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Anonymous: I am seeking advice on achieving early retirement at 40. Below are my details. I would appreciate your recommendations on how to optimise my financial plan.
Personal details:
• Age: 36
• Spouse: 36
• Child: 7 years old in class
• Monthly expense: Rs 1.5 lakh
• Medical insurance: Rs 50 lakh (HDFC Ergo Optima Secure)
Goals:
1. Early retirement: At 40
2. Kid’s higher education: Rs 1 crore (+10% inflation)
Portfolio:
• Mutual funds: Rs 6 crore (Nifty50 Index — 20%, Parag Parikh Flexi Cap — 25%, HDFC Midcap Opportunities — 25%, Nippon Small Cap — 15%, ICICI BAF — 10%, ICICI India Opportunity — 5%)
• FD: Rs 40 lakh
• PPF: Rs 46 lakh
• Real estate, excluding home (for unpredicted event): Rs 1.2 crore
• Loans: None
• Own Home
Questions:
1. Am I on track to retire by 40?
2. Can I stop investing as I plan something else with the money I earn OR I need to invest more?
3. Do you recommend any changes to my asset allocation or mutual funds? I would greatly appreciate your guidance.
Looking at your current situation, I feel retiring early is not feasible unless you have an alternative stream of income.
You have many goals to achieve and a majority of your portfolio is locked in real estate.
I suggest you follow an investment strategy which works for you and your circumstances.
Draco: I earn Rs 20k per month at the age of 20 now. How can I make up to Rs 50k at the age of 26 from now? I have not invested in any MF or other investing.
I think if you look for good opportunities in work, you should be able to do it. Also investing a part of your income is a good start to creating your future portfolio.
Anonymous: I am 50 years old. Having a housing loan with Rs 16,500 EMI for another 13 years. Also I am having a cc loan for which I am paying 5000 pm interest. I have a son studying in 11th, science. My monthly household expenses are Rs 12,500. My income is Rs 35,000 pm. Please guide me so that I can retire at age 60 with at least some pride.
Please pay off your loans as soon as possible, especially credit card loan.
Your debt service to income ratio should never exceed 35 per cent of your income. In your case it is 61.43 per cent, which is extremely high.
You may consider refinancing your loan or arrange for any additional income source.
Saumya: I’m a 33 year old mother of a 2 yr old boy. Salary is Rs 12 lakh per annum. Invest in PPF only. Want to save and grow money. How and where to start?
I would suggest that you see meet a financial planner for this purpose. They would assess your risk profile and recommend accordingly.
Anonymous: Respected Sir, I have SIP of Rs 10k / Fund in 3 Quant Mutual funds: Quant Small Cap Fund, Quant Mid Cap Fund & Quant Active Fund. Currently all these 3 funds are red with Overall loss of 5% to my investment value…Please suggest should I continue or exit these mutual funds…
Please stay put in your investments. Please continue with your investment strategy.
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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.
