My monthly in hand salary is 66820, I have to spend around 38K per month, so how to invest the remaining amount, so that I have the corpus of 1.6cr - 2 Cr Cr, when I am 50?, I am now 33 year old.
Ans: Assessing Your Financial Goals
You want to build a corpus of Rs. 1.6 to 2 crore by age 50. At 33, you have 17 years to achieve this goal. Your monthly in-hand salary is Rs. 66,820, and you spend around Rs. 38,000 per month. This leaves you with Rs. 28,820 for investments. Let’s plan a strategy to help you achieve your target.
Monthly Savings Allocation
With Rs. 28,820 available monthly, consider diversifying your investments. Diversification helps in balancing risk and returns. Here’s a suggested allocation:
Equity Mutual Funds:
Invest in equity mutual funds for long-term growth. Equity funds have the potential for high returns, which can help in reaching your target corpus.
Debt Mutual Funds:
Allocate a portion to debt mutual funds for stability. These funds are less volatile and provide steady returns. They balance the risk of equity investments.
Public Provident Fund (PPF):
Consider PPF for tax-free returns and safety. It’s a long-term investment with a lock-in period, aligning well with your 17-year horizon.
Benefits of Actively Managed Funds
Actively managed funds involve professional fund managers making investment decisions. They aim to outperform the market. Here are some benefits:
Professional Expertise:
Fund managers use their expertise to select stocks, aiming for higher returns.
Flexibility:
Actively managed funds can adjust portfolios based on market conditions.
Disadvantages of Direct Funds
Direct funds might seem attractive due to lower expense ratios. However, investing through a Certified Financial Planner (CFP) offers several advantages:
Expert Guidance:
A CFP provides personalized advice based on your financial goals.
Regular Monitoring:
They monitor your investments and make adjustments as needed.
Peace of Mind:
Having a professional manage your investments reduces the stress of decision-making.
Investing Through a CFP
Investing through a CFP ensures a comprehensive approach. They consider all aspects of your financial life:
Risk Tolerance:
They assess your risk appetite and recommend suitable investments.
Tax Efficiency:
They help optimize your investments for tax benefits.
Goal-Based Planning:
Your investments are aligned with your financial goals.
Suggested Investment Plan
To achieve your target corpus, here’s a suggested investment plan:
Equity Mutual Funds:
Allocate 60% to equity mutual funds. These funds offer high growth potential.
Debt Mutual Funds:
Allocate 20% to debt mutual funds. These funds provide stability and regular returns.
PPF:
Allocate 20% to PPF. This ensures safety and tax-free returns.
Regular Review and Adjustments
Review your portfolio regularly. Market conditions change, and your portfolio should adapt. A CFP can help with this:
Performance Review:
Check the performance of your funds annually.
Rebalancing:
Adjust your portfolio to maintain the desired asset allocation.
Final Insights
Achieving a corpus of Rs. 1.6 to 2 crore by 50 is attainable with disciplined investing. Diversify your investments across equity, debt, and PPF. Invest through a CFP for expert guidance and regular monitoring. Stay committed to your investment plan and review it regularly. This approach will help you reach your financial goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
