I Want To Invest 20 Crores For At Least 12% Return - Is My Plan Good?

Ans: You are 42 years old, working as a GM in a hotel with a monthly salary of Rs 1.2 lakh.

Net in hand post TDS is Rs 1.10 lakh.

You own a flat in Bhiwadi worth Rs 25 lakh, a shop in Gurgaon worth Rs 30 lakh, and a paternal house in South Delhi.

Your savings include Rs 6 lakh in digital gold, Rs 1.5 lakh in equity, and Rs 50,000 in mutual funds.

You have a ULIP-linked LIC with a premium of Rs 50,000 per year and a term insurance of Rs 75 lakh with a premium of Rs 15,000 per annum.

Monthly household expenses are Rs 50,000.

You wish to invest Rs 50,000 per month but prefer not to make regular payments like SIPs.

Investment Strategy

Lump Sum Investments

Lump sum investments suit your preference for irregular payments.

Consider investing in diversified equity mutual funds.

These funds provide good returns over time.

Balance risk with a mix of large-cap, mid-cap, and small-cap funds.

Digital Gold

You already have Rs 6 lakh in digital gold.

Gold is a good hedge against inflation.

Avoid further investment in gold.

Diversify into other asset classes.

Equity and Mutual Funds

You have Rs 1.5 lakh in equity and Rs 50,000 in mutual funds.

Increase your mutual fund investments.

Choose actively managed funds for better returns.

Avoid direct equity if you cannot regularly monitor the market.

ULIP

ULIPs combine insurance and investment.

They usually have high charges.

Consider surrendering the ULIP and reinvesting in mutual funds.

This can offer better returns and lower charges.

Term Insurance

Your term insurance cover of Rs 75 lakh is good.

Ensure it is sufficient for your family's needs.

Review and adjust coverage if required.

Fixed Income Investments

Consider fixed income options like fixed deposits and government bonds.

These provide stability and predictable returns.

Allocate a portion of your funds here to balance risk.

Emergency Fund

Maintain an emergency fund equal to 6-12 months of expenses.

Keep this fund in a liquid savings account or short-term FD.

This fund provides financial security for unforeseen events.

Tax Saving Investments

Invest in tax-saving instruments under Section 80C.

Consider ELSS mutual funds for tax savings and good returns.

This will reduce your taxable income.

Review and Adjust Portfolio

Regularly review your investment portfolio.

Adjust based on market conditions and personal circumstances.

Consult a Certified Financial Planner (CFP) for professional advice.

Final Insights

Your goal is to invest Rs 50,000 per month with flexibility.

Lump sum investments in diversified equity mutual funds are suitable.

Avoid further investments in gold and consider surrendering ULIP.

Maintain an emergency fund and review your insurance coverage.

Consider tax-saving investments to optimize your tax liability.

Regularly review and adjust your portfolio with professional guidance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: For your parents with age group 60-58, senior citizens, you should plan as follows , This is a suggestion as per information provided by you: ?3 lakhs: Annuity for guaranteed lifelong income. ?5 lakhs: SCSS (8.2% annually, quarterly payout).
?4 lakhs: AAA-rated corporate bonds or RBI Floating Rate Bonds. ?3 lakhs: POMIS or conservative debt mutual funds for monthly income. This revised plan ensures stable income, lower risk, and good liquidity while addressing inflation. Periodically review these investments to adapt to any changes in interest rates or financial needs

Ans: Appreciate your clarity and discipline with money. You are far ahead of many at your age. You already have a strong income, valuable assets, and good savings habits. Now let’s look at a complete 360° view of how to reach Rs. 10 crore target by 60.

We’ll go step by step with each area of your financial life.

Income and Cash Flow Overview
Monthly income of Rs. 3 lakhs is very healthy.

Loan EMIs total around Rs. 1.19 lakhs, approximately 40% of income.

Household expenses are just Rs. 30,000 – very efficient.

SIPs of Rs. 35,000 are a great start, but more growth investment is needed.

Scope exists to steadily increase investments each year.

Savings of Rs. 13 lakhs (FD + cash + savings) gives a solid buffer.

Actionable Insight:
Maintain a detailed monthly budget tracking income, expenses, EMIs, and surplus. Review it quarterly to stay in control.

Loan Repayment Strategy
Home loan of Rs. 38 lakh with Rs. 50,000 EMI and reduced tenure to 12 years – good progress.

Car loan of Rs. 8 lakh with Rs. 19,000 EMI.

Rs. 69,000/month in loan EMIs is manageable at your income level.

Recommendations:

Don’t rush to close home loan if interest is below 9% – you get tax benefits.

Prioritise closing the car loan if interest rate is high – it's not tax beneficial.

Avoid using FD or gold for loan repayment unless it’s an emergency.

Emergency Fund Evaluation
Rs. 10 lakh in cash + Rs. 3 lakh in savings is already strong.

With Rs. 15 lakh in FD, total emergency reserve is Rs. 28 lakh.

That’s more than sufficient; no need to expand emergency fund further.

Use sweep-in FD or split across multiple banks for liquidity and safety.

Insurance Assessment
Rs. 30 lakh health insurance is adequate – continue maintaining this.

Term insurance of Rs. 50 lakh via ULIP is too low.

Ideal cover should be around Rs. 4 crore (12x annual income).

Recommendations:

Take an independent term insurance plan of Rs. 3.5 crore.

Continue existing health cover.

Evaluate surrender of ULIP and LIC if returns are low (generally ~5%).

Redirect those premiums (Rs. 2.65 lakh annually) to mutual fund SIPs.

Investment Portfolio Review
Monthly Investments:

Rs. 35,000 into mutual funds (multi-cap, flexi-cap, small-cap, etc.)

Annual Contributions:

Rs. 1 lakh into PPF

Total Investment Corpus:

Rs. 50 lakh in mutual funds

Rs. 15 lakh in FD

Rs. 30 lakh in gold

Rs. 10 lakh in cash

Rs. 3 lakh in savings

Positives:

Strong equity exposure for long-term growth.

Balanced support from gold and FD.

Suggestions for Improvement:

Increase SIPs annually by at least 10%.

Limit small-cap exposure to 10-15%.

Gradually move from FD to debt mutual funds for better returns and tax-efficiency.

Surrender low-return policies (LIC, ULIP) and reinvest in growth-oriented funds.

Continue PPF contributions for safe, tax-free returns.

Realistic Path to Rs. 10 Crore by Age 60
You are 43 now, with 17 years to invest.

Current investment corpus is around Rs. 1.08 crore.

With Rs. 35,000 SIP, you might reach Rs. 2.5–3 crore by 60 – not enough.

To Reach Rs. 10 Crore Goal:

Gradually increase SIPs to Rs. 1 lakh/month in 5 years.

Reinvest proceeds from surrendering LIC/ULIP (Rs. 2.65 lakh annually).

Redirect EMI amounts (car loan, etc.) once loans are closed.

Make lump sum additions from bonuses or surplus income.

Mutual Fund Taxation Notes
From 2024, equity LTCG above Rs. 1.25 lakh taxed at 12.5%.

Short-term equity gains taxed at 20%.

Debt fund gains taxed as per slab.

Advice:

Avoid frequent withdrawals.

Use ultra-short term or debt funds for short- to medium-term needs.

Fund Selection Guidelines
Avoid direct funds unless you manage the portfolio yourself.

Use regular plans through a certified financial planner for guidance.

Avoid index funds if you seek alpha and personalized management.

Stick to a blend of active multi-cap, flexi-cap, and large-cap funds.

Suggested Asset Allocation
60% – Equity mutual funds

15% – Debt mutual funds

10% – Gold (already in place)

10% – Emergency fund (FD + cash)

5% – PPF

Annual Portfolio Rebalancing Recommended

Year-Wise Action Plan
Year 1–2:

Repay car loan using surplus or gold if needed.

Surrender LIC and ULIP; shift Rs. 2.65 lakh to mutual funds.

Take new term plan of Rs. 3.5 crore.

Increase SIPs to Rs. 50,000/month.

Year 3–5:

Redirect closed EMIs (Rs. 19,000) to SIPs.

Gradually move FD into debt mutual funds.

Add lump sum investments from annual bonuses.

Year 6–10:

Continue SIPs at Rs. 1 lakh/month.

Keep gold as is.

Rebalance asset allocation annually.

Final Insights
You are on the right track.

No need to sell gold or break FD prematurely.

Gradually increase SIPs and equity exposure.

Maintain emergency reserve.

Improve term cover and simplify insurance portfolio.

Avoid panic, follow the strategy, and review annually.

With this approach, you can confidently build Rs. 10 crore or more by 60 and ensure financial independence.

With better planning and yearly reviews, you will secure a strong retired life.

 

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

Ans: ? Strong Financial Foundation and Thoughtful Intentions

– You are showing great care for your grandchildren.
– The SIPs for their future are a strong step.
– Your assets provide a very stable base.
– Rental income of Rs. 2.5 lakh is excellent post-retirement support.
– Holding equity and PMS ensures potential long-term growth.
– Overall, your setup is solid and responsible.

? Review of Monthly SIPs Towards Grandchildren’s Goals

– Rs. 75K for the elder and Rs. 85K for the younger child is generous.
– With 5% annual increase, compounding will boost growth.
– Already two years of SIP is completed.
– That gives you 13 years more of investment time.
– This is a good horizon for equity-focused SIPs.
– With this strategy, Rs. 5 crore per child is achievable.
– But this depends on consistent equity returns over time.
– Market volatility is a factor, but time helps smoothen it.
– SIPs over 15 years usually reward with wealth creation.
– The rising SIP contribution every year also boosts target achievement.

? Portfolio Safety and Risk Allocation Assessment

– Equity shares of Rs. 1.1 crore are good for long-term growth.
– PMS of Rs. 88 lakh adds to the equity exposure.
– However, PMS requires monitoring.
– PMS also comes with higher fees and lower transparency.
– Direct equity too demands active watch and regular reviews.
– In retirement, active management adds stress and risk.
– Shifting some equity to mutual funds via MFD with CFP support is better.
– Actively managed mutual funds bring professional oversight.
– They offer smoother diversification and lower effort for retirees.

? Overexposure to Real Estate: A Review

– Real estate is illiquid and cannot be used quickly in emergencies.
– You own properties worth Rs. 10.1 crore.
– This is a huge chunk of total wealth.
– Commercial property, two houses, and a vacant plot is too much.
– Real estate requires maintenance, taxes, and time to sell.
– Rental income is fine, but too much dependency limits flexibility.
– Consider slowly reducing real estate exposure.
– Use the sale proceeds for safer, more liquid options.
– Use mutual funds aligned with specific goals.
– With the help of a Certified Financial Planner, this can be smooth.

? Emergency Planning and Liquidity Concerns

– You mentioned Rs. 1 lakh/month for expenses.
– But no liquid emergency fund is visible.
– At least 18 months of expenses should be parked separately.
– Keep Rs. 18 to Rs. 24 lakh in safe, low-risk instruments.
– Choose options that are not linked to market volatility.
– This ensures you don’t have to sell assets during downturns.
– Use short-term mutual funds through MFDs with CFP advice.

? Insurance Review for Risk Coverage

– You said annual payments include medical insurance.
– But coverage amount was not mentioned.
– At your age, at least Rs. 15 to 20 lakh health insurance is essential.
– Consider a super top-up plan if needed.
– Don’t let health expenses eat into investment goals.
– Also, review if the policy covers pre-existing conditions and has lifetime renewability.

? Rebalancing Need in Current Portfolio

– You are heavily skewed towards equity and real estate.
– Safe, non-market-linked investments are not visible.
– Rebalancing is needed to reduce risk.
– Allocation to low-risk options brings peace and stability.
– Retired life needs more predictable cash flow.
– Equity is good for growth, but you need balance too.
– Asset mix must suit your age and withdrawal needs.
– Allocate some equity to hybrid mutual funds.
– Balanced approach keeps safety and growth together.

? Reviewing the PMS Approach

– PMS charges are usually 2-2.5% annually.
– They may also take a performance-linked fee.
– These eat into your returns.
– PMS is suitable for very high-risk appetite individuals.
– Also, it lacks daily visibility and flexibility.
– Mutual funds through an MFD with CFP help are more transparent.
– These also allow easier goal tracking.
– Consider shifting some of the PMS corpus to mutual funds.
– This will make the portfolio more aligned to your gifting goals.

? Gifting Strategy and Tax Implications

– Gifts to grandchildren are not taxable in their hands.
– But growth from these investments will be taxed.
– Equity mutual funds: LTCG above Rs. 1.25 lakh taxed at 12.5%.
– STCG taxed at 20%.
– This applies even to investments for grandchildren.
– Plan the gift transfers through proper documentation.
– Joint holding or third-party SIPs in their name is possible.
– Consult a tax advisor to handle the mechanics smoothly.

? Ensuring Estate Planning and Legal Clarity

– You have multiple assets and long-term goals.
– Estate planning is very important now.
– Prepare a registered Will covering all assets.
– Mention clear allocations and ownerships.
– Include mutual funds, PMS, shares, and properties.
– This will avoid future disputes or confusion.
– Also consider creating a Trust if needed.
– Especially for minor grandchildren, Trusts offer smooth control.
– A Certified Financial Planner and lawyer can help draft this properly.

? Inflation-Proofing Your Grandchildren’s Corpus

– You aim for Rs. 5 crore per grandchild in 15 years.
– Inflation will reduce purchasing power.
– That means future education and living costs will be higher.
– Long-term equity SIPs help fight inflation.
– Continue with 5% annual step-up as planned.
– This keeps investments ahead of inflation.
– Reinvest dividends if any, to ensure compounding is not interrupted.

? Reviewing the Real Estate Strategy from Legacy Lens

– You have three large real estate assets.
– This is not easy to divide among two grandchildren.
– Property disputes happen often in such cases.
– Liquidity is a problem during asset division.
– Instead, slowly shift to financial assets.
– Mutual funds or bonds are easier to transfer.
– They are clean, transparent, and hassle-free.
– Legacy planning becomes smoother when assets are financial.
– Discuss a phased exit plan from real estate with a Certified Financial Planner.

? Child-Specific Investment Strategy

– Since the children are minors, use guardian accounts.
– SIPs can be in their name with you as guardian.
– Choose child-oriented mutual funds for better structure.
– These come with lock-ins and purpose alignment.
– You can also use diversified equity mutual funds.
– Avoid investing in their name directly under direct plans.
– Regular plans through MFD + CFP offer better advice and clarity.
– MFDs with CFP certification provide goal-linked fund tracking.
– Direct funds do not offer regular reviews and behavioural coaching.

? Monitoring and Rebalancing Your Investment

– Once a year, review SIP progress.
– Check if fund performance is consistent.
– Replace underperformers if needed.
– Review risk levels with your Certified Financial Planner.
– Make small shifts based on market cycle.
– Don’t stop SIPs during market falls.
– In fact, falling markets add more units.
– That helps the SIP strategy work better.
– Use periodic rebalancing to keep portfolio in shape.

? Finally

– Your goal of Rs. 5 crore per grandchild is very possible.
– The SIP structure and 5% step-up are well planned.
– Continue this discipline for another 13 years.
– Review PMS, direct equities, and real estate exposure.
– Shift to more mutual funds with CFP advice.
– Create a robust Will and Trust structure.
– Protect health and emergency fund needs.
– You’ve done very well so far.
– With a few tweaks, your strategy will be even stronger.

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