Hi, I'm 28 year's old and my monthly income is 35,000. After all the expenses I save around 15k per month since last month. Now, I want to start investing for a better financial freedom in my future but I don't know where to start from. May I have any advice/guidance? Thanking you in advance!

Ans: You may start with Axis ESG Equity Fund - Growth.

 

Ans: Starting your mutual fund investment journey at 38 is a great decision for long-term wealth accumulation. Here's a suggested approach for your monthly investment of 15k:

Diversified Equity Funds: Allocate a significant portion to diversified equity funds, which invest across market caps and sectors. These funds offer growth potential and help spread risk. Consider allocating around 60-70% of your investment here.

Large Cap Funds: Large-cap funds invest in established companies with stable performance. They provide stability to your portfolio. Allocate around 20-30% of your investment here.

Mid and Small Cap Funds: These funds have higher growth potential but come with higher risk. Allocate a smaller portion, say 10-20%, to mid and small-cap funds for potential higher returns.

Systematic Investment Plan (SIP): Consider investing through SIPs to benefit from rupee-cost averaging and discipline your investment approach.

Review and Adjust: Regularly review your portfolio's performance and adjust allocations based on changes in your financial goals, risk appetite, and market conditions.

Given your investment horizon of 20 years, you can afford to take moderate to high risks. However, it's essential to choose funds wisely and diversify your investments to mitigate risk. Consider consulting with a financial advisor for personalized recommendations tailored to your financial goals and risk tolerance.

Ans: It is never too late to start investing and take better care of your money!

1) For fulfilling your daughter's education goal after 12 years, you require to invest 65,000 monthly approx. (SIP) to accumulate a corpus of Rs. 2 Crore after about 12 years.
2) To accumulate retirement corpus of Rs. 10 crore at the age of 54 you need to invest 1,02,000 approx. monthly for next 20 year.
(we have assumed the growth rate at 12% for long term investment horizon)

Moreover, you wish to invest 2 lakhs per month. The balance amount can go for you other long-term goals (as mentioned by you) and wealth accumulation.

For a long-term investment horizon, consider equity mutual funds, which historically have shown potential for higher returns over the long term. Diversified equity funds or equity index funds could be suitable for a balanced approach. Popular choices include large-cap, mid-cap, flexi cap funds or small cap funds.

Ans: Starting to save and invest at 36 is a commendable decision, and with a monthly savings of 30,000, you have a great opportunity to build a solid financial foundation for your future. Here's a suggested approach to get started:

Emergency Fund: Begin by setting aside some of your savings into an emergency fund. Aim to accumulate at least 3 to 6 months' worth of living expenses in a liquid and easily accessible account. This fund will provide you with a financial safety net in case of unexpected expenses or emergencies.
Debt Management: Since you don't have any loans, focus on avoiding debt and maintaining a healthy credit score. If you do have any high-interest debt, such as credit card debt, prioritize paying it off as soon as possible to avoid unnecessary interest payments.
Investment Allocation: Determine your investment goals, risk tolerance, and investment horizon. Since you're starting relatively late, consider a balanced approach to investing with a mix of equity and debt investments. Given your age, you may have a longer investment horizon, allowing you to take on more risk for potentially higher returns.
Systematic Investment Plans (SIPs): Consider investing in mutual funds through SIPs. Mutual funds offer diversification and professional management, making them suitable for beginners. Allocate your investments across different categories such as large-cap, mid-cap, and multi-cap funds to spread risk and maximize potential returns.
Retirement Planning: Start planning for your retirement by investing in retirement-oriented funds like Employee Provident Fund (EPF), Public Provident Fund (PPF), or Voluntary Provident Fund (VPF). Additionally, consider investing in Equity Linked Savings Schemes (ELSS) for tax-saving benefits while building a retirement corpus.
Continuous Learning: Take the time to educate yourself about personal finance and investment strategies. Attend workshops, read books, and follow reputable financial websites to enhance your knowledge and make informed investment decisions.
Regular Review and Adjustment: Regularly review your investment portfolio to ensure it remains aligned with your goals and risk tolerance. As your financial situation and goals evolve, make necessary adjustments to your investment strategy accordingly.
By following these steps and staying disciplined in your savings and investment approach, you can gradually build wealth and work towards achieving your financial goals. Remember, consistency and patience are key to long-term success in investing.

Ans: Starting your investment journey at 36 is a responsible and positive step towards securing your financial future. Here’s a structured approach to help you get started, considering your current situation and future goals.

Assess Your Financial Situation
Before investing, it’s crucial to understand your current financial standing. Calculate your monthly income, expenses, and any existing debts. This will give you a clear picture of how much you can invest monthly.

Setting Financial Goals
Set clear, achievable financial goals. These might include:

Emergency Fund: Cover 6-12 months of expenses.
Child’s Education: Plan for your 3-year-old’s future education costs.
Retirement: Secure your financial independence post-retirement.
Other Goals: House purchase, vacations, etc.
Building an Emergency Fund
Before starting any investment, create an emergency fund. This fund should cover at least 6 months of living expenses. It acts as a financial buffer against unexpected events like medical emergencies or job loss.

Life and Health Insurance
Ensure you have adequate life and health insurance. These insurances protect your family financially in case of any unforeseen events. A term insurance plan is advisable for life cover, and a family floater health insurance plan for medical emergencies.

Starting with Systematic Investment Plan (SIP)
SIPs are a disciplined way to invest in mutual funds. They allow you to invest a fixed amount regularly, helping you average out the cost of purchasing mutual fund units over time.

Suggested SIP Allocation
Given your goals and starting point, here’s a suggested allocation:

Equity Mutual Funds:

Suitable for long-term goals like retirement and child’s education.
Allocate about 70% of your investment here for higher returns.
Debt Mutual Funds:

Suitable for short-term goals and stability.
Allocate about 20% to balance risk.
Hybrid/Balanced Funds:

A mix of equity and debt.
Allocate about 10% for moderate risk and returns.
Suggested Fund Allocation
Large-Cap Fund: Focus on stability and consistent returns.

Monthly SIP: 3,000 rupees
Mid-Cap and Flexi-Cap Funds: Offer higher growth potential.

Monthly SIP: 4,000 rupees
Debt Funds: Provide stability and lower risk.

Monthly SIP: 2,000 rupees
Balanced/Hybrid Funds: Mix of equity and debt.

Monthly SIP: 1,000 rupees
Steps to Start Investing
Open an Investment Account:

Choose a reputable mutual fund provider or an online investment platform.
Start with SIPs:

Set up SIPs in the recommended funds.
Automate monthly investments to ensure consistency.
Monitor and Review:

Regularly review your portfolio’s performance.
Make adjustments based on your financial goals and market conditions.
Importance of Professional Guidance
Consider consulting a Certified Financial Planner (CFP). A CFP can provide personalized advice tailored to your financial situation and goals. They can help you choose the right funds, ensure your investments align with your goals, and make necessary adjustments.

Avoiding Common Pitfalls
Avoid High-Risk Investments: Don’t invest in high-risk assets without understanding them.
Stay Disciplined: Stick to your investment plan and avoid impulsive decisions.
Don’t Overlook Insurance: Ensure you have adequate life and health insurance.
Conclusion
Starting investments at 36 is a wise decision for securing your family’s future. By building an emergency fund, getting proper insurance, and investing systematically through SIPs, you can achieve your financial goals. Regular reviews and professional guidance will keep you on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in