I am 28 years old unmarried. My current salary is 67000. I give 17000 at home to parents. I have a under construction home whose EMI is 13000 now (expected 20000 after possession). Apart from that I invest 5000 in stocks (strictly swing trading in stocks). I invest in mutual funds ( Parag Parikh Flexicap Fund - Rs 2900, Kotak Small Cap Fund - 1450, Motilal Oswal Midcap Fund - 1450). I also invest in NPS - Active Choice (E - 75%, G - 10%, C - 10%, A - 5%) I have LIC term plan with bonus wherein I have to pay 15 lacs for 35 years and I will get 75 lacs (by age of 57).
Can you please suggest any changes. My goal is to accumulate 10+ cr by age 58
Ans: Thank you for sharing your financial details with me. It's great to see that you are actively planning for your future and investing in various avenues at such a young age.
Considering your goals and current financial situation, here are some suggestions for optimizing your investment portfolio:
Increase Savings:
Given your current salary and expenses, consider increasing your savings rate gradually. Aim to allocate a higher percentage of your income towards investments to accelerate wealth accumulation.
Review Mutual Fund Portfolio:
While your selection of mutual funds is diversified across different categories, it's essential to periodically review their performance and suitability for your goals.
Consider evaluating the consistency of returns, fund manager track record, expense ratios, and overall portfolio alignment with your risk appetite and investment objectives.
You may also explore adding or replacing funds to further diversify your portfolio or align with specific investment themes or strategies.
Revisit NPS Allocation:
Your allocation in NPS is quite aggressive, with a significant portion allocated to equities (75%). While this can potentially generate higher returns over the long term, it also exposes you to higher market volatility.
Consider reassessing your risk tolerance and investment horizon to determine if the current asset allocation aligns with your comfort level.
Depending on your risk appetite and financial goals, you may consider adjusting the equity-debt allocation to achieve a more balanced and diversified portfolio.
Evaluate Insurance Coverage:
While you have a term plan with a significant sum assured, it's essential to ensure that the coverage adequately meets your future financial liabilities and responsibilities.
Consider reviewing your insurance needs periodically, especially as your income and financial obligations change over time. You may need to increase coverage or explore additional insurance products to protect against unforeseen circumstances adequately.
Explore Long-Term Wealth Creation:
To achieve your goal of accumulating 10+ crores by age 58, focus on long-term wealth creation strategies that offer potential for compounding and growth.
Consider exploring alternative investment options such as real estate (excluding your current home), retirement accounts, tax-saving instruments, and systematic investment plans (SIPs) in diversified equity funds.
Remember, financial planning is a dynamic process that requires regular review and adjustments based on changing circumstances and goals. Consider consulting with a certified financial planner to create a personalized financial plan tailored to your needs and aspirations.
Keep up the good work and stay committed to your financial goals. With prudent planning and disciplined investing, you can achieve financial success and secure a prosperous future.
