Do you have insurance, stocks, mutual fund and personal finance-related queries?
Please ask your questions HERE and rediffGURU Milind Vadjikar, Association of Mutual Funds in India-registered MF distributor and Pension Fund Regulatory and Development Authority-registered retirement financial planning advisor, will answer them.
Ankit: I am 41 years old male working in a private firm and investing from 2017 in MFs and accumulated around 20 lakhs. My target is to achieve 3 crores in 15 years (from 2025). My portfolio is given below. Apart from MF investing NPS & PPF and sometimes in Direct equity. Questions:
1. Is my fund selection ok? With this current portfolio along with 10% step up can i achieve my goal?
2. Is SBI blue chip & HSBC small cap funds ok or do I switch to other funds?
3. Want to invest 5000 more, in which fund should I allocate?
4. Shall I stop PPF and that money I divert to a mutual fund?
5. Some other funds are also there in my portfolio which I stopped SIP but did not withdraw the amount. What is the best strategy in this case?
Mutual Funds S/no Fund name Amount (RS) /month 1 SBI Blue Chip fund 5000 2 Parag Parikh Flexi Cap fund 10000 3 Kotak Multicap Fund 5000 4 Motilal Oswal Mid Cap fund 10000 5 HDFC Mid Cap opportunities 5000 7 HSBC Small Cap fund 5000 8 Nippon India Small Cap fund 5000 Total 45000 S/no NPS Amount (RS) /month 1 Tier -1 7000 2 Tier -2 3000 PPF Amount (RS) / year 1 ICICI PPF 60000
Please find pointwise reply to your queries:
1. You already have allocation to small and mid-caps through Flexi-cap and multi-cap funds. Despite that you may have additional allocation to one dedicated mid and small cap fund but not two!
The monthly SIPs into second small cap and mid-cap fund may instead be moved to an aggressive hybrid type mutual fund and multi asset allocation type mutual fund.
You may achieve your target with the proposed step up(10%) planned even considering 10% modest returns from MF investments.
2. Funds are okay however you need to review risk-adjusted performance every year with reference to the benchmark and category average and then decide suitably.
3. You may invest additional 5k in gold mutual fund.
4. Keep contributing to PPF. It's a social security scheme and goes towards sovereign debt in your overall asset allocation.
5. Review past MF holding in line with your overall asset allocation, portfolio overlap, risk-adjusted performance and decide as appropriate.
You may select and avoid funds from suggested categories based on risk adjusted performance criteria.
Anonymous: I am a 22 year old commerce graduate. I got a job in December. My salary is Rs 16,000 per month. I am ready to invest Rs 2,000 per month. Should I invest in an RD or a chit fund? What about SIPs or mutual funds? Please suggest where to invest and how it can help me.
Chit funds often turn out to be cheat funds so a strict NO.
A RD with a PSU bank is a good way to begin your investment journey.
I recommend you to look at SIPs in mutual funds after your RD matures if you have 6 months of expense coverage as emergency fund and you have bought term life insurance.
Also don't forget to open and invest in NPS for retirement planning.
Anonymous: I'm a 20yr old, currently doing internship and getting stipend of 30k, going to get package of 10LPA in 6 months. My expenses are minimum around 20k/month. I don't have any loans. I want to save money and also get at least minimal returns. I've very less idea about share market also. How can I save money and create a plan for me to save max and also get maximum returns.
Here's what you can do:
Indrani: I am 44, monthly income 24,000.I am married. Have savings of 29 lakh in ppf. How can i retire with a handsome amount with mutual fund? I want to stop saving in ppf. Is it advisable if i transfer a chunk of my ppf saving in mutual fund?
If you want to have good corpus for your retirement then I recommend you invest this money (29L) in NPS.
Apart from this also do regular investment of 10 K per month (NPS).
These lump sum and regular investment may provide you a corpus of around 1.4 Cr at the age of 60.
NPS is much better, in fact the best in my view, for retirement planning.
NPS allows limited withdrawal after 5 years.
Anonymous: With the cost of living rising sharply, many households are struggling to stay on top of their finances. What practical budgeting techniques can help people manage their expenses more effectively without drastically reducing their quality of life?
You can get many budgeting methods online however the key is the strict fiscal discipline, optimal asset allocation and frugal shopping.
Few measures to improve monthly budget:
1. Mind your credit card spends and ensure timely payment.
2. Avoid impulse purchases.
3. Limit discretionary spending.
4. Avoid FOMO shopping.
5. Prefer E-Com/Q-Com to get price benefits but only from reputed portals.
6. Keep 6-8 month worth regular expenses coverage corpus as emergency fund.
7. Be adequately insured for life as well as health.
Given below two budgeting methods:
1. 50/30/20 method
Traditionally in this method it advocates that 50% of your income should go towards essential needs, 30% for discretionary needs and balance 20% for investment, however I prefer to flip it in this way:
2. Pay-yourself-first budget
The pay-yourself-first budget is another simple budgeting method focusing basically on savings and debt repayment. With this method, you set aside a specific amount from each monthly income for savings and debt repayments, spending/investing the rest as you feel appropriate.
Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.
Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.