Early retirement – How to invest for later year

POSTED BY Vishal Bhatia ON January 23, 2013 10:31 am COMMENTS (8)

Dear Members – I wanted to ask question in this forum as it is an unbiased and highly informed forum. I am a physician practicing in USA – 40 yrs old. I am planning to retire in next 1 year in India. I have my monthly expenses kept aside and will be working part-time in India to take care of my day to day expenses. I want to invest Rs 1.5 – 2 lac / month for next 20 – 25 years to have a substantial corpus at age of 60 to take care of my expenses and to make a charitable trust to provide medication etc for poor patients. What is the best vehicle to invest in? what equity funds I should be investing in? I have been looking at HDFC top 200 and HDFC equity funds. 

I appreciate your help very much. 


8 replies on this article “Early retirement – How to invest for later year”

  1. Dear Vishal, as of now you are out of India, so I do not know how ‘ll you manage the required paper work & interestingly as you are in US of A, some AMCs ‘ll not accept your application at all. Please check with Franklin & DSP before jumping in.

    Regarding opting between direct or distributor, if you are availing services of a financial planner from day one, the advisory part for selection of MFs & AMCs is taken care off by that planner, so the add on benefit of distributors’ advice ‘ll not be there with you. So you can opt for direct option to save on trail commission.



  2. Vishal Bhatia says:

    Dear Ashal and Ramesh,
    Thanks for your replies. It is extremely helpful to get your feedback. I will also consult a financial planner but want to be clear in my mind as to how to proceed. Another question:

    1. Do you recommend that Eq. MF investemnt should be done directly to the respective fund houses (HDFC, Franklin etc.) or should I get a brokerage like ICICDirect or Kotak and set up SIP and fund purchases through them?


    1. Ramesh says:

      In current conditions, it is best to go directly to AMC, and select 1 or 2 differently styled diversified equity funds.

      You need to understand the difference between getting the best return and getting a decent above average return on your money. The former is a luck thing while the latter more depends upon your persistence.

      Go with one fund only in one fund house.

      My reco
      1. Franklin. Either blue chip or prima plus or flexi cap, in order of increasing risk/return grading.
      2. For equity only, DSP: top 100 or DSP equity, again in increasing order of risk/return grading.
      3. HDFC: top 200 or hdfc equity, similar order.

      That is it. No need of mixing more funds. No need for mixing of Amcs.

      All of these are profitable AMCs, so I don’t see then leaving. But still of something of that sorry happens, you can shift to the alternative.

  3. Dear Vishal, let me add a bit in dear Ramesh’s reply. He is also a doctor by profession. So in a sense he can understand your life & situations better than other normal people. That’s why he has given his honest opinion.

    You are free to avail services of a professional or DIY. Choice rests with you.



  4. Ramesh says:

    Why not get the help of a professional like Manish/Nandish to look into these aspects?

    1. Since you are doctor, I mostly think you are not very inclined in managing money yourself. So, let a professional help you.

    2. You will need to establish a trust for all those charity works too, and a professional will help you start, manage and maintain that.

    3. Since the amount of your investments is big, and the goals are complex involving charity and taxation issues, I think it will be best for you to do this way.

    P.S. I do not have any personal benefit in recommending Manish to you. If you can find out someone else, well and good.

  5. Dear Vishal, please ignore the prev. reply as it was meant for another discussion.

    Here is my take – between the 2 HDFC funds, please opt one & add Quantum Long Term Eq. fund. Please make sure, you are returning back to India within your specific time frame. The reason is – if you delay your return, even the accumulated returns in these Indian Eq. funds ‘ll be added to your American income & you w’d have to pay tax on it.

    Other things can be discussed once you are back in India.



  6. Dear Vishal, as you are in 30% tac slab, dividend stripping ‘ll create more problem to calculate your STCG. So in my personal opinion, please invest in growth plans only.

    There is more to it – as you are planning to invest in Eq. funds using STP. You can notuse STP from Rel. debt fund to HDFC eq. funds or to DSP eq. funds or to Quantum eq. funds.

    You w’d have to invest in the debt funds of respective individual eq. funds where you want to invest finally.



  7. Dear Dr. Vishal,
    invest a majog chunk of the money 60-70% in large cap funds like Franklin India Blue Chip,
    ICICI Prudential Focused Bluechip Equity, DSPBR Top 100 Equity Reg

    and some small- and mid-cap funds like
    IDFC Premier Equity
    ICICI Prudential Discovery

    HDFC Top 200 is a good large and mid-cap fund which you could also consider.
    HDFC equity is quite similar to top 200 but more risky and choosing one of them should do.

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