Hello, I have the following investmens/savings: 1) 7,50,00,000 in MF 2) 3,00,00,000 in debt/liquid fund 3) 15,00,00,000 in FD 4) 4,00,00,000 in Real estate development 5) 30,00,00,000 in corporate savings Expenses: 1) Loan emi (cars) - 40k/month 2) Business expenses - 2,00,00,000/yearly 3) Personal/Family expenses - 1,00,00,000/yearly Current situation/wants: 1) I am 35 y/o , want to retire by 42 and work not for money but for what I like to do. 2) I want to have substantial amount of returns coming in every month and per annum. 3) Align 15-20% ROI yoy. 4) Retire with enough cash to live until lifetime. Question(s): 1) Shall I re-align my investments? 2) I want to move the funds from Debt+FD to MF (80%), is it a wise decision? Considering that 50% of the MF investment will be invested considering it as a short term investment (i.e. 12-24 months) given the constant work related needs. 3) Considering the inflation and current expenses, I want maintain my expenses almost on the same level, would my current investments make enough to cover up monthly/yearly expenses and cover the retirement period as well?

Ans: It's wonderful to see your proactive approach towards financial planning, especially with your long-term goals in mind. Let's break down your current situation and chart out a plan to achieve your targets:

Income & Expenses:
Your current in-hand salary of 57,000 per month is a solid foundation. It's excellent that you're aiming to increase it to 65k-75k per month by the year-end. This upward trajectory in income will provide you with more flexibility in managing your expenses and investments. Your monthly expenses of 20,000 (10,000 for parents and 10,000 personal) are well-understood, leaving you room to allocate the rest towards savings and investments.

Emergency Fund:
Maintaining an emergency fund equivalent to 6-9 months' worth of expenses is a wise move. Your emergency corpus of 2.5 lakhs covers this criterion, ensuring you're prepared for any unexpected financial emergencies without disrupting your long-term investments.

Investment Portfolio:
Your current investment portfolio consists of a mix of mutual funds and traditional savings instruments. While the DSP Nifty 50 Equal Weight Index Fund and Nippon India Nifty Small Cap 250 Index Fund offer exposure to broad market indices, the DSP Natural Resources and New Energy Fund and ICICI Infrastructure Growth Fund provide thematic exposure to specific sectors. Additionally, your contributions to PF and PPF demonstrate a commitment to long-term savings.

Future Goals:
Your goals are ambitious yet realistic. Accumulating 5 crores over 20-25 years for retirement and securing a regular retirement income of 25,000 in today's money value after 25 years require diligent planning and disciplined investing. Given your plans for marriage and starting a family in the next 1-3 years, it's crucial to factor in these additional expenses and adjust your financial strategy accordingly.

Recommendations:
Review Existing Investments:
Regularly assess the performance of each fund in your portfolio. Consider discontinuing those that consistently underperform or no longer align with your investment objectives. Focus on funds with strong track records and robust fundamentals.

Increase Savings Rate:
As your income grows, aim to increase your monthly investments proportionately. A higher savings rate will accelerate your journey towards achieving your financial goals. Review your budget periodically to identify areas where you can cut back on expenses and redirect those funds towards savings and investments.

Asset Allocation:
Diversification is key to managing risk effectively. Consider diversifying your portfolio across different asset classes, including equities, debt, and alternative investments like real estate or gold. Maintain a balanced allocation that suits your risk tolerance and investment horizon.

Retirement Planning:
Calculate the corpus required to generate a regular retirement income of 25,000 in today's value after 25 years. Use a retirement calculator to determine the monthly contribution needed to reach this target. Consider investing in retirement-focused mutual funds or pension plans to build a robust retirement portfolio.

Marriage & Family Planning:
Factor in the expenses related to marriage and starting a family when setting your financial goals. Start building a separate corpus for these milestones by allocating a portion of your savings towards dedicated savings accounts or investment vehicles tailored to short-to-medium-term goals.

Conclusion:
By implementing these recommendations and staying committed to your financial plan, you can work towards achieving financial independence and securing a comfortable retirement. Remember to review your plan regularly and make adjustments as needed to stay on track towards your goals.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: You are in a strong position already, and with careful planning over the next 11 years, you can achieve financial freedom by 55.

Let us assess each area of your finances and give complete insights.

? Family and Dependents Overview

– You are 44 years old with a clear retirement goal at 55.
– You have a spouse and three children (12-year-old twin daughters and a 6-year-old son).
– So, your financial planning must consider retirement, education, and marriage costs for 3 children.

This is a high responsibility phase. But, your structured investments and consistent income give a good foundation.

? Cash Flow Review – Income vs Expenses

– Total monthly income: Rs. 3.1L (salary, rent, lending interest).
– Total annual income (excluding dividends): Rs. 37.2L.
– Dividends: Rs. 20K/year.

– Monthly committed expenses: Around Rs. 1.55L including EMIs, school, health, term policies, and living.
– This results in a good monthly surplus of approx. Rs. 1.55L.

This surplus gives flexibility for investments and goal planning.

? Loans and Liabilities

– Home Loan 1: Rs. 33K/month for 3 more years.
– Home Loan 2: Rs. 32K/month for 6 more years.

– Loans are manageable and getting closed well before retirement.
– No action needed now, since the interest is likely offset by the rental income and tax benefits.

You’re handling debt wisely. Once EMIs end, you can redirect those amounts to wealth building.

? Insurance and Risk Cover

– Term insurance: Rs. 1 Cr, annual premium Rs. 28K.
– Health insurance: Rs. 15L cover for Rs. 29K/year.

– These are basic protections. But, Rs. 1 Cr life cover may not be enough.
– With 4 dependents and long-term goals, your ideal cover should be around Rs. 2.5 to 3 Cr.

Please consider enhancing your term cover now, before age and health affect premium costs.

Also, check if the health cover is family floater. If not, upgrade it. Inflation in medical costs is steep.

? Children's Education and Marriage Planning

– Current schooling cost: Rs. 5L/year for 3 kids.
– Higher education and marriage are big-ticket goals.

– Your daughters will reach college in 5–6 years.
– Your son has around 10–12 years.

– You should aim for an education corpus of Rs. 60–80L over 10 years.
– Marriage corpus can be targeted separately, say Rs. 40–50L for all 3 children.

You have time for these. But you need a focused fund allocation for each goal.

? Investment Portfolio Review

Your investment discipline is commendable. Let us evaluate each area.

Equity Stocks
– Rs. 40K/month in direct equity. Portfolio worth Rs. 24L.
– Asset allocation is healthy (Large cap – 55%, Mid – 15%, Small – 30%).

Please ensure you have exit strategies defined. Also, regularly book partial profits in frothy markets.

SSY (Sukanya Samriddhi Yojana)
– Rs. 3L/year with current value Rs. 6.5L.
– This is a great long-term, tax-free, fixed interest instrument.

Continue this till your twin daughters reach 15 years of age. It fits your goals well.

Mutual Funds (Rs. 6L/year, current value Rs. 1L)
– This is where you need better strategy.
– 4 Small-cap MFs make your portfolio aggressive.
– ETFs (2 funds) are passively managed.

Please note, index funds and ETFs have major limitations:
– No active management, so cannot outperform the market.
– They do not protect capital during downturns.
– During sideways markets, they show weak performance.
– Index funds don't suit retirement or child planning goals.

Also, avoid direct mutual funds. They come without advisor support.
– No one reviews your risk alignment.
– Mistakes go uncorrected, often leading to goal delays.

Regular plans via a Mutual Fund Distributor who is also a CFP bring value.
– You get periodic portfolio reviews.
– Goal-based fund selection happens.
– Behavioural mistakes are prevented.

Going forward, shift from ETFs and excess small-cap exposure.
– Prioritise actively managed diversified and flexi-cap MFs.
– Allocate goal-specific buckets – education, retirement, marriage, etc.

? Asset Allocation Overview

Your total asset base (excluding self-occupied house):
– Flat: Rs. 1.2 Cr
– Plots: Rs. 2 Cr
– Gold: Rs. 15L
– Stocks + MFs + SSY: Approx. Rs. 31.5L
– Lending + cash + emergency: Rs. 43L

This is a net worth of over Rs. 3.8 Cr already. With 11 more years, you are on track for Rs. 10 Cr target.

However, real estate is illiquid and should not be counted for retirement needs.
– Rental yield is low.
– Exit is slow and not aligned with inflation.

So, we recommend planning only with your financial and liquid assets.

? Emergency Fund and Liquidity

– You hold Rs. 3L as emergency corpus.
– This is slightly low for your profile.

You should keep at least 6 months’ expense = Rs. 9–10L.

Please move Rs. 6L from your ultra-short fund or fresh lending recoveries into this emergency buffer.

Also, keep Rs. 1–2L cash at bank level to manage any instant medical or school expenses.

? Lending Activity Review

– Rs. 15L is lent out at good yields (15%–18%).
– If borrowers are trustworthy, continue. But keep an agreement in place.

Don’t lend further. Recovery during crisis can be hard.

Instead, deploy any extra cash into your MF portfolio.

? Gold Holdings

– You hold Rs. 15L in physical gold.
– This is good for diversification but do not increase allocation.

Physical gold does not give regular income. Also, storage is a concern.

Going ahead, if you want exposure, prefer gold mutual funds or sovereign gold bonds.

? Retirement Planning and Rs. 10 Cr Goal

You plan to retire at 55 with a corpus target of Rs. 10 Cr.

This is a valid target considering your desired lifestyle and family size.

You’ll need about Rs. 3L/month in post-retirement income to sustain needs.

Assuming you continue investing Rs. 90–100K/month in mutual funds and equities:
– Along with existing Rs. 31.5L portfolio
– And annual surplus from EMI savings after loan closure

You are well positioned to reach this Rs. 10 Cr mark in 11 years.

However, all investments should be done with clear purpose and monitored quarterly.

After 55, switch slowly from aggressive to stable instruments.

Avoid depending on real estate sale for income. It is not predictable.

? Key Strategy Changes to Consider

– Increase term insurance cover now to Rs. 2.5 Cr.
– Enhance emergency fund to Rs. 9–10L.
– Shift MFs from passive to actively managed funds.
– Reduce excess small-cap fund exposure.
– Don’t add new lending commitments.
– Align MF investments towards goals – retirement, kids’ education, marriage.
– Get regular portfolio reviews every quarter from a CFP professional.

? Taxation and New Rules

Remember the new capital gains tax rule for equity MFs:
– LTCG above Rs. 1.25L is taxed at 12.5%.
– STCG is taxed at 20%.

Plan your MF redemptions wisely to avoid unnecessary tax outgo.

Also, interest from lending is taxed as per your slab. So plan your declarations accordingly.

? Finally

You have built a strong base already. Your income and discipline are your biggest strengths.

Now it is all about direction and clarity. Fine-tuning your portfolio is key.

Avoid over-dependence on real estate and passive products.

Take support from a certified financial planner who offers regular fund reviews.

Stick to your 11-year goal. Stay invested. And keep tracking every 6 months.

With these focused steps, your Rs. 10 Cr goal is absolutely achievable.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment