want to start my Financial planning

POSTED BY Satish Bachhav ON April 2, 2012 4:54 pm COMMENTS (15)

Hi,
This Satish , As per my details below could you please guide me where I can start my Investment
Age :33
Net salary :45000
PF contribution : 2000
VPF :3300
Term Insurance :40 Lakh, Primium :17000/A(LIC)
EMI :6000/month ,Plot(Land) loan so there is no Tax benefit for this loan.

I want to invest 8000/month in mutual fund for long term 10-15 year-Please advice
Thanks in advance

15 replies on this article “want to start my Financial planning”

  1. Ramprakash says:

    @Satish
    If you go through the forum, you will find that there are recommendations to buy from online portals like fundsindia.com or moneysights.com. The main advantage here is that you dont pay distribution fee.
    Here is the link to discussion of fundsindia-or-moneysights
    http://localhost/jagoforum2/fundsindia-or-moneysights/2922/
    The main advantage here is that you dont pay distribution fee. However the setting up of ECS is slow for SIP compared to dmat.

    Where as if you buy through banks or brokerages (dmat account) there are charges. For eg. icicidirect.com charges 15 or 25 Rupee per SIP and 100 Rs. if u buy in one shot. (+ 12.36% service charges/cess). Dmat accounts have an annual charges of 450-750 Rs. If you invest/trade in shares then you should already be having a dmat account. So if you are fine with the distribution fee they charge, invest via dmat. In my opinion its not worth opening a new dmat account just for buying mutual funds. But with the Rajiv Gandhi Equity Saving Scheme announced in this years budget, I think every one might end up opening a dmat account lured to the tax saving option, provided MFs are not included in RGESS.

    You can online directly buy from AMCs as well. I beleive there is no distribution charges here. hdfcfund.com is very convinient if you are planning to get hdfc funds. Similarly http://www.quantumamc.com is good for quantum funds.
    If you are planning to buy only 1-2 funds and both are from same AMC, it may be good idea to invest it directly online with AMC.
    –..–
    I believe one should not have more than 4-5 MFs in your portfolio.

    Stick to 5 categories untill u r a pro.

    Equity: Large Cap, Large & Mid Cap [Time Horizon considerably higher than 5 years]
    HDFC Top 200
    DSPBR Top 100 Equity Reg
    Franklin India Bluechip

    Equity: Multi Cap [Time Horizon considerably higher than 5 years]
    Quantum Long Term Equity
    HDFC Equity

    Balanced: (Equity Oriented) [Time Horizon around 5 years]
    HDFC Prudence
    HDFC Balanced

    Equity: Tax Planning [Time Horizon 3+ years] (80c benefit) (This category will be redundant the year ELSS are removed from 80c benefit)
    Canara Robeco Equity Tax Saver
    Fidelity Tax Advantage (Needs a relook as L&T recently acquired Fidelity AMC)

    Category 5:
    Dont invest in equity based MFs if your time horizon is less than 3 years.

    These are my 2 cents. My knowledge is limited but am working on it!

  2. Ramprakash says:

    Satish,

    If you are really willing to be disciplined and invest 8k p.m. for the next 10-15 years, then I would suggest you to invest in one fund from each of the following two categories.

    Category Equity: Large Cap, Large & Mid Cap
    HDFC Top 200
    DSPBR Top 100 Equity Reg
    Franklin India Bluechip

    Category Equity: Multi Cap
    Quantum Long Term Equity
    HDFC Equity

    You could split 4k each or 5k for 1st category and 3k for 2nd category based on your own analysis. You can check valueresearchonline.com and http://www.livemint.com/images/Mint_Delhi_Mint_16.pdf to do your analysis.

    1. Satish Bachhav says:

      Thanks vey much Ramprakash for your valuable responce.
      Could you pl suggest that from where I can buy this Fund means from Bank, Fund house or online , which one is best.

      1. Dear Satish, please share more details for yourself. Are you married? size of family, no. of dependents, loan liabilities, current assets & investments, if married, spouse is working or not…………………

        Thanks

        Ashal

        1. Satish Bachhav says:

          Dear Ashal ,
          Thanks for your reply,
          I am married and i have two daughter, I have land loan Rs. 6lakh and 6000 is EMI for 15 years.( this loan is not useful for tax benefit) and wife is not working now.
          Still date my investment is in Land only ,now planning to invest in Mutual funds for long term.
          Also, In month of Aug-2011 I bought LIC Jeevan anand sum assu.21 lakh and i need to pay 105000 installment per year( still date i have paid one premium) but after reading sevral documents from Jagoinvestor , I am not planning to pay next installment, Pl suggest.

          As per my above details please guide me how I can start my Investment.

          Thanks

          Satish

          1. Dear Satish, Keeping in mind your age & family size, My first take ‘ll be to go for a term plan. As your current mly take home salary is 45000 Rs. = 45000*12 = 540000 Rs. yly.

            In my opinion, your term cover should be at least 1 Crore Rs. Reason – Till date there is no major assets or investments as back up for your family. If you are comfortable with the idea of online term plan, please update in your reply.

            Thanks

            Ashal

      2. Ramprakash says:

        Satish

        If you go through the forum, you will find that there are recommendations to buy from online portals like fundsindia.com or moneysights.com. The main advantage here is that you dont pay distribution fee.
        Here is the link to discussion of fundsindia-or-moneysights
        http://localhost/jagoforum2/fundsindia-or-moneysights/2922/
        The main advantage is that you dont pay distribution fee. However the setting up of ECS is slow for SIP as compared to dmat.

        Whereas if you buy through banks or brokerages (dmat account) there are charges. For eg. icicidirect.com charges 15 or 30 Rupees per SIP installment and 100 Rs. if u buy in one shot. (+ 12.36% service charges/cess). Dmat accounts have an annual charges of 450-750 Rs. If you invest/trade in shares then you should already be having a dmat account. So if you are fine with the distribution fee they charge, invest via dmat. In my opinion its not worth opening a new dmat account just for buying mutual funds. But with the Rajiv Gandhi Equity Saving Scheme announced in this year’s budget, I think every one might end up opening a dmat account lured to the tax saving option, provided MFs are not included in RGESS.

        You can online directly buy from AMCs as well. I believe there is no distribution charges here. hdfcfund.com is very convinient if you are planning to get hdfc funds. Similarly http://www.quantumamc.com is good for quantum funds.
        If you are planning to buy only 1-2 funds and both are from same AMC, it may be good idea to invest it directly online with AMC.
        ————————————————————————————-
        I believe one should not have more than 4-5 MFs in your portfolio.

        Stick to 5 categories untill u r a pro.

        Equity: Large Cap, Large & Mid Cap [Time Horizon considerably higher than 5 years]
        HDFC Top 200
        DSPBR Top 100 Equity Reg
        Franklin India Bluechip

        Equity: Multi Cap [Time Horizon considerably higher than 5 years]
        Quantum Long Term Equity
        HDFC Equity

        Balanced: (Equity Oriented) [Time Horizon around 5 years]
        HDFC Prudence
        HDFC Balanced

        Equity: Tax Planning [Time Horizon 3+ years] (80c benefit) (This category will be redundant the year ELSS is removed from 80c benefit)
        Canara Robeco Equity Tax Saver
        Fidelity Tax Advantage (Needs a relook as L&T recently acquired Fidelity AMC)

        Category 5:
        Dont invest in equity based MFs if your time horizon is less than 3 years.

        These are my 2 cents. My knowledge is limited but am working on it!

      3. Ramprakash says:

        Satish
        If you go through the forum, you will find that there are recommendations to buy from online portals like fundsindia.com or moneysights.com. The main advantage here is that you dont pay distribution fee.
        Here is the link to discussion of fundsindia-or-moneysights
        http://localhost/jagoforum2/fundsindia-or-moneysights/2922/
        The main advantage here is that you dont pay distribution fee. However the setting up of ECS is slow for SIP compared to dmat.

        Where as if you buy through banks or brokerages (dmat account) there are charges. For eg. icicidirect.com charges 15 or 25 Rupee per SIP and 100 Rs. if u buy in one shot. (+ 12.36% service charges/cess). Dmat accounts have an annual charges of 450-750 Rs. If you invest/trade in shares then you should already be having a dmat account. So if you are fine with the distribution fee they charge, invest via dmat. In my opinion its not worth opening a new dmat account just for buying mutual funds. But with the Rajiv Gandhi Equity Saving Scheme announced in this years budget, I think every one might end up opening a dmat account lured to the tax saving option, provided MFs are not included in RGESS.

        You can online directly buy from AMCs as well. I beleive there is no distribution charges here. hdfcfund.com is very convinient if you are planning to get hdfc funds. Similarly http://www.quantumamc.com is good for quantum funds.
        If you are planning to buy only 1-2 funds and both are from same AMC, it may be good idea to invest it directly online with AMC.
        ————————————————————————————-
        I believe one should not have more than 4-5 MFs in your portfolio.

        Stick to 5 categories untill u r a pro.

        Equity: Large Cap, Large & Mid Cap [Time Horizon considerably higher than 5 years]
        HDFC Top 200
        DSPBR Top 100 Equity Reg
        Franklin India Bluechip

        Equity: Multi Cap [Time Horizon considerably higher than 5 years]
        Quantum Long Term Equity
        HDFC Equity

        Balanced: (Equity Oriented) [Time Horizon around 5 years]
        HDFC Prudence
        HDFC Balanced

        Equity: Tax Planning [Time Horizon 3+ years] (80c benefit) (This category will be redundant the year ELSS are removed from 80c benefit)
        Canara Robeco Equity Tax Saver
        Fidelity Tax Advantage (Needs a relook as L&T recently acquired Fidelity AMC)

        Category 5:
        Dont invest in equity based MFs if your time horizon is less than 3 years.

        These are my 2 cents. My knowledge is limited but am working on it!

      4. Ramprakash says:

        Satish
        If you go through the forum, you will find that there are recommendations to buy from online portals like fundsindia.com or moneysights.com. The main advantage here is that you dont pay distribution fee.
        Here is the link to discussion of fundsindia-or-moneysights
        http://localhost/jagoforum2/fundsindia-or-moneysights/2922/
        The main advantage here is that you dont pay distribution fee. However the setting up of ECS is slow for SIP compared to dmat.

        Where as if you buy through banks or brokerages (dmat account) there are charges. For eg. icicidirect.com charges 15 or 25 Rupee per SIP and 100 Rs. if u buy in one shot. (+ 12.36% service charges/cess). Dmat accounts have an annual charges of 450-750 Rs. If you invest/trade in shares then you should already be having a dmat account. So if you are fine with the distribution fee they charge, invest via dmat. In my opinion its not worth opening a new dmat account just for buying mutual funds. But with the Rajiv Gandhi Equity Saving Scheme announced in this years budget, I think every one might end up opening a dmat account lured to the tax saving option, provided MFs are not included in RGESS.

        You can online directly buy from AMCs as well. I beleive there is no distribution charges here. hdfcfund.com is very convinient if you are planning to get hdfc funds. Similarly http://www.quantumamc.com is good for quantum funds.
        If you are planning to buy only 1-2 funds and both are from same AMC, it may be good idea to invest it directly online with AMC.

  3. rmohan80@gmail.com says:

    I agree with Ramesh. However, if you want to invest in Mutual funds for 8000, I would suggest the following:

    Rs. 4000 Pm in Franklin India Bluechip
    Rs. 4000 PM in HDFC Balanced Fund.

    However, you’ve not mentioned about your 80C exemptions. This year you can avail tax saving mutual funds too which will be taken off from next year. Maybe you can invest in that too?

  4. Ramesh says:

    Go through the various advices given in this forum. You will certainly benefit from them. To be honest, your query is not a very specific thing, so the general principles will work for you also.

    Ramesh

    1. Satish Bachhav says:

      Thanks Ramesh

      1. eswar20041986 says:

        First I want to classify four answers for your requirement (your investment of 8K per month)

        1. Whether you want to invest this year only?
        or
        2. Continue to contribute upto 5 Years or 60 months?

        3. Whether your investment reached 80 C deduction upto 1 Lakh (or 80 CCF 20000 infra bonds)

        4. Whether you want beyond 1 Lakh Tax saving investment (beyond 80CCF 20000 Infra bonds)

        1. eswar20041986 says:

          I think you already reached or have 1 Lakh Investment for showing 80 C deduction Tax exemption. So your case is for investment beyond 1 lakh also you mentioned for long term 15 years. So your investment classification is 4th point
          So No 4 th option is deduction for Home Loan Principle & Interest. So take a home loan for purchasing Home in sub urbens/outskirts or House Site Plus construction say 1200 Square Feets. You also having option to with draw your PF / VPF for purchase of House Site or House along with parallel to your Home Loan

          1. eswar20041986 says:

            Earlier I didnot saw that you mentioned you are having land/plot for house.
            So, I suggest you to take home loan for construction of House not Full area of your site. Suppose if you have 1200 Square feets area site then you plan for construction to 600 Square feet area only, apply loan for Home loan say 8 lakhs for construction, you can extend or construct full area later after 5 years. Dont take home loan beyond 8 Lakhs, as you may get away from safe zone All the best

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