I stay in Bangalore with my wife and two kids. I am 37 and my wife is 33 and we are self-employed.
Currently, I have an investible corpus of Rs 41Lacs. Apart from that our (my wife and I) approximate monthly earning is Rs 1.5 Lacs. Which fluctuates by +/- 20% in every 3-4 months. Our monthly expenses are around 80K. Which makes us save around 70K per month. We stay in a rented accommodation and do not possess any other assets and liabilities.
After taking the above facts into account, I have made an investment plan as given below:
Emergency Corpus ( 15% of the total corpus,i.e, 41 lacs )
Bonds/ Debt Fund ( Total Qty - 4, 15% of the total corpus )
Zerodha Small Case (Total Qty-4 stocks in a basket, 10% of the total corpus + 15K per month as SIP from monthly savings )
Fixed Deposit ( Total Qty - 1, 10% of the total corpus )
Arbitrage Fund ( Total Qty - 3, 25% of the total corpus )
Equity Mutual Fund ( Total Qty - 4, 25% of the total corpus + 15K per month as SIP from monthly savings )
After setting aside the above corpus in the different investment instruments and allocating 30K per month in SIP, I should be left with 40K as an emergency monthly fund which can be put in a liquid fund to get more return than a normal bank savings account.
My goals are:
To generate at least 2-3 crores in the next 5 years
To generate a passive income stream which gives me at least 15-20K or more per month.
@Karthik can you give me some pointers as to how do I go about this.
Unfortunately, I’m not a Certified Financial Planners (CFP), so a bit hesitant to advise. However, I can suggest a few things but would request you to also consult a good CFP.
Let me start with your goals -
2-3Cr in 5 years - You are essentially parking 10L (25% of 40L) plus about 30K monthly SIP. Even if you assume a 15% (best case scenario) CAGR, at best this can lead to about 40-45L in 5 years. Check the SIP calculator on Coin.
Passive income stream - This is a wrong approach to savings. Both you and your wife have age by your side. This is the time to deploy more cash into investments. Don’t think of withdrawals. Delayed gratification helps, especially with investments. Focus on deploying more and more cash into SIPs.
Some suggestions wrt to your corpus split up -
Emergency corpus - keep 6 months of your monthly expense money in the form of cash. You can invest this in Liquidbees
Bonds/Debt funds - 15% is good
Smallcase - Consider a higher exposure, especially since you have age by your side. This means you can take higher risk.
Fixed Income - 10-15% is fine, I’d suggest you could even look at Government Securities.
Arbitrage Funds - Not necessary
Equity MF - This is where the bulk of your investments should be. Consider at least 1 large cap, 1 small and mid cap, and 1 ELSS fund here. Keep SIPing more into large cap and the small cap fund. Invest just enough to cover your tax angle into your ELSS fund.
Apart from this, I’d even suggest you start a SIP in an Index ETF .
Again, please talk to your CFP about this. Good luck!
Great suggestions.
Please connect with FEE only financial planner (IFA) to receive unbiased advise which will give a strategic direction to your Goal(s).
Being at same crossroads in terms of age I will bet it would be a great experience for you to have your plan done comprehensively.
Why ? What’s your risk appetite? Are you insured for life or loss of income? What’s your medical coverage for near and dear ones?