I am 26 years old, unmarried and earn Rs 60,000 per month. i just started Investment With SIP of Rs 3,000 in mutual funds. I my. But I pay an EMI of Rs 15,000 education loan, I want to save tax and develop myself estate, I will buy health and life insurance this year. how i Investment,
Adhil Shetty, CEO, BankBazaar, replies: First, set your financial goals for the near-term, short-term and long-term. For example, one of your goals might be to close your education loan early. To do this, you need to come up with a plan that tells you how much you need to set aside each month for this goal. Second, try to increase your monthly investment. Ideally, try to save at least 30-40% of your salary. This would be Rs 18,000-24,000 per month. Part of this can be used for early closure of your education loan. Third, spread your investments across different instruments. Put some money in ELSS funds, some in balanced funds and some in fixed instruments like NSC, PPF and EPF. You may also want to increase your monthly EPF contribution. Build an emergency fund equal to 6-12 months’ salary as a cushion for any financial emergency.
I am 24 years old. My gross salary is around Rs 40,000 per month. I want to build a corpus of around Rs 2 crore for my retirement at the age of 50. Please advise me about the best possible ways to achieve this goal.
Praleen Bajpai, Founder of Finfix® Research & Analytics, replied
, Create a contingency fund equal to the monthly expenses of the first 12 months. You can build this contingency amount by regularly setting aside some money in recurring deposits or liquid funds. For your long-term goal, divide your monthly investments into two broad instruments – Employees’ Provident Fund (EPF) and Mutual Funds. Contribution to EPF will bring stability to your portfolio. Contribution can be used for you do Savings and withdrawals are tax free. With regard to mutual funds, start with index funds and flexi-cap funds to build your core portfolio. Simultaneously, set aside a small amount in a debt fund for near-term expenses such as rental deposits, vacations or vehicle purchases. This will ensure that your long-term investments remain undisturbed. Going forward, as your salary increases, you can add a tax saving mutual fund (depending on the need) and an international fund. Overall, the current target can be achieved with an SIP of Rs 5,000 per month in equity mutual funds and 10% growth annually. In this way, your first year investment will be Rs 60,000, then next year Rs 66,000 (Rs 5,500/month), then 72,000 (Rs 6,000/month) and so on. Be sure to review your goals and plan accordingly, over time and with the addition of new responsibilities. Lastly, go for a term plan and health cover.