Hi... I am 48 years of age. Currently in hand salary income is 140000. My total monthly savings is 56000. ie post office RD 25k which is going to mature in Jan 2025, bank RD 30k which is going to mature in Dec 2024, sip in MF 6k (started 6 months back).
My total expenses is bank EMI 24k per month, other monthly expenses including children's tuition fee 55k.
My investment - 2 flats worth rs. 75k, ppf 2L, insurance 10L, Equity 40k
Other income - flat rent 8k monthly.
Request for proper planning for investment next 12 yrs to achieve 2cr goal.
Regards.. RHP
Ans: Current Financial Overview
You are 48 years old with an in-hand salary of Rs. 1,40,000 per month. Your savings and investments are as follows:
Monthly Savings: Rs. 56,000
Post Office RD: Rs. 25,000 (maturing Jan 2025)
Bank RD: Rs. 30,000 (maturing Dec 2024)
SIP in Mutual Funds: Rs. 6,000 (started 6 months back)
Your expenses include:
Bank EMI: Rs. 24,000 per month
Other Monthly Expenses: Rs. 55,000 (including children's tuition fees)
Your current investments are:
Two Flats: Worth Rs. 75 lakhs
PPF: Rs. 2 lakhs
Insurance: Rs. 10 lakhs
Equity: Rs. 40,000
You also have a rental income of Rs. 8,000 per month from one of your flats.
You aim to achieve a goal of Rs. 2 crores in the next 12 years.
Assessment of Current Investments
You have a mix of real estate, recurring deposits, insurance, and a small amount in mutual funds and equity. While real estate and RDs are safe, they may not provide the high growth needed to achieve your goal. Diversifying into other investment options is crucial.
Diversification Strategy
Mutual Funds for Growth
Increase your SIP contributions in mutual funds. Diversify across large cap, mid cap, and multi cap funds for balanced growth.
Actively managed funds can provide better returns than direct or index funds. They offer professional management and diversification.
Public Provident Fund (PPF)
Continue investing in PPF for tax-free returns. It provides long-term stability and security.
National Pension System (NPS)
Consider increasing your contributions to the NPS. It offers tax benefits and a regular pension post-retirement.
Equity Investments
Gradually increase your equity investments. Equities can provide high returns over the long term, helping you achieve your financial goals.
Debt Funds
Invest in debt funds for stability and regular income. They are less volatile than equities and provide a steady return.
Optimizing Current Savings
Post Office RD and Bank RD Maturity
Once your RDs mature, reinvest the amount in a mix of mutual funds and debt funds. This will provide higher returns and diversification.
Reviewing Real Estate Investments
While real estate can be a good investment, consider its liquidity and return potential. Diversify into more liquid and high-growth options like mutual funds and equities.
Planning for Children's Education
Education Fund
Start a separate education fund for your children. Invest in mutual funds and PPF to accumulate the required corpus.
Insurance and Risk Management
Adequate Insurance
Ensure you have adequate life and health insurance. This protects your family and investments.
Steps to Achieve Your Goal
Increase Monthly SIPs
After your RDs mature, redirect those amounts to mutual funds. Increase your SIP contributions to Rs. 30,000-40,000 per month.
Rebalance Portfolio
Regularly review and rebalance your portfolio with a Certified Financial Planner. This ensures alignment with your financial goals and market conditions.
Emergency Fund
Maintain an emergency fund of 6-12 months of expenses. This provides a safety net for unexpected situations.
Final Insights
Your current investments are a good start, but diversification is key. Increase your SIP contributions, invest in PPF and NPS, and consider more equity and debt funds. Regularly review your portfolio with a Certified Financial Planner. This balanced approach will help you achieve your goal of Rs. 2 crores in 12 years.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner,
www.holisticinvestment.in