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Can I earn Rs 30,000 monthly returns on Rs 50 lakhs?

Janak

Janak Patel  |31 Answers  |Ask -

MF, PF Expert - Answered on Mar 26, 2025

Janak Patel is a certified financial planner accredited by the Financial Planning Standards Board, India.
He is the CEO and founder of InfiniumWealth, a firm that specialises in designing goal-specific financial plans tailored to help clients achieve their life goals.
Janak holds an MBA degree in finance from the Welingkar Institute of Management Development and Research, Mumbai, and has over 15 years of experience in the field of personal finance. ... more
Asked by Anonymous - Mar 14, 2025Hindi
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Hello Sir, I have saving 50 lakhs, i am looking for monthly return of 30 k What the best to possible way to invest this amount. Is it good option to invest in index fund . Please advice

Ans: Hi,

You have not clarified the duration of your requirement, how long do you need monthly return?
But lets assume this is as long as possible.
There are many solutions to this and that involves knowing a lot more about you and your life state but will anyways will provide you a couple of options.
1. Fixed income investment - Invest in FD's at 7%, this will earn you 3.5 lakhs a year and should be covering your requirement. But the savings will remain at 50 lakhs. If the rate on FD falls down, then you will end up using your savings to cover your requirements. So this option may not be feasible for a long period. The risk being low, it may not grow your saving and it can erode your saving too.
2. Invest in Equity (mutual funds) - You mentioned Index funds, they can be considered along with other equity mutual funds too. But understand, there is a higher level of risk involved. Markets are and will be volatile and the returns will not be the same each year. If you have the temperament/patience to stay invested in market fluctuations then venture in this direction. When you are looking to fulfill your requirement each month, your investment will always stay on your mind and this will trigger behavioral traits and hence I mention temperament. Many people get unsettled seeing their investments erode in a short period of time and take decisions which are not rationale. Hence enter knowing the risk and yourself.
3. Middle ground - Invest in balanced option - something like a hybrid fund. If you are conservative (low risk), then go for conservative hybrid mutual fund schemes (more Debt and less equity) and expect returns slightly above your FD in the range of 8-9% which will serve your requirement and can add a bit to your savings. If you are not conservative and understand that market linked investment can provide a little extra boost to your investment then balance your risk with Balanced advantage Mutual Fund schemes (balanced approach to equity and debt). These schemes can provide you better returns up to double digits 10-12% and hence after meeting your requirements, your investment can grow too.

Please understand, Equity brings in market risks and hence have expectations but also understand the risks involved. Make your decision based on the appetite you have for loss bearing and safety and accordingly go ahead. Consult a good advisor or a financial planner who can guide you after knowing more about you and your requirement and also help understand tax implications.

Thanks and Regards
Janak Patel
Certified Financial Planner.
Asked on - Mar 26, 2025 | Not Answered yet
Thank you Sir, Much Appreciated
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Ramalingam

Ramalingam Kalirajan  |8315 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 23, 2024

Asked by Anonymous - Mar 03, 2024Hindi
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I am 53 year. I want to invest Rs 10,000 every month. What is the best option to invest so that after 4/5 years I get good return
Ans: Maximizing Returns with Monthly Investments
Investing regularly is a prudent financial decision, and I commend your commitment to building wealth even at 53. Let's explore the best options for investing ?10,000 every month to achieve good returns within a 4-5 year timeframe.

Understanding Investment Objectives
Short-Term Horizon: With a 4-5 year investment horizon, it's essential to prioritize investments with moderate risk and potential for decent returns.

Goal Clarity: Define your specific financial goals and the purpose of the invested funds to align investment strategies accordingly.

Risk Appetite: Assess your risk tolerance to determine the appropriate mix of investment options for your portfolio.

Evaluating Investment Options
Considering your investment horizon and return expectations, explore the following options:

Equity Mutual Funds: Offer the potential for higher returns but come with higher volatility. Suitable for investors with a longer investment horizon and higher risk tolerance.

Debt Mutual Funds: Provide stability and steady returns with lower risk compared to equity funds. Ideal for investors seeking capital preservation and income generation.

Balanced Funds: Combine equity and debt components to provide a balanced approach to risk and return. Suitable for investors seeking moderate growth with reduced volatility.

Benefits of Actively Managed Funds
Active management offers several advantages for investors with a short-to-medium-term investment horizon:

Potential for Outperformance: Skilled fund managers actively manage the portfolio, aiming to generate alpha and outperform the market.

Risk Management: Experienced fund managers employ risk management techniques to mitigate downside risk and preserve capital, crucial for investors with a shorter investment horizon.

Flexibility: Active management allows for tactical allocation adjustments based on market conditions and economic outlook, optimizing returns.

Disadvantages of Index Funds
Index funds may not be suitable for investors seeking good returns within a 4-5 year timeframe due to the following reasons:

Market Tracking: Index funds passively track a specific index, limiting the potential for alpha generation and outperformance compared to actively managed funds.

Lack of Flexibility: Investors in index funds cannot benefit from active management strategies such as sector rotation or stock selection, which are crucial for optimizing returns in volatile markets.

Market Volatility: During periods of market volatility, index funds may experience higher drawdowns compared to actively managed funds, posing a risk to capital preservation.

Conclusion
Considering your investment horizon of 4-5 years, a balanced approach with a mix of equity and debt mutual funds may be suitable to achieve good returns while managing risk. By investing systematically and regularly reviewing your portfolio, you can work towards achieving your financial goals effectively.

Remember to consult with a Certified Financial Planner to tailor an investment strategy that aligns with your specific needs and objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8315 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 20, 2025

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Hello I am saving 2 lakh per month monthly I want to invest 1 lakh per month in mutual fund can you please advise what is the best approach to achieve 50 lakhs in short term year
Ans: You aim to accumulate Rs 50 lakh in one year by investing Rs 1 lakh per month. Achieving this goal requires careful planning and investment selection. Let's explore the right approach and strategies for your situation.

Target Assessment and Strategy
Rs 50 lakh in one year is an aggressive target.
To reach Rs 50 lakh, you need to generate high returns.
This will require careful consideration of investment options.
Investment Approach for Short-Term Goals
1. Focus on Equity Mutual Funds

For short-term goals like this, equity mutual funds provide the best potential for growth.
Opt for large-cap funds for stability with moderate growth.
Include mid-cap funds for higher growth opportunities with manageable risk.
A small allocation to small-cap funds can further boost returns. However, small-cap funds are more volatile and should be approached cautiously.
2. Hybrid Funds for Risk Balance

Consider adding balanced or hybrid funds to reduce overall risk.
These funds invest in both equity and debt, providing stability.
Suitable for short-term goals with a balanced risk appetite.
Regular SIP Strategy for Better Returns
SIPs will help you invest systematically and manage market volatility.
By investing Rs 1 lakh monthly, you average the cost of your investment over time.
In a short-term goal like this, SIP in equity funds can work well, but the market's timing and volatility matter.
Active vs. Passive Funds
Active Funds

Actively managed funds offer higher return potential in volatile markets.
They provide flexibility to fund managers to adapt to changing market conditions.
Suitable for achieving high returns in the short term.
Passive Funds (Index Funds)

Index funds track market indices and are generally not the best for short-term high growth.
They are a safer investment but may not yield the high returns needed to reach Rs 50 lakh quickly.
Active funds, in comparison, offer more tailored strategies and can outperform in certain market conditions.
Risk Management and Allocation
Given the short-term nature of your goal, be prepared for market fluctuations.
Balance your portfolio by allocating across large, mid, and small-cap funds.
Monitor your investments frequently and adjust if needed.
Diversifying will help protect your investment from large losses.
Importance of Monitoring and Rebalancing
Rebalancing your portfolio regularly is crucial, especially in the short term.
Stay updated on market trends and adjust your investments as necessary.
Consult a Certified Financial Planner to review and optimize your strategy.
Tax Efficiency Considerations
Long-term capital gains (LTCG) from equity funds are taxed at 12.5% above Rs 1.25 lakh.
Short-term capital gains (STCG) are taxed at 20%.
Since this is a short-term goal, STCG taxes will likely apply, reducing your returns slightly.
Avoid Direct Investment Plans
Direct mutual fund investments bypass advisors but may lack personalized strategy.
Without expert guidance, you may face higher risk and poor fund selection.
Regular funds, through an experienced advisor or a Certified Financial Planner, offer tailored strategies.
Final Insights
To achieve Rs 50 lakh in one year with Rs 1 lakh monthly investments, equity mutual funds are the most suitable option. Focus on large-cap, mid-cap, and hybrid funds. Be mindful of risks and monitor your portfolio regularly. Given the short-term nature of your goal, active management will give you the best chance to reach your target.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8315 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 30, 2025

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Hi Sir, My name is Abhishek, and i am 40 years old, I have 12 lakhs in FD, 6 lakhs in MF and stocks(5+1), and 10 lakhs cash, also, i have a flat in Delhi with 15 lakhs home loan, A car loan of 8 lakhs. and i am a software engr. In an MNC, having salary of 1.5 lakhs in a month. ABOVE IS ALL my asset. But i want to be financially free. Is it possible? Please suggest any best practical idea for me. Currently, WFH in ranchi.
Ans: At 40, with your current income and asset base, the goal of financial freedom is definitely achievable. Let’s work towards a 360-degree financial strategy to help you build a solid and practical roadmap.

Below is a complete evaluation and guidance to align your financial life with your freedom goal.

Current Financial Position – Snapshot and Assessment
You have Rs. 12 lakhs in Fixed Deposit.

You hold Rs. 6 lakhs in mutual funds and stocks.

You are keeping Rs. 10 lakhs in cash.

You have a flat in Delhi. You have Rs. 15 lakhs home loan on it.

You also have a car loan of Rs. 8 lakhs.

Your monthly salary is Rs. 1.5 lakhs from an MNC job. You are working from Ranchi now.

You are 40 years old and working in a stable job.

This is a very decent starting point. You are earning well, and you have good savings. But to reach financial freedom, we need better alignment.

Let’s move step-by-step.

Step 1 – Clarify What Financial Freedom Means to You
Financial freedom is not only about quitting your job.

It means you have enough income from investments to cover your monthly needs.

You should be able to choose to work or not, without worrying about money.

So first, we need to estimate your monthly future expenses post-retirement.

Let’s assume Rs. 60,000 to Rs. 80,000 per month today, adjusted for inflation later.

That means you need to create income sources to support at least Rs. 1 crore to Rs. 2 crore in future corpus.

This is not impossible. You have time and income to build this.

Step 2 – Improve the Quality of Your Assets
Let us now improve your asset quality to suit your freedom goal.

Rs. 12 lakhs in Fixed Deposit is very conservative.

FD earns low returns, and interest is fully taxable.

Keep only 4 to 5 lakhs in FD for emergency use.

Move the rest (7 to 8 lakhs) to good quality mutual funds through SIP.

Your Rs. 10 lakhs in cash is too much to keep idle.

Keep Rs. 1.5 to 2 lakhs in savings for short-term needs.

Move the balance Rs. 8+ lakhs to a liquid mutual fund for better returns.

Over the next 3 to 6 months, you can start shifting this towards equity-oriented funds.

Rs. 6 lakhs in MF and stocks is a good beginning.

But if these include index funds or direct funds, you must evaluate them carefully.

Index funds only copy the market, and don’t actively manage risks.

They underperform in falling or flat markets.

A good actively managed mutual fund is better in Indian conditions.

Direct mutual funds look low-cost, but no expert advice is included.

When you invest through a Mutual Fund Distributor (MFD) who is also a Certified Financial Planner, you get proper hand-holding.

Regular funds through a CFP-linked MFD provide portfolio monitoring, review, and behavioural coaching.

This helps avoid panic selling or greed-driven buying.

Step 3 – Work on Your Loans
You have Rs. 15 lakhs home loan.

This is acceptable if interest is below 8.5% per annum.

Home loan offers tax benefits also. So don’t rush to close it.

Continue paying EMIs without stress. Try to pre-pay 1 EMI every 6 months if possible.

This will reduce your loan term.

But do not use emergency cash or investments to close it.

Car loan of Rs. 8 lakhs is a liability without return.

Try to clear this in the next 1.5 years.

Use your bonus or incentives for that.

Avoid buying new cars or gadgets on EMI again.

Step 4 – Build a Systematic Investment Plan
You should be investing 30% to 40% of your monthly income.

That means Rs. 45,000 to Rs. 60,000 per month.

Start SIPs in diversified actively managed mutual funds.

Allocate more in equity-oriented funds for long-term growth.

Keep a small portion in hybrid or conservative hybrid funds for balance.

If you are supporting family, consider a term insurance plan (not ULIP or endowment).

Term insurance is cheaper and offers better coverage.

Also take health insurance for self and family, even if company gives cover.

Step 5 – Emergency Planning and Risk Management
You must keep an emergency fund equal to 6 months expenses.

You already have FD and cash, so earmark Rs. 3 to 4 lakhs for this.

Put this in a separate savings or liquid mutual fund account.

Don’t touch this unless there is an actual emergency.

Review your health and life insurance policies yearly.

Step 6 – Review and Improve Your Monthly Budgeting
Track your monthly expenses. Use simple mobile apps or Excel.

Avoid impulse expenses like gadgets, travel, or lifestyle items.

Stick to a monthly budget. Save before you spend.

Increase your SIPs every year by 10%.

This will match inflation and improve wealth creation.

Step 7 – Don’t Depend on Real Estate for Financial Freedom
Real estate has low liquidity and high maintenance.

Rental yield is only 2 to 3%.

Also, resale takes time and effort.

Don’t invest more in real estate. Focus on financial instruments instead.

Step 8 – Plan Your Retirement and Passive Income Sources
At age 40, you have 15–17 years to retire.

That’s enough time to build a retirement corpus.

If you invest Rs. 50,000 monthly for 15 years in mutual funds, wealth can be significant.

Once you retire, you can shift to monthly income plans from mutual funds.

These generate regular withdrawals with tax efficiency.

You must also reallocate to more conservative funds as you near retirement.

Avoid annuity products. They give low returns and poor liquidity.

Step 9 – Tax Planning and Filing
Use tax deductions wisely under Sec 80C, 80D and home loan benefits.

Keep your investments tax-efficient.

For example, equity fund gains up to Rs. 1.25 lakhs are tax-free annually.

Above this, LTCG is taxed at 12.5%.

Short-term capital gains from equity funds are taxed at 20%.

Debt fund gains are taxed as per your income slab.

You should do tax planning with a CFP who can review your total asset base.

Step 10 – Set Clear Milestones and Review Yearly
Set short, mid, and long-term goals.

For example: close car loan in 1 year, build Rs. 50 lakhs corpus in 5 years, etc.

Track these goals once every 6 months.

If you miss one goal, don’t panic. Adjust and continue.

Stay disciplined with SIPs and avoid timing the market.

Don’t follow tips or market trends blindly.

Final Insights
You are doing well for your age and income level.

But to reach financial freedom, you need more structured planning.

Convert your cash and FDs to wealth-generating assets.

Stop investing in real estate and focus on financial investments.

Eliminate loans step-by-step.

Increase your SIPs regularly and keep your portfolio reviewed by a Certified Financial Planner.

Review your goals, risks, and insurance every year.

Stay consistent and patient. Freedom will come earlier than expected.

You are on the right track. Just need direction, discipline, and dedication.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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