financial planning through mutual fund.

POSTED BY neeraj ON November 21, 2010 9:30 pm COMMENTS (4)

I am 22 years of age and i am earning 25000 per month from last 3 months.

I am going to take a term insurance for 50 lacs for a period of 35 years and  i am planning to invest Rs.5000 per month in mutual fund for first 3 years and from then onwards Rs.1000 per month. I would like to have some money in PPf and in india post NSC. But not sure how to plan.

1. I want to get a good financial plan to buy a house in 5 years and then for childrens expense.

2. I want to know what should i do after investing in mutual fund…should i leave it like that for years untill i need it or do something in between. how the money in mutual fund is compounded?

3. Please keep in mind that i should be able to save the income tax also.

NB: Dont advice me on the basis of my plan. Just give a review for my plan and also give me a new plan as you think wil b better for me !!

thank you,

neeraj

4 replies on this article “financial planning through mutual fund.”

  1. Ramesh Mangal says:

    Not sure regarding minimum deposit requirements, it is Rs 500 per year. Plus, illiquidity for 15 years. Only 1 account for each person. Max 70k per year.

    Thats why, I would not advise a person 22 years old to have a PPF account. maybe 15-20 years before he is expected to retire (in this case, after 40 years age, which is about 20 years afterwards.). 🙂

  2. Dominic Prakash says:

    Regarding last point: But you should open a PPF account and maintain the minimum deposit requirements (only Rs. 100).

    1. bharat shah says:

      i think, minimum yearly subsription required is enhanced to rs. 500/- for ppf a/c.

  3. Ramesh Mangal says:

    Simple Financial Plan.
    1. Keep a core portfolio (for your retirement or equivalent) and a satellite portfolio for shorter term goals.
    2. Core portfolio. 1/2 large cap/large-mid cap funds, 2 mid-small cap/multicap fund/equity oriented balanced fund and 1 ELSS (atleast for 2 years, till the DTC provisions are clear on ELSS). eg. If you invest 1 lakh a year and increase the yearly investment amount by 10% every year and if you calculate the rate of return at 10% (not 12, not 15), you will have about 5.2 crores at the end of 30 years. 🙂
    3. Satellite portfolio for near-term money after 5 years. Start from 40:60 of equity-debt allocation, reduce the allocation to equity by 10% each year. so at the end of 5 years, you will have 100% debt allocation. Use a debt oriented hybrid fund and a dynamic bond fund for this part of your portfolio.
    4. Dont mix the portfolios.
    5. Trying to put money in PPF and NSC at your age and at current interest rates is not advisable as per me.

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