Need advice on Monthly income

POSTED BY Saif ON February 14, 2013 1:49 pm COMMENTS (9)

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Dear Financial experts,

Need you valuable suggestions on the below financial planning.

Few days ago I have met my friend(32yrs old). Due to his health conditions, he stopped working permanently & withdrawn all his savings (Including his PF). Currently he is holding 10Lakhs cash in hand & he wants to invest some where, to get his monthly income of minimum 15K to 16K to run his family. Unfortunately, his parents are senior citizens & also depending on him. I would like to take your valuable suggestions to support him to get monthly income from his current lump sum amount.


SP Pathan

9 replies on this article “Need advice on Monthly income”

  1. Dear Ramesh, it’s the health condition, which has forced him to withdraw all his savings & resigning from his job.



  2. Dear Ramesh, I understand the impact of inflation but the family is solely dependent on this corpus from day one & thus do not has time to invest in Eq. & let it grow. That’s why I popped the question of income for wife also.



    1. Ramesh says:

      He is 32 years old. So, lot of years left (I would assume that).

      Realistically, your other 2 options make sense. 3rd one, especially the locking part is just like ‘kicking the loss’ down the years, which would be a max of 5 years. After that, surely the inflation will pinch a lot.

  3. Dear S P Pathan, please act on 3 fronts simultaneously.

    1. Try to reduce mly expenses – easy to say hard to do
    2. Find a part time job with a lesser income to support the short fall in the main income + if possible arrange job for wife of your friend also
    3. Safety of this 10L Rs. corpus is more important than return. For regular income – invest all the amount into bank FD of 2L*5 FDs for 10Y to lock the high interest rates & receive mly interest from it.



    1. Ramesh says:

      Regarding point 3, what about inflation? 🙁

  4. Dear S P Pathan, can your friend manage a part time job as per his own knowledge to support his income from this corpus?

    Keeping his age in mind, 10L Rs. is nothing for his needs in future years.



    1. SP Pathan says:

      Dear Ashal,

      Our friends group is trying to find a part time job for him with a minimum earning of 4 to 5K per month. Rest he has to manage his monthly income from this 10Lakhs only. He needs minimum 10K from 10lakhs(12% annual interest). Kindly suggest.

      Is that good idea to invest in any companies fixed deposits, which can give at-least 11 to 12% interest ?

      S P Pathan.

  5. There is no reasonable way of earning 15K each month from 10 L corpus even immediately without touching the principle. You need an annual interest of 17% for that.

    Reducing monthly expenses beyond 15 K also seems difficult.

    Other family members have to start earning. He has to see other ways to earn if possible.

    he can opt for a perpetuity. For example lock in 10L in a FD for say 10 years or more at 8.5% to earn half the monthly expenses needed. Rest will have to come from elsewhere.

    taking any kind of risk with this 10L is a bad idea.

  6. Ramesh says:

    Seriously, 15-16k means 1.8-2.0 Lakhs a year and 10L means just 5 years of that without even thinking about inflation.

    No reasonable way.

    He needs to decrease his standard of living. Anything above 50k a year is not sustainable. One cannot generate money out of nowhere. Either live @ 15-16k for 6-7 years and then… OR decrease to 4-5k per month. Then probably we can look how to manage it.

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