Hi Iam 26 years old earning 75k per month and I have car loan of 6 lakhs rupees and Iam investing around 10 k in sip splitted across small,large and Elss funds,and having 3 units of SGB and around RD of 1,50,000 and started term insurance of 1 cr rupees and I like to get corpus around 20 cr while retiring .Please suggest some diversified investment to achieve this corpus.
Ans: Current Financial Situation
Age: 26 years
Monthly Salary: Rs 75,000
Car Loan: Rs 6 lakhs
SIP Investments: Rs 10,000 in small, large, and ELSS funds
SGB Holdings: 3 units
Recurring Deposit (RD): Rs 1,50,000
Term Insurance: Rs 1 crore
Financial Goals
Build a retirement corpus of Rs 20 crore
Evaluation and Analysis
Existing Investments
Your SIPs in small, large, and ELSS funds are a good start for diversified growth.
Sovereign Gold Bonds (SGB) provide a hedge against inflation.
The recurring deposit adds stability to your portfolio but offers lower returns.
Debt Management
Your car loan of Rs 6 lakhs needs to be managed efficiently. Consider prepaying it to reduce interest burden.
Recommendations
Increasing SIP Contributions
To achieve a Rs 20 crore corpus by retirement, you need a disciplined and diversified investment approach.
Large Cap Fund: Increase your SIP to Rs 5,000 monthly. Large cap funds provide stability and steady growth.
Mid Cap Fund: Start a SIP of Rs 3,000 monthly. Mid cap funds offer higher growth potential with moderate risk.
Small Cap Fund: Continue your existing SIP of Rs 3,000 monthly. Small cap funds can deliver high returns over the long term.
ELSS Fund: Continue investing Rs 4,000 monthly. This not only provides tax benefits but also offers good returns.
Additional Investment Options
Flexi Cap Fund: Start a SIP of Rs 3,000 monthly. This fund adjusts investments across market caps based on market conditions.
International Fund: Start a SIP of Rs 2,000 monthly. This adds geographical diversification and reduces country-specific risks.
Managing Existing Debt
Car Loan: Aim to prepay the car loan as soon as possible. This will free up additional funds for investment.
Recurring Deposit: Gradually shift from RD to high-growth investment options like mutual funds. RD provides stability but lower returns.
Building an Emergency Fund
Ensure you have an emergency fund that covers at least 6 months of expenses. This fund should be in a liquid and easily accessible form.
Health Insurance
Secure a comprehensive health insurance plan for yourself. This is crucial to cover medical emergencies and prevent financial strain.
Long-term Investment Strategy
Equity Mutual Funds: Continue to focus on diversified equity funds. Review the performance annually and make adjustments if necessary.
Debt Mutual Funds: Allocate a portion of your investments to debt mutual funds for stability as you approach retirement.
Gold Investments: Continue holding SGBs as they provide a hedge against inflation and add to your diversified portfolio.
Final Insights
Increase your SIP contributions across large, mid, and small cap funds for balanced growth.
Diversify further with flexi cap and international funds.
Prepay your car loan to reduce debt burden and free up funds for investments.
Maintain an emergency fund and secure comprehensive health insurance.
Review your investment portfolio annually with a Certified Financial Planner to stay on track for your Rs 20 crore retirement goal.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
