Sir. Im 35 yrs old with 2 kids aged 3 and 10 months respectively. I have 3 lakhs in MF and 4.5 lakhs in ppf. 5 lakhs FD. Started MF SIP in my kids names each 5k. Where else should I invest ?

Ans: You may consider Hdfc Index Fund - Sensex Plan - Regular Plan - Growth

Yes, these funds can be continued for 10 to 15 years.

Ans: Hello Satya . With multiple goal align in next 15 yrs. I would suggest to consider Large cap, small cap , midcap , and flexicap categories for your portfolio.

Ans: Hi Satya, thanks for writing to me.

To create a corpus of Rs.1 Crore in 15 years, you need to begin by investing Rs.12,000 in this year and then annually stepping up your SIP's by at least Rs.2,000 every year.

You can consider monthly SIP's as I mention below:
1-Edelweiss Nifty 100 Quality 30 Index Fund-Rs.3,000
2-Axis ESG Fund-Rs.3,000
3-UTI MNC Fund-Rs.3,000
4-SBI Focused Equity Fund-Rs.3,000

Ans: Hello Ravi and thanks for writing to me.

I only discuss mutual funds in this section. As I understand, you have Rs.15,000 to invest every month and you require a corpus in around 15 years to pay for their higher education. As your time horizon is long, you can consider starting monthly SIP's in:

1-UTI Small Cap Fund-Rs.5,000
2-Sundaram Small Cap Fund-Rs.5,000
3-DSP Midcap Fund-Rs.5,000

Mid and small cap schemes can be more volatile than large cap funds, but also offer the chance of generating higher returns over the long term. After some 9 or 10 years, you can consider pausing the SIPs in the small and mid cap funds and then consider investing in large cap and balanced advantage funds as they tend to be less volatile.

I do not find any goal or target amount. If you provide that information, then I may recommend other schemes.


Coming to the second part of your question, mutual funds offer 2 types of plans, one is called the regular plan and the other is called a direct plan. In a regular plan, there is a mutual fund distributor involved and the mutual fund company pays the agent a commission and hence the returns are a little lower than the direct plan. But mutual fund distributors provide valuable advice to clients on how to structure, rebalance and maintain a portfolio. So the excess 1%-2% returns should not be the only criterion to choose a direct plan.

I urge you to consult a financial advisor who can recommend schemes based on your own risk appetite and goals for your kids' education.

Ans: Current Financial Snapshot
Age: 40 years.
Monthly Savings: Rs. 3,000.
Corpus Savings: Rs. 1 lakh.
Daughter’s Age: 6 years next month.
Goal: Secure funds for her studies and teenage needs.
Your current savings habit is commendable. Regular investments can grow into a solid corpus.

Step 1: Define Clear Financial Goals
1. Education Costs

Focus on accumulating funds for her higher education.
Estimate the cost for undergraduate and postgraduate studies.
2. Teenage Needs

Plan for school expenses and extracurricular activities.
Allocate funds separately for these milestones.
3. Emergency Fund

Maintain Rs. 50,000 as an emergency fund.
This ensures liquidity for unexpected situations.
Step 2: Start Investing Systematically
Use a Balanced Investment Approach
1. Equity Mutual Funds

Allocate 50% of your Rs. 1 lakh corpus (Rs. 50,000).
Invest monthly Rs. 2,000 into actively managed diversified funds.
Choose large-cap, multi-cap, and hybrid funds for stability.
Advantages of Actively Managed Funds

Professional fund managers aim for higher returns.
These funds adapt to market conditions.
Investing through a Certified Financial Planner ensures expert guidance.
Avoid Direct Funds

Direct funds lack personalised advice.
Regular funds give better support through a Certified Financial Planner.
2. Debt Mutual Funds

Allocate 30% of your corpus (Rs. 30,000).
Choose short-duration or corporate bond funds.
These funds provide safety and predictable returns.
3. Balanced Funds

Invest Rs. 20,000 from the corpus into balanced or hybrid funds.
These funds combine equity growth with debt stability.
Step 3: Leverage Government Schemes
1. Sukanya Samriddhi Yojana (SSY)

Open an SSY account for your daughter.
Invest Rs. 1,000 monthly for long-term, tax-free returns.
The scheme ensures her financial security.
2. Public Provident Fund (PPF)

Allocate Rs. 1,000 monthly to PPF for steady, risk-free growth.
Use it for your daughter’s education when needed.
Step 4: Build a Long-Term Plan
1. Increase Monthly Savings

Gradually increase savings to Rs. 5,000 or more.
Allocate additional income to investments.
2. Diversify Investment Portfolio

Add gold mutual funds later for diversification.
Gold offers protection against market volatility.
3. Review Investment Progress Regularly

Review portfolio performance every six months.
Adjust funds based on market conditions and goals.
Step 5: Avoid Common Pitfalls
1. Avoid Real Estate Investments

Real estate is illiquid and requires high capital.
It doesn’t align with your immediate goals.
2. Don’t Depend Solely on Fixed Deposits

Fixed deposits have limited returns.
Mutual funds can outperform fixed deposits over the long term.
3. Avoid High-Cost Insurance Policies

Skip ULIPs or endowment plans with low returns and high charges.
Choose term insurance for life coverage and invest the rest.
Step 6: Secure Adequate Health and Life Cover
1. Health Insurance

Ensure health insurance for your family.
Coverage should include yourself, your spouse, and your daughter.
2. Term Life Insurance

Get term insurance with coverage 15-20 times your annual income.
This secures your daughter’s future in case of unforeseen events.
Final Insights
Your steady savings habit is a great start.

Investing Rs. 1 lakh and Rs. 3,000 monthly can meet your daughter’s needs.

Use equity funds for growth and government schemes for safety.

Review progress regularly with a Certified Financial Planner.

This disciplined approach ensures a bright future for your daughter.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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