Can I have more than one SIP, and if yes, can I have it in different asset classes?

Yes you can have any number of SIP's in same Asset class as well as Different Asset Class.

SIPs can be done in any kind of MF scheme. Also, as many SIPs as you want can be done (any number of them for any amount). Invest through SIPs in liquid/ ultra short or short term funds for your short term goals (between 0 to 2 years)

Invest through SIPs in bond funds for your medium term goals (between 2 to 7 years) 

and invest across diversified equity MFs for your long term needs (goals after at least 7 years).

All these goals (short, medium and long) can have multiple SIPs for the purpose of diversification (within an asset class)

You can different SIPs in the same as well as different asset classes

One can have more than one SIP for several reasons. If your SIPs are linked to certain goals, the tenure of goals would dictate the asset classes and number of such goals will dictate the number of SIPs. If the SIPs are for general wealth creation purpose , number of SIPs should be limited based on your asset allocation. It is advisavble to limit the overall numbers to 4-5 SIPs so that they are monitorable and do not lead to over-diversification.

Yes, you can have more than SIP. Also, you can diversify across asset classes like Equity, Debt, Gold etc.

I have just started investing, do you think equity would be ideal for me or should I begin with debt mutual fund?

It all depends on Investment Time Horizon and Your Requirement of the Funds. Sometimes you can invest in both Debt & Equity as well for better Asset Allocation.

Equity investments are suited for long term investing (at least in excess of 7 years) for the goals which would require money after at least 7 years. Also, equity investments are meant for people who understand the volatility involved with this asset class.

Given that you have just started investing, you should first build an emergency fund (equal to 6-8 months of your monthly expenses) by investing the procceds in an ultra short/liquid fund. In addition, if you have any credit card outstanding, it's advisable that you square it off before starting to invest. After these 2 are done (retiring credit card outstanding and building an emergency fund), you should create a medium term fund (for goals occuring in 2 to 7 years) by investing ib corporate bond funds

Asset Allocation is the first step whenever you wish to start investing. Generally , thumb rule is 100 less your age should be the weightage of equities in your portfolio . However, it is advisable that you should seek professional help from an advisor to get a more personalised portfolio structure. What is most important , is that one should start investing as early as possible and have a long term approach to investing.  

This is depending on your financial goal. If your goal falls within 2 years you should not be investing in Equity. Rather Debt is a preferable option. In Debt category you may look for a Liquid fund or Short-Term Fund.

If the goal fall between 3 years to 6 years then go for Hybrid category. In case it is beyond 7 years then only go for Equity fund.

I am a salaried individual and I have worked very hard to build my savings. I am a bit scared to start investing. How do I invest in a safe manner?

It is very good hear you have built a saving. New things looks scary but once you start it is quite simple and easy. The corpus you have created can be parked in liquid funds and then do a STP to equity funds so that you invest without taking too much risk.

You may start with saving in bank in form of Fixed Deposit (FD) and Recurring Deposit (RD). Whatever amount to decide to save in FD & RD, 10% of it you can start investing in Liquid Mutual Fund and Balanced Mutual Fund. Once you are comfortable with the market volatility, you may increase your investment gradually. For better clarity on your risk-taking appetite and financial goals, contact your Financial Advisor/Planner.

To begin with, categorise your goals/needs as per short (0 to 2 years), medium (between 2 to 7 years) and long term (in excess of 7 years). Then prioritize them

And then invest the current and future cashflows and current savings available as per the impending needs.

For  your short term goals invest in short term MF products like ultra short and short term funds. For medium term goals you can invest in bond funds or banking and PSU debt funds and for your long term goals invest across diversified equity MFs. While investing in equity funds it is suggested that you invest in a staggered fashion. if you have monthly surplus, you can initiate a SIP (Systematic Investment Plan) across diversified equity MFs, if you have lumpsum money available, you can start investing in the equity funds by initially putting up the amount available in the respective liquid/ultra short fund and then start a STP (Systematic Transfer Plan) to the equity fund over 6 or 12 installments


The very first idea of investment of a salaried individual is to beat the inflation consistently and sustainably so that savings retain the value to take care of post retirement phase. Equity as an asset class has beaten inflation meaningfully over a long period of time. However, as you seem to be risk averse, a combination of debt funds and balanced funds could be the right option for you. This will give you a safe start to future retirement planning. As you go forward , you should take help of a financial advisor to sail you through in this journey.

What should I consider to ascertain my risk appetite? How do I know if I am a conservative investor or an aggressive investor?

The best way for anyone to know is what will you do when a fund you have invested turns negative. Will you invest more ? Stay invested ? Or redeem ? Risk taking ability also depends on various factors like Age, Income sources, Dependents, Other investment done already. So it depends on each individual.

DIY (Do IT Yourself): you will have to make a note of your own behaviour and sentiment when markets go up or down. And then do analysis come to the conclusion.

Professional: You should contact your Financial Advisor/Planner so that no blind spots are there.

Note: Risk profiling depends on number of factors like demographic, financial goals, what is your relationship with money when you were child, teenager & adult, your current nature income etc.  

To me, risk (what you undertake on your money) is defined by the need, by your future goals. If majority of your goals are short (occuring between 0 to 2 years) and medium term (arising between 2 to 7 years) then for these goals you should invest in liquid/ ultra short term funds (for short term  goals) and for long term goals (due after an excess of 7 years) invest in diversified equity mutual funds.

Based on your investments, if your majority investments (depending on your future needs/goals) are in the short and medium term category, you are a conservative investor. And, if your majority investments are in long term assets you are an aggressive investor.

In order to ascertain your risk appetite, you should consider various situations and your reponse to those situations. e.g. if you are considering an investment where there are chances of losing your principal amount partially and at the same time there is also a likelihood of gaining substantial returns , your comfort of taking this risk defines your risk appetite. Risk appetite is also associated with your income levels, occupation and several other behavioral factors. However, more important is that the investor should clearly know the risks associated before making investment decisions because most investment accidents happen due to limited knowledge of risk return profile of an instrument.

I earn Rs. 50,000 per month. How much should I invest every month for a retirement corpus of Rs. 4 crore?

Assuming the current age as 30 and retirement age is 60 one should start saving Rs 18000/- per month assuming ROI is @ 10%.


Without providing any basic details about you like your age, risk profile, retirement age, etc it will not be possible for me to answer your query


  • Rate of return is 11% pa.
  • Retirement age 58 years

Investment is subject to market risk, please read the document carefully before investing

Current Age

Monthly investment


Rs. 11,500/-


Rs. 20,000/-


Rs. 35,000/-



PV             40,000,000      40,000,000      40,000,000      40,000,000
After (years) 20 25 30 35
FV           154,787,378    217,097,306    304,490,202    427,063,259
inflation 7% 7% 7% 7%
Monthly inv.required                   156,469            115,548              87,123              66,407
Returns of monthly investment done 12% 12% 12% 12%

The chart above details 4 scenarios 

PV (Present Value) means the amount needed if you were retiring today

After refers to the number of years you are retiring after

FV (Future Value) means the amount (extrapolated for those years at an inflation rate of 7%)

Monthly investment required in computed at a compounded returns of 12% per annum. These long term investments should stay invested for at least 7 years

Alternatively, if you require Rs. 4 cr.after certain years ( as mentioned below), the mobthly investment required to be made for that is as under

After (years) 20 25 30 35
FV             40,000,000      40,000,000      40,000,000      40,000,000
inflation 7% 7% 7% 7%
Monthly inv.required                     40,434              21,290              11,445                 6,220
Returns of monthly investment done 12% 12% 12% 12%


We would require more information from you before advising on the quantum of investment required to reach a retirement corpus of 4 crores. However, you will get a clue when I say that if you do an SIP of 25000/- for 27 years then assuming a return of 10%, you might reach this target. However, depending on your expenses, years to retirement and other family obligations you can decide on your SIP amount.   

What are the differences between active and passive investing? And which one is better?

Active investing means there is a Fund Manager & a Fund Management Team that will research the companies and identify the stocks to buy / sell.

In case of passive investing, there is no role played by a fund manager or the team to identify the stocks to buy/sell. Eg. NIFTY Index Fund - where the stocks are bought in such proportion that the portfolio mirrors the NIFTY.

Passively managed funds have lower cost as compared to Actively managed funds. However, this does not necessarily mean that Passively managed funds yield a better return than Actively managed funds. Over a fairly long period - 5 years or more - many actively managed funds have outperformed the Passively managed funds. 



Major difference in active and passive investing is in style of investment and cost of fund management. Active investing involves portfolio creation based on fund manager's style of investing which includes growth or value biases, fundmental analysis of various sectors and stock selection approach. In case of passive investing , stock selection and allocation weightage mirrors the underlying index or benchmark. Active investing involves lot more fund maanger involvement while passive investing involves limited role to be played by fund manager . Therefore, cost of active investing is almost always higher than passive investing.

In nutshell, Active Fund manager endeavours to beat the benchmark in order to create alpha and thereby justify higher expenses.

Active Investing means Fund Manager or Portfolio Manager actively takes decision with the portfolio on Regular Basis to generate the Returns Over and Above the Benchmark to Generate Alpha Returns.

Passive Investing means no active Roles in Portfolio like investing for long term in Index Fund or ETF Etc. Returns Matches with the Benchmark Returns.

Active investing requires adequate and in depth knowledge of markets, instruments and most importantly, the ability to withstand losses and setbacks. 

Mutual fund schemes gives you the cheapest cost option of investing in the market as a passive investor as you get access to very highly qualified, experienced and well paid fund managers to do the active management of your funds while you remain passive. This option allows you not to take the risk of uncertainty off success, gives you time and piece of mind to focus on your core strength, your profession / trade. I would advise passive strategy through investment into MF schemes with proper asset allocation.

Active investing allows the fund manager to choose stocks and their proportion while building a portfolio in line with the objectives and directives of that scheme. Also, the changes happen keeping in mind the fundamental attributes of a stock and fund manager's views on the underlying businesses/industries

Passive management needs the fund manager to follow an index (based on the specific product in question)

Owing to the fact that the former (active management) requires research and due diligence on the securities at hand the expenses are higher than passive management

Active management strategy seems to work better in economies of developing nations where the market information is far from perfect. This leaves room for many opportunities and sweet spots in securities purchase increasing the possibility of superior returns (vs the benchmark/index)

What's the difference between investing in Equity Mutual Funds and ULIPs?

Equity Mutual Funds invest in the shares of the universe mentioned in the offer document (in could be as per market caps- large, mid and/or small; as per investment style- growth, value or blend; as per sectors- diversified or specific sectors like, banking, infrastructure, pharma etc.

ULIPs (unit linked insurance plans) are primarily a two in one. They combine investments and insurance. They provide a risk cover to the extent of the current value of the investments made. 

Mostly the expenses of ULIP are multiple times those of equity MFs. This often makes the Equity MFs superior in performance to ULIPs

What would you suggest me to invest in, if I am planning to study abroad in the next 3 years?

One Should Invest in Debt Instruments for this time Horizon. One Can Look at Quality Debt Portfolio Fund.
A debt fund would be most suitable for such a tenure. Invest in a well managed corporate bond fund and Banking and PSU debt Fund

What and how much should I invest in so that i can buy a house in the next 5 years?

Option 1: Supoose if the Present Cost of a house is Rs 30,00,000/-  and inflation is @8% Future Cost of the house is @ Rs 44,07,984/-  one should invest Rs 60,000/- per month with 8% Return on investment.


Option 2 :  if the Present Cost of a house is Rs 30,00,000/-  and inflation is @8% Future Cost of the house is @ Rs 44,07,984/-. Assuming to go for a bank loanf with Down Payment of Rs 4,07,984/- and taking Loan for Rs 40,00,000/- with Interest rate @8% for Next 20 Years EMI Would be Rs 33458/-.

A debt fund would be most suitable for such a tenure. Invest in a well managed corporate bond fund and Banking and PSU debt Fund

My daughter is 3 years old and I wish to finance her college education when she turns 18. Where should I invest to achieve this goal?

Over a 15 year time horizon, Equity tends to yield a better return than non-equity instruments. However, equity also is highly volatile!!


Therefore, the ideal way to meet this goal is to start a monthly Systematic Plan in an Equity fund or an Equity Hybrid fund. More important is for you to be willing to tolerate high fluctuations and to accept long periods of low returns during the 15-year journey.

The goal is 15 years hence, therefore, one should look at investing in riskier asset classes viz, equity or aggessive baalanced funds. At the same time, one should have sufficient term insurance cover on the earning member to take care of college education and other family requirements in case of any eventuality in the intervening period.


You might have to find out what is today's cost of Particular Course and what is the inflation for that particular course or degree start saving inline with your requirement to match the future expenses. As the Time Horizon is 15 Years you can Invest in Equity Mutual Funds on the 14 Year you might have to Switch your Investment to Debt or Liquid Funds to Avoid any Uncertainties

15 years is a very good time in the current situation in India to invest for a particular goal. You can choose to do systematic investment (SIP) monthly into equity funds (one large cap fund and one mid cap fund). If you do not disturb the same for 15 years and continue the SIP for 180 months, you will have more than desired amount for her education. You can then withdraw the necessary amount for education as and when needed and continue the SIP and hold on t othe remaining amount in the investment. 

Alternatively, if you want to invest a lumpsum amount then, please put the investment into a short term debt fund and put a 12 month Systematic Transfer Plan from this short term fund into 2 equity funds, one large cap and one mid cap. You will get average NAVs of coming 12 months for entry into equity funds and then hold it without disturbing for 14 years. The desired result will be achieved.  

You are better off investing money for her her higher education across well managed diversified mutual funds. Be a long term investor (at least 7 years plus). Invest across large caps (around 75-80%), mid caps (10-15%) and the balance across mid cap Mutual Funds

Also, across each market caps diversify through 2-3 MF schemes.

The best way to invest this corpus is through monthly investing by doing a SIP (Systematic Investment Plan) . Even if you have a lumpsum amount you are better off investing it in a liquid fund and transferring a fixed amount every month in the respective equity Mutual fund across 12 months through a STP (systematic transfer plan)

Can I gift Mutual Funds to my younger sister, who is a minor?

Technically, Mutual Funds are non transferable and therefore, gifting of MF units is not possible. If one wishes to do so, one should sell his/her MF units, transfer funds as gift to sister and she may purchase same MF units in her name. However, if sister is a minor ,then only gurdian can purchase the MF units on behalf of minor.

Investments in minor's name from a third party can be done in child gift mutual fund schemes.
Either of the parents have to be the guardian and payout account has to be of the kid (As per regulatory guidelines, payout can't be into third party account from January 2020) and donor can be anyone in this segment of schemes.
Yes, you can gift equivalent amount of money to your sister who is a minor, but the clubbing of income will remain in your name as far as income tax is concerned. You can then use the money from her bank account which you have gifted, to buy MF units in her name through your parents as guardian till she becomes a major. Once she becomes 18, she can continue to hold the investment in her name for future.

Unlike shares, mutual fund units cannot be simply transferred from one person to another, except on demise of the unit-holder.

The ideal way to do it is to open a minor bank account in your sister's name. You can be the guardian for her.

Also, investments have to be done in your sister's name with you as a guardian.

When she turns into an adult, she will have to apply for a status change (from minor to major) for those investments and they will eventually be in her name.

How to select a good mutual fund to earn maximum returns?

Choose a MF based on it's past long-term data (for more than at least 7 to10 years). Go for a fund which has minimised risk and maximised returns among its peers. We want to identify optimum risk adjusted returns of a fund.

Check whether the investment universe of the fund is as stated in its' objectives, that the processes are in place (and being adhered to) for stock selection and buidling up of the portfolio, and that it is not individual driven. 

Also, accord weightage to a fund house in terms of its operational ease and access to information needed.

Asset allocation between equity, debt and commodities help maximization of return while protecting the downside over a period of time for a portfolio. There may be a short period in which a particular scheme may give highest return, but, while choosing a scheme one should evaluate rolling returns over 5 years and 10 years so that overall portfolio performs better.  

1. Set Your Financial Goals Before Investment

2.Define your Risk and Reward Ratios

3.Check the Fund History and Track Record of the Funds and Fund Manager track record

4. Expense Ratio and Loads

5. Select a Fund which is appropriate for your Time Horizon

6. Take the help of an Advisor

What are the sectors I should consider investing in 2020 and why?

Avoid taking specific sector bets on your own. You are better off in a well managed diversified equity Mutual Fund as the fund managers' increase or decrease their expsoure to various sectors keeping in mind its future sustainability. It's best to trust these exprerts than try and make a decision with limited information/skill set
In equity, one should look at future, 2 to 3 years down the line before deciding a sectors. Retail investors are better advised to buy large cap, mid cap and small cap funds rather than secoral funds as fund managers are better equipped than investors to choose sectors and back them in their respective schemes. Pharma and Technology sectors are looking good for the next decade for India. 
Sector Oriented Schemes Gives High Risk & High Return. In My View Automobiles,Banking, Pharma, Telecom, Cement, Software one can look at it.

What kind of tax benefits can senior citizens avail?

Mutual Funds
By investing in mutual funds, under Section 80C, one can be eligible for tax deductions up to Rs.1.5 lakh per year.

National Pension Scheme (NPS)

The National Pension Scheme can be availed by individuals between the ages of 18 and 65 years. Senior citizens can extend the tenure up to the attainment of 70 years of age as well. Under Section 80C, taxpayers are eligible for deductions up to Rs.1.50 lakh on the investment made towards NPS. Similarly, under Section 80CCD, individuals are also eligible for additional benefits up to Rs.50,000.

The investment made towards the NPS scheme can be directed towards equity bonds or debt bonds, or both depending on the individuals choice. Though NPS does not offer a steady rate, the scheme generates excellent returns and your investment can grow at a faster rate by orienting your NPS towards equity funds.



There are specific tax advantages given by the Governement to senior citizens and various schemes are available for them. However, they are better advised to consult their chartered accountants for the same. 
80C - Mutual Funds Investments Upto Rs150000/- is exempted
80D - medical expenditure can be claimed upto 50000 if they have not taken any health insurance
80TTB - Interest from saving bank account can be allowed as deduction upto 50000 whereas it is 10000 for the non-senior citizen.

What to do if mutual funds are giving negative returns?

Review the risk data and performance numbers (vs index and its peers) of the scheme for the last 7-10 years. If you find inconsistencies in the abovemnetioned data for at least 4-5 quarters, you may want to evaluate exiting the fund. While executing the exit be mindful of the tax implications and exit loads. Be clear that you are not judging in a hurry and remember that the preformance most often is in line with the equity markets benchmark. 

However, it could also be a debt fund during an interest rate hardening cycle or a debt fund having poor credit quality securities which could be losing the money. If its the fomer you could hold it longer till the cycle starts turning or till the accrual returns make good the loss. If latter is the case, please consult your advisor for actionable. 

Every MF Scheme in a portfolio of a client is chosen with a clear objective and has a benchmark return for comparision. For example, in an upward trending growth market, a value oriented scheme may give negative returns. Small cap scheme may give a negative return during the commencement of a long term bull run due to focus on large cap. One needs to always evaluate the overall performance of a portfolio before taking a decision on an individual scheme. A gold fund may give negative return when equity schemes are doing well. Therefore, we have to evaluate the reason for negative returns, compare with benchmark, look at the period for which negative return is happening, before taking a decision to redeem / change / or continue with the scheme.
 Stick to your Basic Investment Plan as Time Horizon of your investment and Risk & Reward Ratio. Please review the Fund in detail and Analyse for what reason it is down if the whole sector or segment is underperforming for any specific reason wait for some time. Take the Help of the Advisor to review and take decision on the Subject.

What is the best way to invest? SIP vs Lumpsum investment in Mutual funds

Both SIP and Lumpsum investments have their respective pros. SIP investment works on the NAV averaging concept and thus when you are in the accumulation phase, in long run your units would go up as well as the value. For lumpsum, it is advisable to invest on a day of huge fall. E.g. 23rd March 2020 - day of lockdown, or 9th November 2016 - demonetization day. If a lumpsum is invested and the markets peak out, there is a high probabilty to see a loss for some time. In long term, you can make up for it.

There is no single 'Best' way to invest in a Mutual Fund. 


SIP in an equity mutual fund is a convenient way to keep investing small amounts making use of the Averaging concept - Buying more units at lower price and lesser units at higher price. For some individuals, SIP may be the only way to invest because they cannot accumulate a Lump Sum to invest.


Lumpsum may be a suitable method to invest for individuals whose income is earned in spurts and who do not have a regular monthly source of income.


The decision to invest through SIP or Lumpsum is largely dependent of an individulas unique circumstances. There is no 'Best' way to invest.

For a salaried individual it is best to invest through SIP as it also helps in a disciplined investment process. Lumpsum investment if more than 30% of your entire investment than it is better to invest in Short term debt and then do systematic transfer plan (STP) to equity funds. This creates a synthethic SIP from lumpsum for you. 

In equity mutual funds the best way to invest is through instalments, i.e. SIP (systematic investments plans) or STPs (systematic transfter plans). STP means investing in a liquid fund and from there transferring money every week/month/quarter to the desired equity Mutual Fund.

For medium term and short term debt funds, one can use the lumpsum or the SIP way.


SIP and lump-sum investments allow investors to benefit from potential wealth creation through mutual funds. Primary difference between SIP and lumpsum methods is the frequency of investment.

SIPs allow you to pump in money into a mutual fund scheme periodically, such as daily, weekly, monthly, quarterly or half-yearly etc. On the other hand, lump-sum investments are a one-time bulk investment in a particular scheme. The minimum investment amount also varies. You can begin investing in SIPs with as little as Rs.500 per month while generally lump-sum investments need at least Rs.1,000.

If you are an investor with a small but regular amount of money available for investment, SIPs can be a more suitable investment option. For investors with a relatively high investment amount and risk tolerance, lump-sum investments may be more beneficial.

What is the right time to invest in a Mutual fund?

Any and every time can be considered as a right time to invest in a mutual fund. One can never time the market. Hence, we should focus on staying the course of our horizon rather than timing the entry. If one invests via SIP route, then averaging of units at periodic intervals helps to accumulate units and benefit from the dips in the markets. If one invests a lumpsum then he can opt for investing when market falls drastically e.g. 23rd March 2020 fall, else invest via STP route, where the units are automatically transferred from liquid or debt fund into equity or hybrid fund. 

There is no specific 'Right' time to invest in Mutual Funds. Anytime is the Right Time. The choice of the type of Mutual Fund will depend on your financial goal, the stock market indicator ratios, previling interest rate and expectations of Interest rate movements in the future.


Therefore, an individuals own goals, risk profile, tenure of investment and economic indicators are the factors to be considered for choosing the right type of Mutual Fund. There is nothing like 'Right' Time to invest in a Mutual Fund.

There is nothing called right timing in mutual funds. You can enter at any time provided that your investment period is 5 to 10 years as far as equity funds are concerned. Equity works only if you have patience for long term investment

The best time to invest is when one has surplus investible surplus. The need/purpose for which this money will be required in future will decide the class of Mutual Funds to invest in. One needs to classify one's goals as short term (0 to 2 years), medium term (2 to 7 years) or long term (7 years plus). Accordingly the money should be deployed in short term debt Mutual Funds, medium term debt Mutual Funds or long term equity Mutual Funds respectively.

It;s always a good time to invest. The critical factor to mind is which asset class to invest in. The asset class to invest in gets driven by one's goals.


When you are investing for a short period of three years, your priority should be to protect the capital. Investors Should Look at Debt Fund for this time horizon. It is always better to Stagger the investment in Equity MF.Anyday is better day for any long term investment.




What is Annualised Returns

Annualised returns measure the amount of growth in the value of your investment on an annual basis. For instance, let’s say that you made an investment of Rs.1 lakh in a MF scheme. In a span of four years, your investment has grown to Rs.1.6 lakh. In this case, your absolute return is 60%, but your annualised return is 12.47% because of the compounding effect. Compounding can do wonders to your money. 12% annualized return can double your money in 6 years and 15% annualized return can double your money in 5 years.

It is the amount of profit investor has earned in a particular year. For example if investor has invested Rs 1 lakh in 1 Jan 2020 and the final value of his investment is Rs 1.2 lakh in 31 Dec 2020. Then he earned an annualized return of 20% in year 2020. 

In simple terms if an investment has made a total return of 18% over 18 months (one and half year) then the annualised return for this investment will be calculated as 12% (not getting into compounding rate). 

Annualised returns refer to per annum compounded rate of return on investments

An annualized total return is the geometric average amount of money earned by an investment each year over a given time period. The annualized return formula is calculated as a geometric average to show what an investor would earn over a period of time if the annual return was compounded. An annualized total return provides only a snapshot of an investment's performance and does not give investors any indication of its volatility or price fluctuations.

Annualized Return

Time Taken to double money


14 years 2 months


9 years 0 months


7 years 3 months


6 years 1 months


4 years 11 months


3 years 9 months


3 years 1 month


Is there any Tax on Mutual funds?

Yes Taxes are applicable as mentioned below.

Dividend Income on equity investment taxable at appropriate tax bracket of Individual/HUF/NRI/Corporate.

Capital Gain Tax :

Long Term Capital Gains units held for more than 12 months.

Equity Oriented Schemes Individual/HUF/NRI/Corporate is at 10.4%(including Cess).

Other than Equity oriented schemes units held for more than 36 months. Individual/HUF/Corporate is at 20.8% (including Cess). 

NRI In case of Listed is at 20.8% and 10.4% in case of unlisted.

Why should one invest in mutual funds

Whether it is investing in Mutual Funds or in any other instrument, the primary objective is to allow your money to work for you so that it can help you achieve your Financial Goals.


Mutual funds offer a full spectrum of options for immediate term or for short term and for long term investments. In addition, Mutual Funds are sometimes more tax efficient. Most importantly, mutual funds offer the benefits of diversification even for small size investments.


It is always advisable to first have clear goals and then shortlist the instruments to evaluate the suitability of each instrument to meet your goals.

Mutual fund schemes are by far, the cheapest vehicle for retail investors to participate in corporate growth in India, as one gets access to a very qualified and highly paid, experienced fund management team to assist in the process of decision making. It becomes even more lucrative, if one is looking at investing in growth through equity mutual fund schemes.  

Although in the current inflation is moderate, we can’t overlook India’s history of high inflation rates. Equity Mutual funds are among the few asset classes that can provide good real rate of return i..e return over and above inflation rate. Real rate of return has been poor in fixed income products like Fixed Deposits etc, thereby significantly impacting the purchasing power of investors.

In short, you should invest in Equity Mutual funds to retire with a significantly better corpus, although the investment outlook must be long term.

For generating market linked (applies for both equity and debt markets) and for ensuring that the portfolio has liquidity. Also debt based MFs are superior to FDs in terms of taxation
For Better Divercification and Good Returns and Tax effecient and flexiblity. 
  1. Built-in Diversification
  2. Capital Appreciation
  3. Tax Planning
  4. Tax Efficient
  5. Managed by Professionals
  6. High Liquidity
  7. Beats Inflation
  8. Wide Range of Funds to Choose 


Can expenses get you an income tax exemption?

The income tax law allows an employee to claim a tax free reimbursement of expenses incurred. An employee can claim reimbursement of the actual bill amount paid or amount provided in the salary package, whichever is lower.

For ex.Employees incur expenses on books, newspapers, periodicals, journals and so on. The income tax law allows an employee to claim a tax free reimbursement of the expenses incurred.

An employer may provide you with meal coupons such as sodexo. Such food coupons are taxable as perquisite in the hands of the employee. However, such meal coupons are tax exempt up to Rs 50 per meal. A calculation based on 22 working days and 2 meals a day. 

In case of individuals, only certain specified expenses like Premium paid on Life Insurance or Tuition Fee for school going children are allowed for tax exemption u/s 80C upto a combined limit of Rs. 1.50 lakhs per year. Apart from this, premiums paid on health insurance for self and dependent parents also qualify for tax exemption upto specified limits.

Other expenses like general living expenses on food, utilities, entertainment, travel, etc. are not allowed for income tax exemption in case of individuals


There are 5 heads of Income in Income tax laws, in which business or profession and other source of income has scope to show expenses relating to the same. In case of house property flat 30% standard deduction is available and in case of Capital gain, improvement expenses on such property generating capital gain also eligible to consider for reduction from sale consideration.
There are 5 heads of Income in Income tax laws, in which business or profession and other source of income has scope to show expenses relating to the same. In case of house property flat 30% standard deduction is available and in case of Capital gain, improvement expenses on such property generating capital gain also eligible to consider for reduction from sale consideration.

Should i time the market while investing lumpsum?

The strategy of market timing becomes worse when emotional reactions get mixed with it. Timing the market is very vulnerable to the handful of good days and bad days in the market. Over a period of 10-15 years, there will be days when the markets will either spurt sharply or correct sharply. In the process of timing the market if you miss out on these good days or if you happen to buy on the bad days, your timing concept can grossly underperform. This is what actually happens when you try to time the market.
we need to understand the difference between time and timing. To understand this difference one needs to look at the difference between speculation and investing. Speculation is trying to take a bet on the future direction of the market and positioning your trades accordingly. On the other hand, investing is all about focusing on the quality of the asset and holding on to it for the longer term. That is the fundamental difference between timing the market and time in the market. When you try timing the market you are effectively speculating on the market direction. So it's not advisable to time the market while investing lumpsum, if you are investing for a long term of above 5-7 years.
Timing the market is next to impossible. So we should focus more on the investment goal and the time horizon, rather than the timing of investment. If the horizon is of 5+ years, the lumpsum can be invested into equity fund using the STP route. Some drastic dips in the markets (such as 23rd March 2020 fall) can also be used as entry points. If the horizon is between 3-5 years, a hybrid fund would be ideal option. For duration of upto 1 year, ultra short duration funds would be better suited. If the horizon is upto 1.5 years, short term debt mutual funds would be ideal, with longer duration funds for period upto 3 years.

Timing the equity market seems simple in theory but tough in practice, esp for Mutual Funds because, for the day you choose to invest, the NAV gets decided by the closing price of the stocks (as part of MF schemes holdings) at 3.30 pm and the cut-off time to submit once purchase in equity MFs is 3 pm. Changes on markets levels can happen in the last half an hour also. 

Furthermore, our emotions pose a huge obstacle to our buying decision. The best way to invest in equity markets when you have lumpsum money is by putting in the respective liquid/low duration debt mutual fund and setting up a STP (Systematic Transfer Plan) for 12 months towards the desired equity Fund. This way the money eventally gets invested in equity MFs over an year providing rupee cost averaging. And, the lumpsum money invested in liquid/low duration funds also generates returns on the depleting (since the money keeps getting moved to equity fundsin 12 instalments) balance 

If you are investing with a long term time horizon then timing the market is not a factor. But we always suggest to enter in staggered manner either through SIP or STP method.

I want to invest for my daughter's wedding which is in 10 years. In which fund category should i invest?

Since you have 10 years to create a corpus, you should look at equity mutual funds. A good diveresified flexi cap shaould be an ideal choice here. If you are investing a lumpsum, you may consider to hold it for 8 years and then slowly move to debt instruments to protect your profit as your goal nears. If you considering investment via SIP route, you should do it for next 8 years, then use STP route to move your accumulated corpus to debt.

I am a Masters student. I have a FD of 50000. I also have monthly saving of 2000-3000 from my stipend. I want to invest my savings in both forms one time investment and recurring investment. What are the best options for me?

You can consider investing the lumpsum of 50000 into a debt fund with a very short duration. From there you can start an STP i.e. systematic transfer plan of 5000 on a monthly basis, into an equity fund. This would give you a comfort of making a steady monthly investment for a period of 10 months, thus catering to any market volatility. Along with this, you can invest your 2000-3000 into an equity fund via SIP on a monthly basis. This SIP should be into a flexi cap fund to better your diversification.  

What's the difference between mutual funds and shares?

Shares are where once bought, the shareholder effectively becomes an owner of the business of that listed entity. It is a mechanism to buy and own the stocks of a company and then participate in the sharing of business profits and dividends. Mutual funds are schemes which are managed by fund managers, who have a pool of money where investors invest. The fund manager uses this money to buy shares of various listed companies. IN this way, the investors indirectly hold the shares of the companies via mutual funds.

I'm 22 and from India and have just started my first job. Where should I start investing to get good returns after 17 years?

First and foremost, a good thing is you are starting early. You should consider investing into equity funds via SIP route. Here you can choose a monthly investment option and you can consider a comfortable amount to start with. You should consider to top-up your SIP every year to make sure you accumulate higher units during your horizon of 17 years. Since you are a beginner, you should look at index funds, large cap funds or even flexi-cap funds.

Which is the best way of investing in mutual funds via SIP or Lumpsum?

Both SIP and lump-sum investments allow investors to benefit from potential wealth creation through mutual funds if you remain invested for a sufficiently long time. However, the primary difference between SIP and lumpsum methods is the frequency of investment.SIP allow you to pump in money into a mutual fund scheme periodically, such as daily, weekly, monthly, quarterly or half-yearly etc. On the other hand, lump-sum investments are a one-time bulk investment in a particular scheme. The minimum investment amount also varies. You can begin investing in SIPs with as little as Rs.500 per month while generally lump-sum investments need at least Rs.1,000.If you are an investor with a small but regular amount of money available for investment, SIPs can be a more suitable investment option. For investors with a relatively high investment amount and risk tolerance, lump-sum investments may be more beneficial.

You can invest either Lumpsum or via SIP in a mutual fund. SIP ensures discipline in investment since you invest a certain amount each month on a fixed date. It helps to average out the cost of investment and brings discipline in the investment process. Since we cannot time the market, SIP ensures we invest a small fixed amount over a period of time. 

This however does not mean that we should not do a lumpsum investment. Incase we receive a lumpsum amount like a bonus or an inheritance etc, then we can invest it as a lumpsum as well depending on the market conditions or incase we do not want to time the market, we can invest the lumpsum in a liquid fund and from there we can do an STP into an equity fund over a period of say 3-6 months.


Both SIPs and lumpsums have their respective benefits while we invest into equity asset. SIP is a more disciplined way to invest monthly or periodically into a fund for a tenure of your choice. This helps in averaging out the pricing of the accumulated units, thus taking full advantage of the market volatility. Also, since the contribution is usually on a monthly basis, it ensures your investment priority is taken care of without much pressure on your monthly outflows. In case of lumpsum investment, timing can result in delay of seeing handsome returns. Let me help you with an example. If you invest say INR 1 Lac when Nifty is at an all time high and let us assume the market peaks out. Then we would see our lumpsum valuation erode to a certain extent till there is a reversal in the market to reach newer highs. In an opposite situation, if a lumpsum is invested on a huge market fall (say 23rd March 2020) and markets reverse thereafter, the returns are much better and faster. In a long run though, a lumpsum can give you good returns. Another alternative mode for lumpsum is via STP route. This is Sytematic Transfer Plan (STP). Here we can invest the lumpsum into a liquid or an ultra short duration fund, then on a weekly or periodic basis, STP autmatically moves it into an equity fund. This is a combination of lumpsum and SIP to help you take advantage of both the modes effectively.

I want to invest in mutual fund for tax savings and good returns. I do not have any idea about mutual funds and investment. How can I get started?

Tax planning should be a part of every individual’s financial planning. Equity Linked Savings Schemes or ELSS funds are equity mutual fund schemes which are eligible for tax savings under Section 80C of Income Tax Act 1961 in the old income tax regime. ELSS funds have a lock-in period of 3 years. You can invest in ELSS either in lump sum or through Systematic Investment Plans. If you are investing in ELSS through SIP, each SIP instalment will be locked in for 3 years. Investing in ELSS from your regular savings through SIP can keep you disciplined in tax planning and ensure maximum tax savings as well as wealth creation in the long term through the power of compounding.
To save taxes and create long term wealth, you can invest in an Equity Linked Saving Scheme (ELSS). ELSS schemes have provided better returns in the past as compared to other traditional tax saving instruments. To start investing in mutual funds, you first need to complete a one time KYC process, and then submit the application form. This can be done both online n offline and you can seek the help of an investment advisor or a mutual fund sdistributor for the same.
The tax saving mutual funds are also called as Equity Linked Savings Schemes (ELSS). These schemes are the one where there is a 3 year lock-in period. You can opt for an SIP to invest say monthly into a scheme to ensure you 80C section takes care of the available exemption of INR 1.5 lacs. Another option is to invest using a lumpsum. You can invest this lumpsum anytime till 31st March of the financial year for which you need to declare 80C investment. Since, you are a beginner, you will just have to get your KYC registered and then you can invest into any available ELSS funds. 

I am 28 years old. I want to start a SIP with a mutual fund. What should I do for targeting 1 crore for the next 25 years?

Starting at 28 is a great start! Congratulations!!
It is very easy & simple to reach Rs 1 crore in 25 years. What we do for our clients is this: We construct a very good MF portfolio for them and ask them to start Monthly SIP in about 5 top-rated MFs. The progress is monitored periodically, and wealth grows in a very systematic manner.
To accumulate Rs 1 crore, you need to Invest only Rs 4000 per month for 25 years.
You should be willing to remain invested for minimum 5-6 years in Very Good MFs, for your invested amount to double. (It should be noted that investment in Bank FDs/RDs takes about 10-15 years to double your invested amount at the current interest levels.
For making investments in Mutual Funds, you don’t have to open a Demat account by paying fees. You can invest in MFs by opening a FREE ‘MF Investment Account’.
Follow advice of mine or of any equally good investment consultant before you make any MF investments to avoid making major investment mistakes.
Never make investment decisions based on the past performance, your gut feel or on a friend’s/relative’s/colleague’s advice. Such decisions may lead to loss making investments.
You are still having good time with you. SIP is always a good option of investment due to its averaging nature which helps to cater to market volatility as well as mitigates risks in long run. You should start SIP amounting to about INR 6500/- for a period of 25 years to create a corpus of 1 crore. Another option to reach 1 crore is to start SIP of INR 3000/- with an annual SIP top-up of INR 500. (Assumption - 11% compunded returns per annum).

I have a financial plan in place already. Should I allocate funds to my tax-saver investments separately?

Tax-planning is a part of financial planning. Align your tax-saver investments with your goals and overall strategy.

Tax planning should be part of your overall investment strategy. You will make these investments every year, over your entire working life. So, you must manage it in such a way that it helps build in building a large corpus over the long term.Starting early will help you achieve this.

ELSS is a good choice, especially for the young and millennials just starting out on their investment journey. But if you already have a well-established portfolio, then an ELSS may not be necessary.

It is ideal to have tax savings as part of your financial plan. In case, you have not kept it part of it, you can consider the same in the new financial year from April 2021 onwards. As you are effectively, left with 1 month now for your tax saving investments, you can consider doing lumpsum now. From April onwards, you can consider starting an SIP into ELSS fund to ensure you stick to a disciplined approach as well as your tax savings are taken care of. 
If your income is above the taxable threshold, then it is a good idea to invest in an ELSS scheme to save taxes. Investing in an ELSS scheme will not only help you to save taxes, but also in long term wealth creation, since an ELSS scheme primarily is a diversified equity mutual fund which gives better returns that other traditional 80C investment instruments.

Why do I need an emergency fund when I can access money easily through saving accounts?

An Emergency Fund should be a separate fund for some unforeseen event like loss of job etc. roughly 3-9 months of expenses depending on your risk profile, no.of dependants etc if it is mixed in the common SB A/c it maybe used up and availabilty may not be there when actually needed or maybe insufficient .
An emergency fund refers to the money which you have kept aside to cover any financial or unexpected expenses. An emergency fund of at least 6-12 months expenses provides you with peace of mind during the disrupting situation. It also allows you to focus more on the problem which would thereby not be possible had you not kept enough of emergency funds. If emergency kept in savings account, then one tends to use it for normal expenses. So it's wise to park emergency funds in liquid funds instead of savings account.
Accessing money directly through savings account is definitely very easy. However, having a dedicated corpus to fund any uncertainty or emergency is always desired. There are a few advantages to this: 1. Having emergency corpus say in a liquid or overnight fund is a very reliable option, 2. It creates a discipline to build this corpus, 3. Unnecessary expenses are absolutely curtailed which otherwise can be high if the money is in the bank, 4. Sudden need of fund doesnt impact the balance in the bank account., and finally, 5. Returns are generally little higher than what a savings account interest offers.

Why Retirement Planning?

It is very important to plan retirement because during retirement one doesnt have a regular working source of income. Hence, to ensure that all the then needs are met without any impact on the lifestyle, it is necessary to have regular inflows of income. Retirement planning helps in a futuristic approach towards creating and managing a corpus that can be used for meeting basic needs, luxury needs, beat inflation, and leave behind a legacy for next generations.
It is very important to plan retirement because during retirement one doesnt have a regular working source of income. Hence, to ensure that all the then needs are met without any impact on the lifestyle, it is necessary to have regular inflows of income. Retirement planning helps in a futuristic approach towards creating and managing a corpus that can be used for meeting basic needs, luxury needs, beat inflation, and leave behind a legacy for next generations.
It is very important to plan retirement because during retirement one doesnt have a regular working source of income. Hence, to ensure that all the then needs are met without any impact on the lifestyle, it is necessary to have regular inflows of income. Retirement planning helps in a futuristic approach towards creating and managing a corpus that can be used for meeting basic needs, luxury needs, beat inflation, and leave behind a legacy for next generations.
It is very important to plan retirement because during retirement one doesnt have a regular working source of income. Hence, to ensure that all the then needs are met without any impact on the lifestyle, it is necessary to have regular inflows of income. Retirement planning helps in a futuristic approach towards creating and managing a corpus that can be used for meeting basic needs, luxury needs, beat inflation, and leave behind a legacy for next generations.
Retirement planning is an essential part of financial planning. An increase in average life expectancy increases the need for retirement planning. Planning  for retirement not only ensures an additional source of income but also helps in dealing with medical emergencies, fulfil life aspirations and be financially independent. Unfortunately, many investors do not give high priority to retirement planning or start their retirement planning late in life, which may put their financial independence at risk after retirement. 

What is the best investment option for young working females?

I would suggest keeping investments simple so that you understand the same as well as persist with the strategy over long periods of time for wealth build-up. This strategy could use some elements stated below, though there needs to be specific customisation to your unique needs / aspirations and goals.


  • As a young person, the preferred investment option could be equity as that would give you best compounding benefits over long periods of time. You could choose diversified equity funds to start with and fine tune the same as you develop an understanding of various nuances of equity investing.
  • As a female, you would need to assess both your short term goals (e.g. investment needed for skill upgradation) and long term goals (e.g. Retirement / financial independence). Your investments should align to these goals
  • Creating an emergency corpus is vital to not derail your goal based investments over the long run
  • As you have recently started working, you should consider starting a monthly Systematic Investment Plan ( SIP ) . In a SIP, a fixed amount of money ( which you mandate ) will get deducted from your account on a fixed date and go towards this investment and is the best mode for regular investing.

What is ELSS? I have heard its for Tax saving? I am a housewife and aged 30 and want to invest? can i invest in ELSS.

I would always encourage housewives to save and invest. There are some investments which additionally gives tax savings of upto Rs. 150,000 (under Section 80C of the Income Tax Act, 1961) making it doubly sweet and ELSS (Equity Linked Savings Scheme) is one of them. These are equity oriented mutual funds and anyone can invest in ELSS. An added advantage of ELSS is that these have a lock in period of only 3 years (much lower as compared to other tax savings schemes such as PPF etc.). However, this also necessitates that you only invest that portion which you don’t intend to withdraw over the next 3+ years from the date of investment.

At what age should someone start investing for a Child?

Investments always work wonders when given sufficient time. Ideally one should start investing for a child as soon as child is born. Since this gives the maximum possible time for your investments to grow, the amount of investment needed is significantly lesser. An SIP of Rs. 10,000 per month in equity funds will then be enough to take care of your child's higher education
You could start planning when you plan the baby ot at birth.
You can start investing for the child as soon as the child is born. You can open a bank account on child's name and whatever gift funds that the child receives can be deposited in the bank and then invested in the mutual funds. The best part of starting early is that you get the benefit of compounding over the years and these funds can be utilised for Child's education and marriage.
The right time to start investing for any goal is NOW. You should consult a financial advisor to help you plan and save for your child's education expenses and his/her future. The advisor can help you derive the monthly amount you need to start investing to meet this goal and can provide you suitable investment options for the same.

There is no right age to start investing for a child. However, the earlier one starts investing, the more you give the investments the chance to compound (the essence of investing) and become a meaningful value in the later stages of a child’s life.

We all aspire to give the best possible life to our children. There are life stages which are inevitable for a child – education (school), college (graduation and possibly post-graduation), marriage, starting professional life etc. and each of these stages cost money. So, if we start saving early towards these goals or any other unique goals which the child / parent may have, the chances of us accumulating enough towards fulfilling these goals comfortably increases proportionately. So, then one can spend time on planning how to meet the goal rather than getting distracted by how to fund the same in addition to the core question of how to meet the goal.

Gold ETf vs Physical Gold. which option is better

Out of "Gold ETF or Physical Gold", ETF option is many times better if the objective is for investing. It provides the following benefits over the Physical Gold:

1) The Custody worries as ETFs are only reflected in the Electronic form

2) The Liquidity at full prevailing Prices without any other Taxes or levies - in comparisons with Physical Gold

3) Ease in Liquidity.

4) LTCG: If you sell after holding for 36 months, you generate long-term capital gains. These gains are taxed at 20% (plus any cess) with indexation



ETF is better than physical gold has the transaction costs are much lower and it is safer storage cost is also much lower otherwise you can also look at sovereign gold bonds which are issued by RBI monthly on a monthly basis and they even pay a rate of interest of 2.5% on it
Gold ETF is definitely a better option than holding physical hold. Unlike in physical gold, there is no storage cost, no liquidity concerns, no purity issues or making charges in case of Gold ETF. Since Gold ETFs are listed on the exchange, you can buy or sell any time.

Gold provides a good diversification to the regular asset classes (such as Equity / Debt etc.) and is often uncorrelated to them. So, the question is how does one invest in the same.

Physical Gold provides the diversification above and you have full control as well as physical possession of the same. However, you run with some unique risks – is the Gold which you are holding pure or does it have adulteration ? Where do you store it securely as there is risk of theft = and you possibly would need a locker ? How do you access the Gold if you are traveling to some other city  etc. and therefore can become illiquid from time to time.

Gold ETF tries to provide the same diversification into Gold with convenience through financialization of Physical Gold. Physical Gold (of defined purity) is held centrally by an Asset Management Company and against the same units are issued which are traded on the Exchange. So without holding the physical gold, one can buy units of Gold (so no purity risk / security risk / need for locker etc.) and these are exchange traded (so no liquidity risk and accessible from anywhere).

So one can choose physical Gold or Gold ETF depending on what convenience once is looking for. For a retail investor, a Gold ETF would be superior for the convenience it offers.

What is the difference between investing in a mutual fund and in an Initial public offering of a company?

"Investing in Mutual Fund" means indirectly Investing in Bunch of Equities (scheme based) on the specific Asset Allocation of the Mutual Funds. Such stocks are available to invest through stock exchanges in secondasry markets or even in initial public offers based on the Mutual Funds Scheme features. An Investor can simply invest under the suitable schemes of the Mutual Funds and thgrough the Fund manager based on the scheme objective the investments are made on Net Asset Value basis but "Investing in Initial Public offer of a company" means the specific program of the company to bring in the sale of its equity through Public offer under strict norms stipulated by SEBI and Investors can participate in the same based on their categories like Individual or Corporate or others...and as per the rules as specified by the IPO Mandate. It briefly means that this is an offer made by the company directly to the investors at specific Minimum and Maximum Price band.

A mutual fund is a pool of resources invested and managed by experts. Thus an investor gets access to a host of different companies by investing in a mutual fund.

An intial public offering of a company is the first time a company gives investors an option to invest in their business. 

A mutual fund is a basket of different investment instruments (like shares or bonds) professionally managed by a fund manager. Whereas an IPO or an Initial Public offer is a primary offer for sale of an individuals companies stock to the public. 

Investing in a mutual fund and an Initial Public Offer (IPO) are very different. Mutual funds could be equity or debt and in the case of equity mutual funds the only similarity is that the underlying is an equity product.

In the case of an equity mutual fund, the underlying portfolio is a basket of equity shares and possibly some cash (to manage liquidity) as per the mandate of the mutual fund. So, the risks are diversified across many companies. Even in the case of a New Fund Offer (NFO) of a mutual fund, the underlying portfolio consists of a basket of shares of companies (existing) aligned to the NFO strategy (only thing which is new).

In the case of a IPO, it corresponds to the first public offer for a new company , so in that sense it is concentrated to just 1 company and that too which has no track record of the public offer. This is not to say that investing in an IPO is a good strategy or not for that would depend on the potential and the offer price of the IPO.

In short the risk/ return profile of an IPO is very distinct and different from an NFO of an equity mutual fund. And the difference only grows if you consider a regular running existing mutual fund as the question alludes to.

I am 25 and from India and have just started my first job. where should i start investing to get good returns for my marriage which is in 4 years.

  1. FIirst set financial goal .
  2. Decide marriage fund targeted expenses as per your aspirations .
  3. Do budgeting then as per the disposable income start systematic investement plan.
  4. In time intervals keep on adding top up investements and do periodic reviews.

As you are mentioning you are just starting to invest, mostly you should first be looking at building your emergency fund corpus and insurance planning (Term Life Insurance, Personal Accident Insurance and Health Insurance). If you’ve already taken care of those and are ready to start investing towards other goals, specifically this goal of providing for marriage expenses (which is 4 years from now), you may consider investing in schemes under Conservative Hybrid and Balanced Advantage Categories. These schemes provide superior risk adjusted returns over medium term horizon.

Financial Planning is all about goal based investments. It is very heartening to note that you have started planning for your marriage expenses as soon as you have started earning. This gives you the best chance for meeting this goal (and future goals) in a planned manner.

Equity gives the highest long term compounded growth rate and therefore on a generic basis would recommend investing regularly into the same at this stage of your life journey and especially so as your goal is 4 year away (reasonable time horizon to let equities compound). You could use Systematic Investment Plans (SIPs) to add to your investment kitty month on month. Within equity, you may wish to diversify your portfolio across Large Cap & Mid Cap as you start learning about the world of investments and fine tune the same based on your preferences as you understand them better. You could take help of a financial advisor whom you trust because aligning your investments to your risk profile is crucial for long term success.

They key towards a smother experience of using the funds when you need, as you reach closer to your goal date (4 years from now), you would need to continue to book profits from equity and put in less volatile asset classes – so that you are not dependent on market movement on the day you need the funds.

Considering you wil require the funds in the next 4 years to meet your marriage expenses, you can start investing via monthly SIP in Hybrid funds and Dynamic Asset allocation funds.

Considering that you have a short to medium time horizon for saving for this goal, you should look at a mix of short term debt funds and dynamic asset allocation funds.

The short term debt funds with a good AAA portfolio would help to generate steady returns with low volatility. While choosing debt funds, due attention should be given to the quality of portfolio in order to avoid facing difficult situations on account of low quality credit issuers.

Dynamic asset allocation funds change allocation between equity and debt based on equity index levels. As the equity indices rise, these funds reduce the equity allocation and vice-versa. Therefore, the dynamic asset allocation funds would help lower volatility in the capital invested and at the same time generate better returns than pure short term debt funds. The main mandate of these funds is to rebalance asset allocation on a monthly basis so that investors can benefit even in the situation of volatile equity market movement. Therefore, while choosing funds in this category one should try to see if the fund manager has displayed the ability to actively rebalance the asset allocation in different market environments

What happens if I miss SIP instalment in India?

As per the new rules of NAV applicability, units will be allotted on all purchase transactions, including SIPs, as per the NAV of the date when money is available in fund's bank account for utilization (before cut-off time). So, in case you miss a SIP instalment, you'll not get units for the said instalment, as the amount wouldn't reach Fund/ Scheme's Bank Account. MF/AMC won't levy any penalty whatsoever for the missed SIP Instalment. However, if SIP debit in the bank account was missed due to insufficient balance in the account, then your bank may levy penal charges for ECS/ACH return / bounce.

If you miss your SIP installments twice in a row and third time also if it does not go through, then your SIP gets cancelled and you will have to again register the SIP.

This might invite bank penalties too. So it is better to pause the SIP in case of inadequate funds and restart once the funds are there.

Incase you miss one instalment, there is no problem. The next SIP will automatically still be debited next month on the due date. Only if you miss 3 SIP installments in continuity, in that case the SIP will cease. 

SIP (or Systematic Investment Plan) is a method of investing in a regular manner. However, all such systems are meant for supporting investments and not becoming a burden. However, our recommendation is to continue the SIP unless absolutely necessary as the regular investments are often an integral part of financial plans.

For exceptional circumstances, when one is not in a position to make the regular investments, the SIP can be stopped. There are some instances where this is for a short period, in which case a facility of SIP Pause offered by many AMCs can be used. SIPs can then simply be resumed when the period is over.

In the worst case scenario where you miss a SIP instalment in an unplanned manner, then also there is nothing to worry (other than the investment plan taking a hit). Most AMCs allow up to 3 misses for the SIP to stop. So, just missing one instalment may mean that you need to do nothing and the SIP would automatically try again and go through the next instalment if funds are available in the linked savings account. However, if because of repeated SIP misses, the SIP stops then one would need to re-register the SIP for it to start again.


In India, if an investor misses one SIP instalment, then it is not an issue. If three consecutive SIP instalments are missed then the SIP is automatically cancelled. However, if the instalment is missed on account of insufficient balance, the banks have now started levying bank charges for such transactions.

I am 47 years old and I want to retire early. I have approximately 2 crores in equities, debt, gold and liquid assets. I also own a house valued at > 2 crores in Mumbai. My liabilities currently are zero. My family comprises wife and daughter. My parents are self sufficient financially and are not dependent on me. My expenses currently are about 12 lakhs PA. Please advise when would be an ideal time for me to retire?

With your current corpus of Rs. 2 Crores accumulated in various assets, you should be able to retire by the age of 50. As regards the value of your house, that should ideally not be taken into account since the house will be used for self occupation and hence caannot form part of the retirement plannnig. When you do retire, make sure that you invest atleast some portion (around 25-30%) of your corpus in equity linked instruments in order to take care of the inflation component post retirement. The investments in fixed income instruments should be planned in a manner where they generate regular cahslfow to take care of your monthly expenses. The equity linked instruments can be used later (after 5 years or so) when you have the need for additional cash flow by taking systematic withdrawals. Till then the growth in this corpus will help take care of inflation in expenses later on.
  • The data  is incomplete and insufficient .For eg . Portfolio YoY returns , Daughter age , education fund provisions , marriage fund provision , your current retirement kitty and lifepartner age to calculate suitable retirement age .
  • When we calculate retirement corupus requirement Self consumption expenses / taxes etc  related data is also vimp.
  • Still we assume if portfolio invested @10% , inflation@6% ,and 60% Of current expenses  PA  post retirement; you can take  a retirement call within 3 years ! (tentatively)
  • Disclaimer - The advise is based upon limited information and assumptions.

Based on the information you provided, it seems you have a teen ager daughter. Assuming you don’t have any other financial goals, your daughter’s graduation, marriage and your retirement income seem to be the goals due to be achieved. Due to lack of clear information about the exact age of your daughter, her career aspirations and the kind of marriage you have in mind for her, it is not possible to do exact estimations (calculations) with regards to those goals. However, setting aside 50 Lakhs for those goals from your 2 Crore Corpus may be sufficient. Remaining 1.5 Cr. may be considered to be available for your retirement income goal. The value of the present own house, which is self-occupied (?) may not be considered towards any goal. Further, you haven’t specified how much more you’ll be able to save & invest monthly, towards your retirement goal from now, until you retire.


Assuming the life expectancy till age 85 and you wish to get retirement income equal to your present annual expenses i.e., 1L per month, and you will be able to save Rs.1 L per month for retirement goal from now till retirement, and some other sets of assumption about inflation and rates of return on investment you may be able to retire at age 54. You may build your retirement corpus using Equity and Equity Oriented Hybrid Mutual Funds and arrange retirement income cashflow using Systematic Withdrawal Plans from Debt and Conservative Hybrid Funds.


A Google Spreadsheet calculator for you is made available at which you can download as .xlsx and get to know what is optimum retirement age by changing different variables. Further, as can be seen in the above answer, there are many things that require your inputs. And assumptions have to be fine tuned by experts in a way that suits your situation (for example rate of return on investment). As this is a critical decision of your life, please consult an expert before you decide and also to put in place an investment and withdrawal plan.

I really appreciate your diversified Asset Allocation in your Portfolio and also the strong valuations as on today.,

Retiring early is the dream of almost everyone in this world. I always feel that just an adequate Retirement Corpus may not be the factor to decide the retirement date - but the most important factor to practically think on "What is going to be my Post Retirement Life".

I am sure when we pass through our career with our busy routine, there are many things that we like to do in our life but some how can't do those due to scarcity of time and we store that in our bucket list (To be done at your free time). Many times this bucket list becomes so big that some times we start thinking that, let me retire early so that I can start doing all the stored asssignments of my bucket list - based on my own priorities. Many "Such to do things" authomatically get disappered over the perid of time. But this is one important view Point to think on early retirement.

Infact in my career of almost 4 decads - I have seen the early retirees or even the retirees at 60 get bored/confused with the sudden change of Post Retiremnent life! I appreciate the fact in your case of adequate Nest-Egg developed over a period of time and also you do not have much responssibility except may be of your daughter's marraige etc. Therefore my suggestion would be to use the following startegy to retire early:

With the existing Portfolio Equity segment gradually Move to Mutual Funds atleast with those equities that you think are at stretched valuations.

If you are heavyly into Gold and Liquid Assets - just analyse the "any time requirement" size and if you are at Physical Gold - Move to Soverign Gold Bonds instead of physical one, for many reasons. Liquid Assets are important but not more than... say above your 6 to 7 months requirement at the most 11 months. Try to initiate in deferred annuity plans..with guaranteed Fixed rate payouts with long term basis. Every time you also need to check on Tax Efficiency...And with all this you start thinking or actually persuiting other favoriate things one by one, by taking out some free time from your daily schedule so that gradually you will get the idea about the new lifestyle and think whether you are eager to do that rather than the existing routine. So with all this I think you will be happy to retire at your age 55 or with more confidence at 53 but certainly not before that.. This is my frank opinion Sir!


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