I am 59 years old and am retired. How should I invest the money I receive from the sale of my apartment?
I am 59 years old and practically retired, but I still have a reasonable income from investments and advice. I save 50% of my income. I have an apartment which I am selling for Rs 2 crore. How should I invest the money?
Raj Khosla, Founder and CEO of MyMoneyMantra.com responds: “The sale of real estate will result in capital gains tax. Discuss the possibilities for tax savings with a tax advisor. Next, determine your immediate, medium, and long-term goals. Go for a mix of debt and equity based on goals and risk appetite. Invest Rs 1 crore in liquid funds and start systematic transfer plans. Recommended funds are: Axis Bluechip, Kotak Bluechip, UTI Flexi Cap, Invesco India Multi Cap and Mirae Asset Emerging Bluechip Fund with a horizon of 5 to 7 years. Review and rebalance portfolio every three years.With the amount in the balance, buy government backed high yield investment options such as the Seniors Savings Plan, National Pension System, and Monthly Income Plan of the post. Specify Rs 10 lakh as emergency fund in bank FDs. Also make sure you have adequate life and health insurance for yourself and your spouse.
I’m 31 years old. My net monthly salary is Rs 70,000. I have a home loan of Rs 50 lakh. The IME is Rs 36,000 payable over 25 years. My first goal is to pay off my mortgage in 5-6 years. The other goal is to save Rs 8 lakh for my wedding next year. I have invested in stocks and my portfolio is worth Rs 18 lakh. I have a SIP of Rs 5,000 running in Axis Small Cap Fund. How do I meet my goals given an 8% per year salary increase and inflation?
Sanjiv Bajaj, Co-Chairman and Managing Director of Bajaj Capital, responds: “After deducting the EMI for Rs 36,000, the SIP amount for Rs 5,000 and other household expenses, we assume you would be able to invest. Rs 10,000 per month. However, the SIP investment of Rs 15,000 per month will not be enough to accumulate Rs 50 lakh in six years. We suggest that you increase the term of office by at least 10 years. A 12% CAGR on the existing portfolio and new investments (with an annual SIP growth rate of 8%) for the next 10 years should help you reach your goal. The short term goal of accumulating Rs 8 lakh for the wedding can be achieved with your existing wallet. It is advisable to transfer Rs 8 lakh of equity to fixed income funds to achieve your second goal You can launch new SIPs for Rs 2,000 in each of the following programs: Canara Robeco Emerging Equities, HDFC Large and Mid Cap, Parag Parikh Flexi Cap, Mirae Asset Mid Cap and IDFC Sterling Value Fund. ”