Dear Sir, I m Government employee earning around 1 Lakh Permonth, I have small home around 375 sq ft. My Goverment employer who gives NPS accumulated 15 Lakh and mutual fund portfoilio value is 3.5 lakh . also I have been doing monthly SIPS from past three years started with 6k, gradually increased and wll increase like wise and now just from last month started SIP of Rs 20,000/- PM in Following Fund , Canara Robeco Small Cap = 2000, Motilal Mid cap =6500, Motilal Smal cap -3500, Quant Flexi Cap = 5000, Invesco Flexi Cap- 3000, My Goal is to have home after 6 years around 70 lakhs ( need 35 lakh for down payment in six year) and my long term goal of 15 years is to have 2 cr cash (other than Employer linked NPS). NO LOAN NOW. no debt, age 36. please advice for short term 6 years and long term 15 years 2cr goal with my investment current mutual fund.
Ans: Reviewing Your Current Financial Position
You are 36 and earn about ?1?lakh per month as a government employee.
Your NPS account holds ?15?lakh (employer?linked).
Mutual fund holdings currently stand at ?3.5?lakh.
You started monthly SIPs and have now committed ?20,000 per month across various funds.
You have no debt and aim for a home down?payment and long?term corpus goals.
First, well done on entering disciplined SIPs and having zero liabilities.
Clarifying Your Short?Term Goal (6 Years)
You plan to buy a home in six years, needing ?70?lakh overall.
Down-payment estimate: ?35?lakh in six years.
You already own a small home of 375?sq?ft, so this may be part of an upgrade or new investment.
Your SIPs and NPS earnings should support this goal if aligned strategically.
Understanding Your Long?Term Goal (15 Years)
Your long-term goal is to build a ?2?crore corpus (excluding NPS).
Time horizon aligns well with an aggressive equity stance.
You have fourteen years to compound wealth via SIPs, NPS, and portfolio growth.
Evaluating Your Existing SIP Structure
You are currently investing ?20,000 per month in equity across:
Small-cap: ?2,000
Mid-cap fund: ?6,500
Another small-cap: ?3,500
Flexi-cap (Quant): ?5,000
Another flexi-cap (Invesco): ?3,000
Strength: Growth potential through small and mid segments.
But risk: Highly concentrated in equity, no debt buffer.
You need equity diversification and safer assets for your six-year goal.
Short-Term 6-Year Strategy
Aim: Accumulate ?35?lakh for home down-payment with minimal risk.
Introduce Debt Allocation
Add aggressive hybrid or short-term debt funds.
Suggest monthly SIP of ?10,000 into debt/hybrid funds.
Protect capital against equity shocks in 6 years.
Maintain Balanced Equity Exposure
Reduce small-cap SIPs gradually to total ?5,000.
Maintain ?5,000 in mid-cap, and ?5,000 across flexi-caps.
Equity exposure remains ~50%, balanced for growth and capital protection.
Start a Liquid or Ultra-Short Fund SIP
Add ?5,000 monthly for liquidity and emergencies.
This buffer prevents needing to redeem equity during market lows.
View NPS Strategically
Your employer-linked NPS (~?15?lakh) is equity-heavy by default.
Continue contributions; it acts both as retirement savings and growth asset.
Avoid early withdrawals to retain long-term advantage.
Use Home-Specific SIP Mode
For 6-year goal, designate the debt/hybrid and part of flexi SIP.
This creates a secure bucket for your home fund.
Long-Term 15-Year ?2 Crore Strategy
Aim: Build ?2?crore corpus excluding NPS through balanced equity and hybrid allocation.
Focus on Equity for Growth
Maintain ?5k in mid-cap and ?7k in flexi-cap equity SIPs.
Keep small-cap at ?5k – enough exposure for growth without excessive risk.
Include Hybrid/Multi-Asset Funds
Add ?7k monthly in aggressive hybrid or multi-asset funds.
These funds balance equity-debt automatically and reduce volatility.
Use Debt Funds for Stability
Allocate ?6k to debt or short-term bond funds monthly.
Provides stability and income distribution over the long term.
Maintain Liquid SIPs
Keep ?2k to ?3k in liquid funds for flexibility.
Helpful for periodic rebalancing or unexpected expenses.
Consider Small Gold Exposure
Add ?2k–3k in gold ETF/funds for inflation and equity hedge.
Increases diversification without pushing beyond core allocation.
Suggested SIP Structure (Total ?40,000)
Asset Class SIP Monthly Allocation
Small-cap ?5,000
Mid-cap ?5,000
Flexi-cap Equity ?12,000
Aggressive Hybrid ?7,000
Debt Fund ?6,000
Liquid Fund ?3,000
Gold ETF ?2,000
Total ?40,000
This builds growth equity moat while improving downside buffer and goal-specific buckets.
How to Redeploy Existing Portfolio
Revisit overlapping flexi and small/mid fund overlaps.
Consolidate similar fund mandates into single high-conviction funds.
Redirect existing SIPs to align with the above structure.
Sell overlapping or underperforming schemes and reassign to target allocation over 6 to 12 months.
Lump-Sum Deployment Approach
Suppose you receive a windfall or bonus.
Do not invest large lumps entirely into equity.
Use staggered deployment: monthly or quarterly over a year.
Split 60% into equity, 20% hybrid, 20% debt/liquid for diversified entries.
Keep track of average cost and maintain goal alignment.
Why Actively Managed Funds Are Advantageous
They allow managers to exit risky sectors pre-fall.
Actively managed equity adapt to changing market outlooks.
Index funds follow benchmark blindly without defense.
Your horizon and risk capacity suit active funds combined with guided allocation.
Why Regular Plans with CFP Supervision
Regular plans offer guidance, rebalancing, and behavioral coaching.
Direct plans lack reviews and timing discipline.
CFP-backed MFDs assist in staying on target and optimizing tax.
Monitoring and Rebalancing
Review your portfolio every 6 months for drift.
If equity grows beyond 60–65%, redirect additional SIPs into debt/hybrid.
Rebalance via SIP redirection rather than lump-sum redemption.
Document proceedings for tax efficiency.
Expense and Insurance Safeguards
Ensure you have 6 months expenses in liquid funds.
Health insurance coverage is crucial—ensure minimum ?5?lakh sum assured.
No existing debt—maintain this status.
Avoid lifestyle inflation and stick to budget.
Tax Planning Considerations
Equity LTCG taxed at 12.5% on gains above ?1.25?lakh.
STCG is taxed at 20%.
Debt and hybrid fund CGT taxed as per slab.
Hybrid scheme CGT depends on equity ratio.
Annually harvest LTCG exemption by redeeming ?1.25?lakh per annum.
CFP oversight helps schedule redemptions to maximise tax benefit.
Goal Progress Tracking & Review Milestones
6 months: Check balance between equity and goal bucket allocations.
1 year: Are you on track to reach ?10?lakh toward home down-payment?
3 years: Correlate portfolio growth with ?35?lakh target.
Ongoing: Adjust SIP top-ups as your salary increases.
Risk & Contingency Management
Equity volatility can affect portfolio; hybrid/debt protects stability.
Maintain liquidity to avoid panic selling.
Rebalance portfolio before market peaks; reinvest into debt/hybrid thereafter.
Plan insurance before property acquisition: include term and health cover.
Building Flexibility and Future Enhancements
Once home down-payment target is funded, repurpose debt/hybrid SIPs toward long-term corpus.
Continue active equity SIPs with adjusted allocation for growth.
Introduce small international equity or alternative asset exposure if you prefer further diversification.
Consider a gold ETF increment if inflation risk appears higher.
Final Insights
Your disciplined SIP journey and zero debt are excellent.
The adjustments suggested help you build the six-year ?35?lakh down-payment and the fifteen-year ?2?crore corpus in a structured, low-volatility manner.
By blending growth equity, hybrid buffers, debt stability, and guided MFD planning, your strategy is both goal?aligned and resilient.
You’re on a strong path—maintain discipline, monitor progress, and adjust over time. Let me know when you'd like help with specific fund selection or setting up quarterly reviews.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by Abhishek on Oct 21, 2022Hindi
