities. Lower risk, moderate return.
Hybrid Funds: Mix of equity and debt. Balanced risk and return.
Index Funds: Track a market index. Lower management fees but less flexibility.
Sector Funds: Invest in specific sectors. Higher risk due to lack of diversification.
Avoiding High-Cost Insurance Products
High-cost products like ULIPs (Unit Linked Insurance Plans) have high charges, reducing overall returns. Instead, focus on term insurance for adequate coverage and mutual funds for investment.

Engaging a Certified Financial Planner
A Certified Financial Planner (CFP) can provide personalized advice based on your financial goals and risk tolerance. They can help optimize your investment strategy and ensure you are on track to meet your goals.

Risk Management and Contingency Planning
Adequate Health Insurance
Ensure you have adequate health insurance coverage for yourself and your family. Medical emergencies can deplete your savings quickly. A comprehensive health insurance plan will protect your finances.

Emergency Fund
Keep your emergency fund in a liquid and safe instrument like a high-interest savings account or a liquid mutual fund to ensure accessibility.

Retirement Corpus Calculation
To retire with Rs. 20 crore, you need to estimate your required retirement corpus. Consider your current expenses, inflation, and post-retirement life expectancy. Assuming an annual inflation rate of 6-7%, calculate your future monthly expenses and the corpus needed to sustain those expenses post-retirement.

Final Insights
Your goal to accumulate Rs. 20 crore is ambitious but achievable with disciplined savings and strategic investments. Continue contributing to your PPF and start investing in SIPs across various mutual fund categories. Diversify your portfolio with a mix of equity, debt, and hybrid funds to balance risk and returns.

Utilize the power of compounding by starting early and increasing your SIP contributions over time. Regularly review and rebalance your portfolio to stay aligned with your goals. Ensure you have adequate life and health insurance coverage to protect your finances.

Remember, starting early and staying disciplined in your investments will help you achieve your financial goals. Best of luck with your planning, and I hope you achieve a comfortable and secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in