Hello Gurus,
I am 41 years old and currently working in IT industries. My take home salary is more or less 1.8L/Month (After (income-tax, pf, etc.) all deductions). My monthly expenses (including everything + investments) are around 1.3L/Monthly.
Family of four, kids are not started their major studies, still in primary school, dependant parents and relatives.
My current investments.
1) LIC – 1.6L/Annum – approx. return would be 50+ Lakhs by 2038
2) HDFC Sanchya + - annually 4L return after 2038
3) PPF – annually 1.5L/Annum and expecting 40+Lakhs by 2034
4) PF – Right now around 20+Lakhs
5) One land – 25L
6) One Flat under construction – 25L invested/paid and total payment will be 1.15 Cr by 2028
7) One MF – Current value 8L, total investment 3.5L(Lumpsum in year of 2017)
8) Cash in hand – 70L(FD)
9) Emergency fund – 20L(FD)
10) Equity 1.6L Invested and current value 2.7L
No Loans as of now.
Apart from this I have 50L worth of term insurance, 20L health insurance cover for my Family.
I am targeting to retire by another 14 years with a corpus of 15cr or more. Please guide me how I can achieve it.
If I need to invest in MF then which all MFs I can invest in. (Risk taking appetite is moderate)
Ans: You have a well-diversified portfolio and a clear goal of retiring with a corpus of Rs 15 crores in 14 years. Let's break down a strategy to achieve this goal.
Current Financial Position
Age: 41 years
Monthly take-home salary: Rs 1.8 lakhs
Monthly expenses: Rs 1.3 lakhs
Family: Four members, with kids in primary school, dependent parents and relatives
Investments and Assets
LIC: Rs 1.6 lakhs/annum, expected return of 50+ lakhs by 2038
HDFC Sanchaya+: Rs 4 lakhs/annum, expected annual return after 2038
PPF: Rs 1.5 lakhs/annum, expected return of 40+ lakhs by 2034
PF: Current value around 20+ lakhs
Land: Worth Rs 25 lakhs
Flat under construction: Rs 25 lakhs invested, total payment will be Rs 1.15 crores by 2028
Mutual Funds: Current value Rs 8 lakhs, total investment Rs 3.5 lakhs (lumpsum in 2017)
Cash in hand (FD): Rs 70 lakhs
Emergency fund (FD): Rs 20 lakhs
Equity: Rs 1.6 lakhs invested, current value Rs 2.7 lakhs
Term insurance: Rs 50 lakhs
Health insurance: Rs 20 lakhs
Retirement Goal
Target corpus: Rs 15 crores
Time horizon: 14 years
Risk appetite: Moderate
Investment Strategy
1. Increase SIPs in Mutual Funds:
Considering your moderate risk appetite, invest in a mix of large-cap, mid-cap, and hybrid mutual funds. Actively managed funds can offer better returns compared to index funds.
2. Maximise Tax Savings:
Continue maximising your PPF and PF contributions for tax savings and secure returns.
3. Diversify Further:
Consider diversifying into debt funds for stability and fixed returns. This will balance your equity investments.
4. Real Estate Investments:
Be cautious with the flat under construction. Ensure timely completion and clear legal title to avoid future issues.
5. Emergency Fund:
You already have a substantial emergency fund. Maintain this for liquidity during unforeseen events.
6. Equity Investments:
Continue investing in equities. Direct stocks can offer high returns but require careful selection and monitoring.
7. Review Insurance Cover:
Ensure your term insurance cover is adequate. Consider increasing it to match your financial responsibilities and future goals.
Regular Monitoring and Review
Annual Review:
Regularly review your portfolio performance. Adjust investments based on market conditions and financial goals.
Financial Planner Consultation:
Seek advice from a Certified Financial Planner periodically. They can provide tailored advice and keep your investments on track.
Final Insights
You are on a good financial path with a diversified portfolio. Focus on increasing your SIPs in mutual funds and diversifying further into debt funds. Ensure your real estate investments are secure and maintain your emergency fund. Regularly review your portfolio and seek professional advice to stay on track for a comfortable retirement.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
