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Investing in Your 20s: Where to Invest 1 Lakh Monthly for Growth?

Milind

Milind Vadjikar  |277 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 02, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Asked by Anonymous - Oct 01, 2024Hindi
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I am in my late 20s and want to invest 1 lakh per month. Can you guide me where to invest it? I am looking at diversifying the investment in different asset classes such as equity mutual fund, debt etc. Also, should I invest on international equity mutual funds?

Ans: Hello;

I hope you have adequate term life insurance and healthcare insurance to begin with as protection.

I recommend the following allocation for your investible funds for regular monthly contributions(1 L per month):

1. flexicap type fund(PPFAS flexicap fund G): This fund also has exposure to international equity over and above investments in Indian stocks: 25%

2. Large cap type mutual fund(Kotak bluechip fund G): 10%

3. Large and Midcap type Fund (Mirae Asset Large and Midcap fund G): 25%

4. Small cap type fund(Nippon India Small cap fund): 10%

5. PPF: 12.5% (To be considered as investment in Debt asset class).

6. Multi asset allocation type fund(ICICI Pru Multi asset allocation fund G): 17.5%
This fund has allocation to gold, debt and equity and alters allocation to each asset class based on market dynamics.

PPF is a GOI social security scheme with 15 year tenure and partial withdrawal allowable after 6th year. It's an E-E-E type of scheme.

The funds are recommended for 10+ year horizon however yearly review and changes if required should be done.

Happy Investing!!

You may follow us on X at @mars_invest for updates.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.
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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Asked by Anonymous - Jan 25, 2024Hindi
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Hello Sir I am 22 year old and I can invest around Rs3000 per month with better job opportunity and time period I can increase my investment amount, I want to know where I can invest my savings every month for better returns, I can invest for next 30-35 years regularly for sure. Kindly guide me where and how to invest .
Ans: That's a fantastic start! Thinking about long-term investments at your age is a smart decision. Here are some options for where you can invest your Rs.3000 per month, considering a 30-35 year investment horizon:

Systematic Investment Plan (SIP) in Mutual Funds:

This is a popular option for regular investment with rupee-cost averaging. You invest a fixed amount each month, and the units are purchased based on the prevailing Net Asset Value (NAV).
Benefits:
Disciplined Investing: Encourages regular savings and avoids the need to time the market.
Rupee-Cost Averaging: Purchases more units when the NAV is low and fewer units when it's high, potentially balancing the overall cost per unit.
Long-Term Growth: Equity mutual funds have the potential for significant growth over the long term (typically 10+ years).
Investment Options:
Large-cap Funds: Invest in stocks of well-established companies with a proven track record.
Multi-cap Funds: Invest across companies of different market capitalizations (large, mid, and small).
Consider a mix of these based on your risk tolerance.
Here's how to get started with SIP in Mutual Funds:

Choose a SEBI-registered Mutual Fund Company (AMC): Research and compare different AMCs based on their performance and fund offerings.
Select a Suitable Mutual Fund Scheme: Consider your risk tolerance and investment goals.
Open an Investment Account: You can open an account with the AMC directly or through a broker/distributor.
Start your SIP: Set up a recurring transfer of Rs.3000 per month to your chosen SIP.
Additional Tips:

Increase Investment as Income Grows: As your income increases, consider raising your SIP amount to reach your financial goals faster.
Stay Invested for Long Term: Market fluctuations are normal. Don't panic and redeem your investments during downturns. A long-term horizon allows time for the market to recover and potentially generate good returns.
Review and Rebalance: Periodically review your portfolio performance (at least annually) and rebalance if needed to maintain your desired asset allocation.
Other Options to Consider:

Public Provident Fund (PPF): A government-backed scheme offering guaranteed returns and tax benefits. However, PPF has lower liquidity compared to mutual funds.
Employee Provident Fund (EPF): If you're salaried, your employer likely contributes to your EPF. This offers good long-term returns and tax benefits.
Remember:

I can't provide specific financial advice. Consulting a Certified Financial Planner (CFP) can be helpful, especially for a personalized investment plan considering your risk tolerance and goals.
Start with your research! Read about different investment options, mutual funds, and SIPs before making any decisions.
By starting early, investing regularly, and staying disciplined, you can build a significant corpus for your future over the next 30-35 years.

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Ramalingam

Ramalingam Kalirajan  |6467 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 07, 2024

Asked by Anonymous - May 02, 2024Hindi
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Hi, I'm 35 yrs I can invest 25000-50000 per month, where should i invest. I can take moderate risk, 10yrs time horizon, I invested 10lakhs in direct shares already. Investing in Mirae ELSS monthly 4000rupees Not invested in any other mutual funds. I earn monthly 1 lakh, no emi, i can save 80k per month, let me know where i can invest 25-50k monthly
Ans: It's great to see your proactive approach to investing and your willingness to explore additional investment avenues. Given your risk tolerance, time horizon, and monthly saving capacity, mutual funds can be an excellent option to diversify your portfolio and potentially enhance returns over the long term. Here's a suggested approach for your monthly investments of 25,000 to 50,000 rupees:

Increase SIP Investment:
Since you're already investing in Mirae ELSS with a monthly SIP of 4,000 rupees, consider increasing your SIP amount in this fund or adding SIPs in other mutual funds.
Diversify Across Fund Categories:
Allocate your monthly investment across different categories of mutual funds to diversify your portfolio and manage risk effectively.
Consider investing in large-cap, mid-cap, and multi-cap funds to gain exposure to different segments of the market.
Consider Systematic Investment Plans (SIPs):
SIPs offer the advantage of rupee cost averaging and disciplined investing, making them suitable for long-term wealth creation.
You can start SIPs with varying amounts in different funds based on your risk appetite and investment objectives.
Fund Selection:
Choose mutual funds with a proven track record of consistent performance, experienced fund managers, and a robust investment process.
Look for funds with low expense ratios and high-quality portfolios that align with your investment goals and risk profile.
Regular Monitoring and Review:
Keep a close eye on the performance of your mutual fund investments and regularly review your portfolio to ensure it remains aligned with your financial objectives.
Make adjustments to your investment strategy as needed based on changes in market conditions, your risk tolerance, and investment goals.
Seek Professional Advice:
Consider consulting with a financial advisor or Certified Financial Planner to develop a customized investment plan tailored to your specific needs and goals.
A professional can provide valuable insights and guidance to help you make informed investment decisions and navigate the complexities of the financial markets.
By diversifying your investments across mutual funds and adopting a disciplined approach to investing, you can potentially achieve your financial goals and build wealth over the long term. Remember to stay patient, stay focused on your long-term objectives, and avoid making impulsive investment decisions.

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Ramalingam

Ramalingam Kalirajan  |6467 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

Asked by Anonymous - May 14, 2024Hindi
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Hello My Age is 23 and currently earning a income of 40000 per month where should I invest pls describe the amount of investment allotment also in different sectors like MF, INSURANCE, ETC. I would like to invest monthly around 20000.
Ans: Congratulations on taking the initiative to invest at a young age! Let's explore a diversified investment strategy tailored to your financial situation and goals.

Assessing Investment Allocation
Mutual Funds (MF):

Allocate a significant portion of your monthly investment towards mutual funds, considering their potential for long-term growth and diversification benefits.
Aim to invest around 60-70% of your monthly investment amount in mutual funds across various categories such as large-cap, mid-cap, and multi-cap funds.
Insurance:

While insurance is essential for financial protection, allocate a smaller portion of your investment towards insurance premiums.
Consider investing around 10-20% of your monthly investment amount in insurance policies such as term insurance for adequate coverage.
Emergency Fund:

Build an emergency fund equivalent to 3-6 months of living expenses to cover unexpected financial needs.
Allocate a portion of your monthly investment towards gradually building your emergency fund until it reaches the desired level.
Other Investments:

Explore other investment avenues such as fixed deposits, recurring deposits, or Public Provident Fund (PPF) for stable returns and tax benefits.
Allocate a small portion of your monthly investment, around 10-20%, towards these conservative investment options to ensure a balanced portfolio.
Advantages of Actively Managed Funds Over Index Funds
Actively managed mutual funds offer the expertise of professional fund managers who actively select and manage the fund's investments to outperform the market.
These funds have the flexibility to adapt to changing market conditions and capitalize on investment opportunities, potentially yielding higher returns.
Unlike index funds, which passively track a market index, actively managed funds can generate alpha through active portfolio management and security selection.
Considerations for Direct Fund Investment
While direct funds offer lower expense ratios compared to regular funds, they require active involvement in research, monitoring, and portfolio management.
Direct fund investors must possess the necessary knowledge and expertise to select suitable funds and manage their investment portfolio effectively.
Investing through a Certified Financial Planner (CFP) or Mutual Fund Distributor (MFD) provides access to professional guidance and personalized investment advice, enhancing the overall investment experience.
Conclusion
By following a disciplined investment approach and diversifying across various asset classes, you can build a robust investment portfolio that aligns with your financial goals and risk tolerance. Remember to review your investments periodically and make adjustments as needed to stay on track towards achieving your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Hello, I am in a relationship and have been trying to convince my parents for the past two years. We belong to different castes, and our families live far apart, which makes it difficult for us to meet in person. I am a 29-year-old woman, and my parents have finally been convinced. However, the issue is now with the boy's family. They are delaying making a firm decision. This is the second time they haven’t confirmed whether they are ready. The boy's father is elderly and unwell, but I can't tell this to my parents, as they might think his family is using it as another excuse to delay. The boy is under a lot of stress because his family blames him for his father's illness. Meanwhile, my parents are losing interest, as this is the second time they’ve been convinced, only for the boy’s family to delay. Both families have met twice, but there has never been a discussion about how to proceed with the marriage. We have a mediator known to both families, but since the boy’s parents haven’t given a clear answer, the mediator got frustrated and said something to my parents, making them suspicious. Now, the mediator wants to clear things up, but the situation on the boy's side is so sensitive that he cannot talk to his parents directly. The delays are making my parents even more frustrated. I do not want to leave him. My parents believe that because this is the second time things have fallen through, it's a bad omen. While the boy's mother and brother have no issues with the marriage, his father is still not fully convinced, and they are not taking any initiative. I’m unsure what to do. My parents are pressuring me to leave him and make a final decision. It's been 10 days since this situation escalated, and I keep fighting with them. They believe there’s no solution to this problem, but I am not ready to leave him, and neither is he. For my parents, two years feels like a long time to wait, and they think it’s time to move on.
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Your parents seem to be right from their point of view. Two years is a lot of wait time. I think you need to step in and bring in this perspective to your boyfriend that you cannot wait forever. It's time that he took charge and understands that by postponing, the problem does not go away!
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Asked by Anonymous - Oct 01, 2024Hindi
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Hi. I'm 45 years and lately I've been investing in MF myself through app. I do lumpsum as I prefer to avoid monthly payments. But as I don't have much knowledge now a days I'm getting quite concerned on the risks involved as most are high risk funds. Taking our market growth, are there chances to lose my principal amount. I can hold these funds for 5-10 years as my kids are small. Please find my portfolio below. If I need to switch, please advice to which fund. Also is it unwise investing into many funds ? Aditya Birla Sun Life PSU Equity Growth Direct Plan - Rs 151200 Bank Of India Flexi Cap Growth Direct Plan Rs 50000 Canara Robeco Small Cap Growth Direct Plan Rs 347240 Franklin India Smaller Companies Growth Direct Plan Rs 102000 HDFC Focused 30 Growth Direct Plan Rs 181550 HDFC Infrastructure Growth Direct Plan Rs 120000 HDFC Mid Cap Opportunities Growth Direct Plan Rs 50000 Invesco India Infrastructure Growth Direct Plan Rs100000 Invesco India PSU Equity Growth Direct Plan Rs 30650 Motilal Oswal Midcap Growth Direct Plan Rs 210000 Nippon India Power & Infra Growth Direct Plan Rs 52550 Nippon India Small Cap Growth Direct Plan - Rs 201868 Quant Flexi Cap Growth Direct Plan Rs 57780 Quant Infrastructure Growth Direct Plan Rs 191500 SBI Consumption Opportunities Growth Direct Plan Rs 198873 SBI Contra Growth Direct Plan Rs 415100 SBI Equity Hybrid Regular Growth Plan Rs 1080700 SBI Focused Equity Growth Direct Plan - Rs 1625400 SBI Large & Midcap Growth Direct Plan Rs 548850 SBI Magnum Global Growth Direct Plan Rs 454000 SBI Magnum Midcap Growth Direct Plan Rs 166350 SBI PSU Growth Direct Plan Rs 111650
Ans: Hello;

You have a corpus of around 64.5 L spread over 22 mutual fund schemes.

My investment precept is if your investible scheme count is going beyond single digit then you are spreading it too thin.

Investing has to be done objectively only based on concrete criteria with no scope for any familiarity or recency bias.

High allocation to thematic/sectoral funds is a huge risk.

I recommend you to change your portfolio allocation as follows:

1. Flexicap cap fund: 25%
(PPFAS flexicap fund)
2. Large and Midcap type Fund: 25%
(SBI Large and Midcap fund)
3. Small cap type fund: 10%
(Nippon small cap fund)
4. Thematic fund: 10%
(SBI Technology Opportunities Fund)
5. Dynamic asset allocation fund: 15%
(HDFC BAF)
6. Multi asset allocation fund:15%
(ICICI Pru Multi asset allocation fund)

This allocation tries to acquire growth primarily through equity also adding a semblance of stability through moderate exposure to debt and gold.

Funds have been recommended based on long-term returns in their respective category.

Happy Investing!!

You may follow us on X at @mars_invest for updates.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.

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Milind Vadjikar  |277 Answers  |Ask -

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Hello gurus, i am currently pursuing btech cse from medicaps university, indore(1 year) and planning for mtech from abroad so what should be best option iit madras bs course or upgrading skills from udemy and coursera from other top institutes......., Please guide!!
Ans: Hello.
Your goal is palpable. To do an M.Tech. from abroad, you must start building your foundation right now. From the options put by you, prefer BS @ IIT Madras if you trust in the brand name because it is a highly reputed institution, will add value to your profile, and may boost your chances for admission to top foreign universities. The only thing is that it may take a long time to complete the course and your waiting period may extend a little bit. But if you are conscious about the time factor and want more flexibility then you may choose Udemy and Coursera platforms. Both are recognized platforms. Certificates can still enhance your profile, though not as much as a full degree. Coursera and Udemy certificates, while useful, don’t carry the same weight as a degree from an IIT.
Suggestion: IIT Madras' BS course is an excellent choice, especially if you want a well-rounded, recognized qualification.

If you are dissatisfied with the reply, please ask again without hesitation.
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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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