Hi Dev, I am 29 years old and have a monthly income of 20K. I am already investing in MF and want to achieve a corpus fund of 5 crores by the age of 50 for my retirement. Please advise on how to invest

Ans: It would be advisable to use SIP or STP methods to accumulate corpus and let the power of compounding work.

A monthly investment of Rs 40,000 would be required for a corpus of Rs 5 crores in 20 years.

The funds that may be considered are as under:

• HDFC Index Fund - Sensex Plan - Regular Plan - Growth 
• Samco Flexi Cap Fund - Regular Plan - Growth 
• UTI MNC Fund - Growth Plan
• Parag Parikh Flexi Cap Fund- Regular Plan Growth
  
  
  

Ans: Monthly SIP amount of Rs 27500 will be required to achieve the targets:

Below are few funds that can be considered for creating a corpus of Rs 1.5. Crs in 15 years

1. UTI Flexi Cap Fund -- Growth
2. Parag Parikh Flexi Cap Fund -- Growth
3. Axis ESG Equity Fund -- Growth
4. Motilal Oswal Focused 25 Fund -- Growth

Around 13^th year or when you reach 57/58 years in age to reduce the volatility in the corpus shift to Debt Funds (Couple of Banking and PSU and one Corporate Bond Fund) along a Hybrid Balanced advantage fund

Ans: It's great that you're planning for your retirement at 38. Let's explore your investment options to reach your goal of a 2 crore corpus:

• Start with SIPs: Since you're looking to invest 6000 per month, Systematic Investment Plans (SIPs) in mutual funds are a smart choice. SIPs offer the benefit of rupee cost averaging and can help you build wealth over time.

• Asset Allocation: Given your age and long-term investment horizon, consider a diversified portfolio comprising equity and debt funds. Equity funds offer growth potential, while debt funds provide stability.

• Equity Mutual Funds: Allocate a significant portion of your SIPs to equity mutual funds. These funds invest in stocks and have the potential to generate higher returns over the long term. Look for funds that have a track record of consistent performance and align with your risk tolerance.

• Debt Mutual Funds: To balance risk, consider allocating a portion of your SIPs to debt mutual funds. These funds invest in fixed-income securities like bonds and offer relatively stable returns. They can provide a cushion during market downturns.

• Review and Adjust: Regularly review your investment portfolio and make adjustments as needed. As you approach retirement, consider gradually shifting your allocation from equity to debt to reduce volatility and preserve capital.

• Consider Tax-saving Funds: If you haven't already, explore Equity Linked Savings Schemes (ELSS), also known as tax-saving funds. These funds offer tax benefits under Section 80C of the Income Tax Act while providing exposure to equity markets.

• Consult a Certified Financial Planner: Seeking advice from a Certified Financial Planner can provide valuable insights into structuring your investment portfolio and achieving your retirement goals. They can assess your risk profile, investment horizon, and financial objectives to tailor a plan that suits your needs.

• Stay Disciplined: Consistency is key to long-term investing success. Stick to your SIPs even during market fluctuations and avoid making impulsive decisions based on short-term market movements.

• Monitor Progress: Keep track of your investment performance and periodically reassess your progress towards your retirement goal. Adjust your strategy as necessary to stay on track and maximize returns.

By following these steps and staying committed to your investment plan, you can work towards achieving your retirement goal of a 2 crore corpus. Remember, investing is a journey, and patience and discipline are essential for success.

Ans: You aim to create a Rs. 5 crore corpus by age 45.

You have 11 years to achieve this goal.

Your combined annual income is Rs. 25 lakhs.

Evaluating Your Current Investments
You have Rs. 30 lakhs in mutual funds.

You have Rs. 10 lakhs in PPF.

You invest 70% of your income in mutual funds annually.

Importance of Consistent Investments
Consistent investment is crucial.

You invest Rs. 17.5 lakhs annually in mutual funds.

This discipline will help you reach your goal.

Benefits of Actively Managed Funds
Actively managed funds aim for higher returns.

They are managed by experts.

These funds can enhance your growth potential.

Diversifying Your Portfolio
Diversification reduces risk.

Maintain a mix of equity and debt funds.

This ensures a balance of growth and stability.

Maximising Your PPF Investments
Continue investing in PPF for stable returns.

PPF offers tax benefits and risk-free returns.

It complements your mutual fund investments.

Importance of Regular Funds
Invest through a Certified Financial Planner.

Regular funds provide professional guidance.

This helps in making informed investment decisions.

Reviewing Your Insurance Policies
If you hold LIC, ULIP, or investment-cum-insurance policies:

Consider surrendering them for better returns.

Reinvest in mutual funds to maximise growth.

Estimating Required Annual Returns
To achieve Rs. 5 crores in 11 years:

Calculate the required annual return rate.

A Certified Financial Planner can assist with precise calculations.

Creating an Emergency Fund
Maintain an emergency fund.

It should cover at least 6 months of expenses.

This safeguards your financial plan.

Monitoring Your Investments
Regularly review your investment portfolio.

Adjust based on performance and goals.

Stay informed about market trends.

Seeking Professional Help
Consult a Certified Financial Planner.

They offer tailored advice.

Their expertise ensures your plan stays on track.

Final Insights
Creating a Rs. 5 crore corpus by 45 is achievable.

Consistently invest in mutual funds.

Focus on actively managed funds for higher returns.

Diversify your portfolio for balanced growth.

Maintain and maximise your PPF investments.

Regularly review and adjust your investments.

Consult a Certified Financial Planner for personalised guidance.

With disciplined investing and strategic planning, you can achieve your goal.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in