How can I invest my income to build long term wealth?

– Shubham Ghai

You can focus on long-term wealth creation but having clarity on your near-term goals will help you plan better.

You can consider investing with the help of mutual funds and as you gain more experience, you can look at investing in stocks as and when required.

Mutual funds are the best way to invest as they are managed by professional fund managers. Having 6-8 equity funds in your portfolio is enough for all long term goals.

At present you can start with 2-3 funds. Avoid investing in mid-cap, small-cap and sectoral funds or making random investments at this stage. Try to build a portfolio that is primarily large-cap-oriented. You can currently have a mix of index funds, large-cap and flexi-cap funds. Over time, you should plan to increase the monthly investments as you grow with confidence and career.

Harshad Chetanwala, co-founder of MyWealthGrowth answered this question.

Me and my wife are in their 30s and invest 60,000 per month through SIP- 20,000 in HDFC Sensex plan, 10,000 in ICICI Balanced Fund, 7,500 in HDFC mid-cap opportunity, 7,500 in HDFC Small-cap Fund, 7,500 more in DSP Mid Cap Fund 7,500 in DSP Small-Cap Fund. Our risk appetite for the next 10-12 years is high, and we need to know what changes can be made in our allocation.

– Name withheld on request

I would suggest that when you have about five years left in your investment horizon, you should start making some debt allocation to your portfolio and start building it with profits from your overall equity portfolio. This will ensure that you are not completely exposed to market uncertainties when you need money.

When it comes to small and mid-cap funds especially, it would be good to have more diversification to take advantage of multiple strategies. You may wish to add or replace a small and mid-cap fund from your portfolio with similar funds from Axis (Mid-Cap) and SBI (Small-Cap) fund houses.

Shrikant Meenakshi, co-founder of PrimeInvestor.in answered this question.