Hi Joshi Ji,
I am 42 years male and having no such exposure in SIP or any other growth funds. Kindly suggest me in which way I can invest at least 35 k/month to generate maximum corpus for my retirement and 20 k/month for my kid's higher education. I have one son and he is currently in class 6th. I have some (approx 50 k/yearly) insurance linked investment rest PF and term insurance, son's tution fees generally fulfill the income tax related requirement.
Kindly suggest how to plan my finances. I am seriously feeling that I am late at my financial planning but want to leap it from hereon.
Ans: Dear Sanjay,
Thank you for reaching out for financial advice. It's commendable that you're taking proactive steps towards planning your finances, even if you feel you're starting later than desired. With careful planning and disciplined investing, you can still work towards achieving your financial goals.
Given your objectives of building a corpus for retirement and your child's higher education, here's a suggested plan:
Retirement Planning:
Start investing ?35,000 per month in mutual funds through SIPs targeting retirement. Allocate funds across diversified equity mutual funds to maximize growth potential over the long term.
Consider funds that align with your risk tolerance and investment horizon. Since you're starting relatively late, you may need to take a slightly higher risk to accelerate wealth accumulation.
Regularly review your investment portfolio and adjust asset allocation as needed based on changing market conditions and your evolving financial situation.
Child's Higher Education:
Allocate ?20,000 per month towards building a corpus for your child's higher education.
Invest this amount in a mix of equity and debt mutual funds to balance growth potential with stability. Since your child is in class 6th, you have approximately 6-10 years until higher education expenses arise. You can afford to take a moderate risk with this investment.
Monitor the performance of the funds regularly and make adjustments as needed to stay on track towards your goal.
Insurance and Other Investments:
Continue with your existing insurance-linked investments, PF contributions, and term insurance. Ensure that you have adequate coverage to protect your family's financial future in case of unforeseen events.
Utilize tax-saving investment options such as ELSS (Equity Linked Savings Scheme) mutual funds to optimize tax benefits while building wealth.
Regular Financial Review:
Schedule regular financial reviews with a qualified financial advisor to assess your progress, make necessary adjustments, and ensure that you're on track to meet your financial goals.
Take advantage of any surplus income or windfalls by channeling them towards your investment goals to accelerate wealth accumulation.
Remember, it's never too late to start planning for your financial future. By staying committed to your goals, investing wisely, and seeking professional guidance when needed, you can achieve financial security and provide for your family's needs.
Best regards,
Ramalingam, MBA, CFP
Chief Financial Planner
