You are here: Rediff Home » India » Get Ahead » Money » Invest
Search: The Web
  Discuss this Article   |      Email this Article   |      Print this Article

Financial planning: 'I want Rs 50 lakhs by 2020'
Get news updates:What's this?
January 24, 2008

Do you think this is a good time to invest your money in mutual funds and stocks? Which mutual funds will help you get good returns in the long-term? Should you go for SIP or put your money in ELSS funds?

How can you invest your money to get a return of Rs 30,000 per month after 10 years or create wealth worth Rs 5 lakhs by 2020?

In a chat with Get Ahead readers on January 23, financial planning expert Vetapalem Sridhar answered these and several other queries related to mutual fund investments, financial planning and how to achieve financial freedom for you and your family.

For those of you who missed the chat, here is the transcript.

nkst asked, i have to invest 70000 to save tax. please suggest the right fund for me.

Vetapalem Sridhar answers, Hi! It is not possible to know which will be the best performing funds in future. Among my watchlist, Sundaram Tax Saver and Principal Tax Savings Fund appear.

joshi asked, i have been investing in MF via SIP route for the past 3 years. One of the funds - Franklin Prima - hasn't done well off late. I am planning to stop SIP in Prima and start SIP in some other midcap fund ( Reliance [Get Quote] Growth or Sundaram Midcap). What should I do with the units that I already have in Prima, can I keep it as it is or sell the units, which is a better option.. any comments appreciated .. thanks.

Vetapalem Sridhar answers, Prima has not been such a gud performer. I would suggest that u can switch over to a fund like JM Emerging Leaders instead of the funds mentioned by u. Would suggest that timing of buy and sell should be on the same day to aviod not being present in the mkts. If u have spare money equal to the investment in Prima, buy and sell on the same day.

Malini asked, I have an SIP in various funds amounting to Rs.13K per month, since 2005. In the recent crash, my portfolio has taken a severe beating. Should I increase my investments in govt securities like PPF, NSC, Post Office etc. (where I invest about 20K per month) or should I continue with the SIP?

Vetapalem Sridhar answers, Infact if u can get money from ur PPF or other places, this would be a better time to invest into the mkt. It is easy to say -- BUY LOW, SELL HIGH. But ur above query is talking about the opposite thing. Invest with a 5 yrs horizon.

aadhan asked, I am 27, still want to think that i am small time investor, but i'm in it for the long run, is it still wise to invest? i'm looking to invest upto 20,000.. is it still worth my effort/time? or should I look into putting more money?

Vetapalem Sridhar answers, Even Rakesh Jhunjhunwala (a very succesful Trader/Investor of India) started his investing with Rs 5K. It is not how much money u start investing with but rather how wisely do u invest ur money. If u have a long term horizon it definitely makes sense to invest into equities. U can starting investing by looking at HDFC [Get Quote] Growth Fund, Reliance Vision.

nehal asked, Hello sir, i am 23 my current salary is 10,000 PM my spending is not more then 5000 PM what i can do? means i should rest other money to FD's or should i go for stock option?

Vetapalem Sridhar answers, Hi Nehal, It is gud to see u take interest in ur savings from such a young age. Do focus on learning from unbiased sources (not parents, friends or colleagues) about investing and managing money. Presently it makes more sense to invest part of ur savigns thro SIP into diversified Mutual Funds with an atlest 5 yrs horizon. U can look at HDFC Growth, Sundaram Select Focus and JM Emerging Leaders Fund. At the same time u can start to learn about various investment options.

Ashiva asked, Hi Sridhar, I have a home loan and LIC [Get Quote] policies, till march of this year all together Loan (principal 37K) and policy premium(40K) its coming to 77K so still 23K left which I can save to make 1 Lac Savings, my Qn is should I prepay Principal for home loan or put in ELSS funds?

Vetapalem Sridhar answers, ELSS with a 5 yrs horizon would be a better idea.

ntsramesh asked, I am planning to obtain PAN card for my kid of age 2. what are the documents to be submitted for obtaining pan card for kids?

Vetapalem Sridhar answers, U dont need PAN card for kids. U can submit ur PAN card wherever u r the gaurdian for the child in case of any investments.

gnanss asked, Hi sridhar, Currently I invested in Reliance Tax Saver ELSS dividend for around 20k, i've big doubt what's the difference between growth and dividend in these case? Also how hot is my fund?

Vetapalem Sridhar answers, I had written a comprehensive article on Dividend Vs Growth Options. U can read thro the link below for clarity on the issue. It is a gud fund.

rkt asked, From long term perspective, having one PPF on my name and one on my wife's name, as i can invest 70k to each account annualy, do you think is this good investment from long term perspective? or MF will be better option?

Vetapalem Sridhar answers, U put money in a PPF for a long term horizon. With the same horizon, Mutual Funds would be a better option.

ktanikel asked, Hi. I am 38 years of age. Is it better to invest in LIC/any other retirement policies. If so when should one start investing in retirement policies and which one could be the best?

Vetapalem Sridhar answers, Specific Retirement Plans r not flexible. It makes more sense to accumulate funds thro investing in equities with a long term horizon. U should start investing as early in life as possible.

Vishal Kumar Sinha asked, Hi Sridhar,how are you? i am 28 yrs old and have been working in a software company since last one year. my salary is 22,000 rs p.m. till yet, i have not invested any where, but i am intrested. please let me know all the possible ways i can invest/ thanx in advance.

Vetapalem Sridhar answers, R u married? If there r dependants on ur income then first take up an Adequate TERM Insurance policy. After this identify that portion of savings that u can keep invested for atleast 5 yrs or more. This money u can invest into a ELSS MF, which would enable the money to be invested into equities and at the same time give u tax benefit.

prince asked, How much shud i invest so as i get a monthly 30k after 10ys. i have a SIP of 35k/month in foll MF-equity div-reinvested JM Emerg Lead /Rel Vision/Birla Sun Life-eq/ABN Eq/Kotak 30/Sundaram Select focus/Franklin Prima plus. If i invest 1L/month for 2yrs and then 25k for 8yrs. Will i achieve fin freedom in next 10yrs?

Vetapalem Sridhar answers, My estimate is that if u continue to invest in into MFs 1L pm for first 2 yrs and 25K pm for next 8 yrs then u will be able to accumulate around 1.3 Cr in 10 yrs time. This can support a 30K withdrawal in today's terms p.m. through out ur life if u continue to keep the money invested into equities. All funds that u hold r gud funds.

Nisha asked, Dear Mr. Sridhar, I am getting married soon and me and my fiance together have a package of Rs.8 lacs. and the only liability is a home loan of Rs. 10 lacs. We have a collective savings of about 15 lacs in FDs, MFs and Shares. How should we go about planning our financial future to gain financial independence in the next 10 years?

Vetapalem Sridhar answers, Hi Nisha, wishing u the best for ur marriage. U have not mentioned who has taken the housing loan. It would make sense for the both of u to take up an adequate TERM Insurance plan that covers all existing liabilities. It should also be sufficient to take care of dependants on ur income. All money that u can invest with a minimum 5 yrs horizon should go towards equity. If u r not knowledgeable about direct shares, it would make more sense to invest into equities thro MFs.

savitha asked, hello Mr. Sridhar, we are expecting our baby next month. i want to invest money for my baby's future. Pls. suggest a better way of investing i.e either in ULIPs, Normal insurance plans or Mutual fund children's schemes?

Vetapalem Sridhar answers, Congratulations Savitha. Plz read thro the link below carefully as it deals comprehensively with investing money for child's future. It is a slide show, so click NEXT to read thro.

jack asked, Hi Sridhar, Is it possible to redeem ELSS fund before 3 years with some fine?

Vetapalem Sridhar answers, U cannot redeem a ELSS before 3 yrs. Even in case the first holder dies, the nominee cannot withdraw the money till 3 yrs r complete from the date of investment in a ELSS scheme.

seem asked, Hello sir, I am a married female aged 26, My husband & my take home is total 70000 per month, I have purchased a flat on loan on my name only for which emi is 12k, we have taken up ELSS MF, SBI [Get Quote] (5000)DSP (3000), HDFC tax (3000) thru SIP per month, LIC of total 39K per year, can you recommend some investment thru which my husband can save tax?

Vetapalem Sridhar answers, Ur husband can invest into ELSS MFs to save tax. They have the potential to return the best returns over the long run.

young_investor asked, Hello !!! I'm Gaurav just finished MBA...earning 15 k pm in an IT industry. Salary growing rate - 20% pa. My Goal - Rs 50 Lacs till 2020. Liability - Education Loan : 4 lacs (6 pm) How can i achieve my goal? Thanks.

Vetapalem Sridhar answers, U start investing with 5K p.m. from now, and increase this amount by 20% each mth. U should roughly end up with around 50L at the end of 2020 after paying for ur education loan.

jaichand asked, Hi Sir, I have investment in following mf through SIP route: Franklin Templeton (G)Rs. 1000 pm, HDFC Tax Plan (Rs. 1500 pm), SBI Tax Plan Rs. 15000 pm and HDFC Young Children Plan (Rs. 3000 pm). I would like to invst Rs. 4000 more through Sip route. Pls let me know which MF I should take? I have an investment plan considering an investment plan of 10-15 years.

Vetapalem Sridhar answers, Do not increase any more ELSS funds. Continue investing in the abouve funds. Invest the 4K into JM Emerging Leaders fund if u have a 10-15 yrs horizon which u have mentioned.

Vetapalem Sridhar says, Hope that u find my answers useful! Will catch up again sometime soon.....

Vetapalem Sridhar is a financial planning specialist based in Pune. He can be reached at

 Email this Article      Print this Article
© 2008 India Limited. All Rights Reserved. Disclaimer | Feedback