Hi Sir. I'm 29 years old. My wife and I both are Government employees. Our combined income is 120000 per month.

I've SIP in following MFs:

Axis Bluechip DG: 5000

Axis Midcap: 3000

Axis small cap: 2000

SBI small cap: 2000

Mirae Asset Tax saver ELSS: 3000

MF portfolio: Approximately 6 lakh

Equity Stock Portfolio: 7 lakh

Kindly guide me whether my selection and allocation of MFs is good or not. Can I get 15% annualised return if stay invested for long term e.g 15 to 20 years? How much should I increase SIP amount annually? Thanks.

Ans: Hello;

What is the current age of your mother and father?

Based on your reply I may be able to guide you suitably.

Best wishes;

Ans: Hello;

What is your current age and income?

Do you have any investments?

Are you eligible for statutory pension?

Kindly provide answers to these queries so that we can respond to you appropriately.

Best wishes;

Ans: Hello;

Abundant resources are available online which would serve as a starting point for your research work.

The mandate of this platform prohibits us to elaborate on matters other then investor queries.

Thank you for your kind understanding and best wishes for your project;

Ans: Hello;

For retired person, it would be better to opt for FDs of big government banks/time deposits of Post Deptt instead of debt mutual funds.

Happy Investing;

Ans: Hello;

This is exactly the reason why we advocate investing through mutual funds and leave the headache of managing market volatility to the fund manager.

Most seasoned investors get damn scared of sudden black swan events and the massive erosion in wealth, albeit notional, takes a toll on their health which is worse the notional money loss.

Being disciplined, systematic and objective in your investments pays you highly.

Tactical asset allocation should be utilised only by skilled and experienced investors because most common people and even some experts find it difficult to predict future market movements.

If your horizon is long term then no need to get bogged down.

Alternatively start systematic investments in mutual funds through regular SIPs.

Happy Investing;

Ans: Hello;

Considering your age it would be better to opt for FDs of big government banks/time deposits of Post Deptt.

Happy Investing;

Ans: Hello;

You may invest your corpus in NSC and expect it to grow into a sum of 24.63 L after 5 years, at current interest rate of 7.7%.

Happy Investing;

Ans: Hello;

Honestly I do not think this company has any bright future.

My advice would be to avoid such junk stocks.

Best wishes;

Ans: At 63 years old, it's great to see you actively considering your financial future. You currently have Rs 70 lakh in fixed deposits, which provides a safety net. Your monthly income of Rs 3.80 lakh is a strong position. Let's explore how you can best use your resources.

Understanding Fixed Deposits
Safety and Returns
Fixed deposits are safe and provide guaranteed returns. However, they may not keep pace with inflation over the long term.

Liquidity Concerns
While FDs are liquid, withdrawing funds can incur penalties. This may affect your overall returns.

Tax Implications
Interest earned from FDs is taxed as per your income slab. This can reduce your effective income.

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In summary, FDs provide stability but have limitations in returns and tax efficiency.

Monthly Income and Budgeting
Assessing Monthly Income
Your monthly income of Rs 3.80 lakh gives you significant flexibility. This can be allocated towards various needs, including housing, savings, and expenses.

Creating a Budget
Start by listing your monthly expenses. Ensure you allocate funds for necessities, leisure, and future savings. This will help you understand your disposable income.

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A clear budget will help you manage your finances better and achieve your goals.

Considering Home Purchase
Evaluating the Need for a Home
Buying a home can be a significant decision. Consider your current living situation and future plans.

Affordability Assessment
With Rs 70 lakh in FDs and a monthly income of Rs 3.80 lakh, you can afford a comfortable home. Assess how much you want to spend on a house.

Impact on Savings
Purchasing a house may reduce your liquidity. Ensure you maintain enough savings for emergencies and unexpected expenses.

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It’s essential to balance the desire for home ownership with your overall financial security.

Investment Options Beyond Fixed Deposits
Exploring Other Investments
While FDs are safe, consider diversifying your investments. This can enhance your returns and reduce risks.

Investing in Mutual Funds
Actively managed mutual funds can offer better returns than FDs over time. They provide professional management and diversification, which can be beneficial.

Tax Efficiency of Mutual Funds
Long-term capital gains from equity mutual funds are taxed at a lower rate. This can be advantageous compared to FD interest.

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Investing in mutual funds may enhance your portfolio's growth potential.

Evaluating Debt and Equity Balance
Understanding Risk Tolerance
Assess your risk tolerance. As a retiree, you may prefer safer investments. However, some exposure to equity can provide growth.

Creating a Balanced Portfolio
Consider a mix of debt and equity investments. This approach can help balance safety and returns.

Regular Monitoring and Adjustments
Monitor your investments periodically. Adjust your portfolio based on market conditions and your changing needs.

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A balanced portfolio is crucial for financial health in retirement.

Tax Implications on Investments
Taxation of Fixed Deposits
Interest from FDs is taxed as per your income slab. This can reduce your effective returns.

Mutual Fund Taxation
For equity mutual funds, long-term capital gains above Rs 1.25 lakh are taxed at 12.5%. Short-term gains are taxed at 20%. This tax structure can be more favorable than FD interest taxation.

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Understanding tax implications can help you make informed investment decisions.

Planning for Future Expenses
Anticipating Healthcare Costs
As you age, healthcare costs may increase. Ensure you allocate funds for medical expenses. This is crucial for maintaining your health and lifestyle.

Emergency Fund
Maintain a separate emergency fund. This should cover 6-12 months of expenses. It provides a safety net in case of unexpected situations.

Retirement Lifestyle Considerations
Think about your lifestyle in retirement. Allocate funds for hobbies, travel, and family. Ensuring a comfortable lifestyle is essential for your well-being.

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Planning for future expenses can enhance your retirement experience.

Final Insights
Considering your strong monthly income and existing assets, you are in a good position to explore options.

Evaluate the necessity of purchasing a house against your liquidity needs.

Diversify investments beyond FDs for better returns.

Create a balanced portfolio of debt and equity.

Pay attention to tax implications to enhance your income.

Ensure you have adequate provisions for healthcare and emergencies.

Working with a Certified Financial Planner can further help you clarify your goals and manage your investments. This can ensure you are well-prepared for your retirement years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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