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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Aug 04, 2020

Mutual Fund Expert... more
Sahil Question by Sahil on Aug 04, 2020Hindi
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I have invested in below mutual funds via SIP from Jan 2018 and will continue the investment for another 12-13 years.

I want to build a Retirement Corpus of 4 to 5 crores. 

My risk profile is Aggressive/Moderate and want a mix of Equity & Debt Funds.

My current portfolio is as follows: 

1) Aditya Birla Sunlife Focussed Equity Fund-Growth - 2000 per month 

2) L & T Midcap Fund Cumulative - 2000 per month 

3) Mirae Asset Large Cap Fund -Growth - 2000 per month 

4) SBI Magnum Multicap Fund - Growth - 2000 per month 

5) Sundaram Rural Consumption Fund Regular Growth - 2000 per month.

6) Axis Bluechip Fund G - Direct Plan - 2000 per month (This is only 5 Months Old SIP)

Please suggest if i want to increase the current SIP amount of 12000 per month to reach the goal & if the above portfolio needs to be tweaked to better funds. 

SIP of Rs. 12K can build a corpus of Rs. 60 lakhs only in 15 years …  for 4 to 5 crs , SIP amount needs to be Rs. 75000 to Rs. 100000

Ans:
Name of the Fund Category RankMF Star Rating Recommendations
Sahil Dhamija      
1) Aditya Birla Sunlife Focussed Equity Fund-Growth - 2000 per month  Equity - Focused Fund 3 switch to Axis Focused 25 Fund  - Growth
2) L & T Midcap Fund Cumulative - 2000 per month  Equity - Mid Cap Fund 3 Switch to - Dsp Midcap Fund - Growth
3) Mirae Asset Large Cap Fund -Growth - 2000 per month  Equity - Large Cap Fund 4 Continue
4) SBI Magnum Multicap Fund - Growth - 2000 per month  Equity - Multi Cap Fund 3 Switch to UTI Equity fund  - Growth
5) Sundaram Rural Consumption Fund Regular Growth - 2000 per month. Equity - Thematic Fund - Other 2 switch to Axis ESG Fund  - Growth
6) Axis Bluechip Fund G - Direct Plan - 2000 per month Equity - Large Cap Fund 3 Switch to UTI MasterShare - Growth
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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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Dec 07, 2022

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I am a working class man and have started SIP in following funds from the last 6 months. Can invest till my retirement i.e. for the next 23 years period. My total monthly SIP is of Rs 22,000, I can increase Rs 500 in each fund (i.e. 15% step up) every year based on my salary. For the next 13-15 years I can take high risk out of 23 years. My other investments are PF (21600(employer) + 21600(employee)) yearly and can start Rs 50,000 yearly in NPS for tax saving. Looking for a combined corpus of 8-10 crore till retirement for my child's education (1 year old) and for my retirement savings, Can I achieve this with my SIP and other investments? Kindly guide /provide your expert opinion whether any of my funds are overlapping or needs to be discontinued or any new funds needs to be added to meet my target corpus. Funds: 1. Mirae Asset Global Electric & Autonomous Vehicles ETFs FundofFund (Direct Growth) - Rs 1,000 -Active 2. canara Robeco Bluechip Equity Fund (Direct Growth-Large Cap) - Rs 3,000 -Active 3. ICICI Prudential US Bluechip Equity Fund (Direct Growth-Sectoral/Thematic) - Rs 3,000 -Active 4. PGIM India Flexi Cap Fund (Direct Growth) - Rs 3,000 -Active 5. PGIM India MidCap Opportunities Fund (Direct Growth) - Rs 3,000 -Active 6. Quant Active Fund (Direct Growth-Multicap) - Rs 3,000 -Active 7. Quant Small Cap Fund (Direct Growth) - Rs 3,000 -Active 8. Quant Tax Plan (Direct Growth-ELSS) - Rs 3,000 -Active 9. Axis Long Term Equity Fund (Direct Growth-ELSS) - Rs 3,000 -Paused 
Ans: Funds are fine, with a monthly investment of 22000 with an annual step up of 15% the corpus that can be created is Rs 10 -12 cr in 23 years.

..Read more

Ramalingam

Ramalingam Kalirajan  |8191 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 24, 2024

Asked by Anonymous - May 24, 2024Hindi
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Greetings Sir, I'm 29 yrs old and have started my investment journey with the purpose of wealth generation for furthering my prospective business interests in future. Please review my portfolio -- all are direct-growth funds-- SIP's per month 1. Hdfc balanced advantage 10000 2. Quant multi asset 9000 3. JM flexicap fund 7500 4. Invesco india midcap. 1000 5. Quant midcap 1500 6. Kotak emerging equity fund 1000 7. Axis small cap 1000 8. Tata small cap 2500 Above total Sip is 30% of my monthly income in hand . And I wish to increase the sip annually with increase in my savings and salary. Please give your expert guidance on time horizon, change in sip amounts and/or funds for creating a corpus of 1 cr. Thank you... :-)
Ans: Comprehensive Review and Guidance for Your Investment Portfolio
Greetings! Your proactive approach towards investing for future business interests is commendable. Let's dive into your portfolio and strategies for achieving your goal of creating a corpus of Rs. 1 crore.

Portfolio Overview and Analysis
Your current SIP investments are well-diversified. Here's a breakdown:

HDFC Balanced Advantage Fund: Rs. 10,000
Quant Multi Asset Fund: Rs. 9,000
JM Flexicap Fund: Rs. 7,500
Invesco India Midcap Fund: Rs. 1,000
Quant Midcap Fund: Rs. 1,500
Kotak Emerging Equity Fund: Rs. 1,000
Axis Small Cap Fund: Rs. 1,000
Tata Small Cap Fund: Rs. 2,500
Total monthly SIP: Rs. 33,500 (30% of your monthly income).

Commendable Aspects
Your commitment to investing 30% of your income is admirable.

Diversification across various fund categories shows strategic thinking.

Investing in growth funds aligns with your wealth generation goal.

Time Horizon for Wealth Generation
To create a corpus of Rs. 1 crore, you need a long-term perspective.

Assuming an average annual return of 12-15%, it may take around 10-12 years to reach your goal.

Regularly increasing your SIP amount will shorten this timeline.

Reviewing and Adjusting Your Portfolio
Balanced Advantage and Multi Asset Funds
Balanced Advantage and Multi Asset funds offer stability with growth potential.

They balance equity and debt exposure, reducing risk.

Flexicap Fund
Flexicap funds provide flexibility to invest across market capitalizations.

This diversification enhances growth potential.

Midcap and Small Cap Funds
Midcap and Small Cap funds are high-risk, high-reward investments.

They are suitable for long-term wealth creation but require regular monitoring.

SIP Amounts and Fund Allocation
Consider increasing SIP amounts annually with salary increments.

Review fund performance annually and adjust investments accordingly.

Focus on funds with consistent performance and strong management.

Direct Funds vs. Regular Funds
Disadvantages of Direct Funds
Direct funds require regular monitoring and deeper market knowledge.

You may miss out on professional advice and guidance.

Benefits of Regular Funds through MFD with CFP Credential
Investing through an MFD with CFP credential offers professional management.

They provide insights and adjustments based on market conditions.

This ensures better alignment with your financial goals.

Steps to Enhance Your Portfolio
Increase SIP Contributions
With salary hikes, increase SIP contributions proportionally.

This accelerates your corpus accumulation.

Monitor and Review
Regularly review your portfolio performance.

Adjust investments based on fund performance and market conditions.

Diversify Wisely
Ensure your portfolio remains diversified across different fund categories.

Avoid over-concentration in high-risk funds.

Professional Guidance
Consider consulting a Certified Financial Planner (CFP).

A CFP can provide tailored advice and strategies for your goals.

Creating a Financial Roadmap
Set Clear Milestones
Break down your Rs. 1 crore goal into smaller, achievable milestones.

Celebrate progress at each milestone to stay motivated.

Emergency Fund
Maintain an emergency fund to cover unexpected expenses.

This ensures your investments remain untouched during emergencies.

Insurance Coverage
Ensure adequate health and life insurance coverage.

This protects your financial plan from unforeseen events.

Tax Planning
Invest in tax-saving instruments to optimize your returns.

Ensure your investment strategy is tax-efficient.

Continuous Learning
Stay informed about market trends and investment strategies.

This knowledge helps you make informed decisions.

Conclusion
Your dedication to systematic investing is impressive.

By increasing your SIP contributions, monitoring performance, and seeking professional guidance, you can achieve your Rs. 1 crore goal.

Stay disciplined and focused on your long-term vision.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Ramalingam

Ramalingam Kalirajan  |8191 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 05, 2025

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Hi sir thnku in advance. I am 28M,working in central govt job. It has just been one year and I plan on retiring very early around a 35 years of age. I have nps tier 1 account due to the job. I just have one query since I don't plan on marrying and I am alone with my own home. My expenses are max 18k per month. I hardly travel and live a very frugal life. So my query if I resign at 35 years then will 50 lakhs will sustain me for 15 years keeping in mind the inflation and my return as 7% on an average.
Ans: Your question shows rare clarity at a young age. You are just 28. But you already have a defined vision to retire by 35. That is highly appreciable. Many at this age are still unsure of financial direction.

Let us now assess your question in detail.

You asked whether Rs 50 lakhs will last 15 years, post retirement at 35.

Let us evaluate your financial journey from all angles.

Understanding Your Present Situation

You work in a central government job. That offers job security. And also an NPS Tier 1 account.

You live frugally. Your monthly expense is only Rs 18,000. That is extremely disciplined.

You have your own home. So no rent or EMI outgo. This reduces your future cost burden.

You do not plan to marry. So your financial responsibilities are only for yourself.

You plan to retire at 35. That means only 7 more years of active income.

After 35, you want Rs 50 lakhs corpus to sustain you for 15 years.

That means till age 50, you want to live from this corpus.

Now let us move step-by-step to assess sustainability.

Assessing Expense Inflation Over Time

Right now, your expense is Rs 18,000 per month.

Even a frugal person cannot avoid inflation.

Prices of food, electricity, health, etc. will go up.

Inflation over 15 years cannot be ignored.

Even if inflation is modest, say 6%, your expense will rise gradually.

By year 10 or 15, your Rs 18,000 monthly expense may double.

That will need a higher withdrawal from your corpus.

So corpus sustainability depends on how inflation is planned for.

Evaluating Return Assumption

You assume 7% average return on corpus.

This is realistic if money is well invested.

You must avoid only FDs or savings accounts.

To get 7% post-tax, proper asset allocation is needed.

Mutual funds can help here.

Especially, actively managed funds with a Certified Financial Planner.

Avoid index funds. They just copy the index.

Index funds do not give downside protection in bear markets.

They also underperform during volatile sideways markets.

Index funds have no fund manager taking active decisions.

Whereas actively managed funds adapt to market cycles.

A qualified CFP can help select suitable active funds.

Regular plans through a CFP give ongoing guidance.

Direct funds may look cheaper, but lack this support.

Direct funds are like self-medication. Risky without expert view.

Regular plans have a small fee, but offer long-term peace.

Corpus Withdrawal Planning

Your Rs 50 lakh must support monthly cash flow.

Even if you start withdrawing Rs 18,000 monthly, over time it will increase.

You need a withdrawal strategy.

You can follow a staggered withdrawal.

That means only taking what is needed each year.

Rest of the money keeps earning.

It also helps reduce tax burden.

But you must track how much you withdraw each year.

And ensure it grows in line with inflation.

If not planned well, corpus may finish earlier.

So withdrawal plan should be dynamic, not fixed.

A Certified Financial Planner can help prepare such a roadmap.

Emergency and Health Preparedness

You are alone. That means no support system in emergencies.

You must keep some contingency fund aside.

At least 12 months of expenses, i.e., about Rs 2.5 lakhs.

This should be liquid. Like in sweep-in FDs or ultra-short debt funds.

Also, ensure you have a strong health insurance policy.

Healthcare cost rises faster than inflation.

Even a single surgery or hospitalisation can dent your corpus.

Do not rely on employer health cover post resignation.

Buy your own health insurance before retirement.

Choose Rs 20–30 lakh cover. Preferably with a super top-up.

Keep paying its premium from a separate health corpus if needed.

If you stay healthy and insurance unused, that is a blessing.

But if not, it will safeguard your financial independence.

Psychological Readiness for Early Retirement

Financial numbers are only part of the journey.

Are you ready for non-financial changes post-retirement?

How will you keep yourself engaged from age 35 to 50?

No daily job, no team, no deadlines. That may feel strange.

Mental health and social belonging are also essential.

Plan for what you will do post retirement.

Hobbies, part-time work, teaching, or creative work.

Something that gives meaning to your day.

Else early retirement may feel empty after some years.

Personal fulfilment is important, not just financial planning.

Tax Implication of Your Investments

Returns from equity mutual funds have a new rule.

Long-term capital gain (LTCG) above Rs 1.25 lakh taxed at 12.5%.

Short-term gains (STCG) are taxed at 20%.

This affects how you redeem funds.

Withdraw strategically to reduce tax.

Do not withdraw large amounts in one go unless needed.

Spread withdrawals over financial years.

Plan investments so equity and debt are balanced.

This helps with tax and market stability.

NPS Tier 1 – How It Helps

You already have NPS Tier 1 account.

You can continue it even after quitting job.

But withdrawals are restricted before age 60.

You can withdraw only 20% before 60 if not annuitised.

So it may not be useful for your 35–50 needs.

But it can be your backup after 60.

So continue it. Don’t touch now.

Let it grow. It adds to your retirement safety.

It cannot be your main retirement plan for early years.

How You Should Build Rs 50 Lakh Corpus

You have 7 years left to save.

That is a short horizon for such a big goal.

You must save aggressively now.

Keep lifestyle minimal, as you already are doing.

Avoid unnecessary gadgets, dining, or gadgets.

Every rupee saved now compounds for your future.

Invest in a well-planned mutual fund portfolio.

Include large cap, mid cap, and flexi cap funds.

Avoid thematic or sectoral funds. Too risky for main corpus.

Also add short-duration debt funds for stability.

Review this plan once a year with your CFP.

Increase SIPs with each salary hike.

Also allocate your yearly bonus fully into investments.

Rs 50 lakh target is tough but possible with discipline.

Asset Allocation Approach

Corpus should not be 100% in equity or 100% in debt.

A balanced approach is better.

Early years of retirement can bear some equity.

Later years should gradually shift to debt.

This is called glide path strategy.

Helps avoid sequence of returns risk.

If market crashes in year 1 or 2, your corpus shrinks fast.

So first 3 years’ expenses should be in debt.

Remaining in equity-debt mix as per risk profile.

Rebalancing is important each year.

Do not ignore this step.

It controls risk and improves return consistency.

Finally

Rs 50 lakhs can last for 15 years if:

You invest it wisely.

Withdraw in a disciplined way.

Factor in inflation, taxes, and health cost.

Keep emergency corpus aside.

Stay insured for health and critical illness.

Engage yourself meaningfully post-retirement.

Review your plan annually with a Certified Financial Planner.

Early retirement is not a one-time plan.

It is a living strategy that needs updates.

You are on the right path.

Stay focused. Stay simple.

And always seek guidance when needed.

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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