I am 36 years old doctor 1 lakh per month. i have one 42 Lakh Home Loan (EMI of 37,000). I want to invest in mutual funds for my son’s education (he is 4 years old) and for my retirement. Please suggest good mutual funds with track record. I can invest around 20,000-30,000 monthly which can be increased later.
– Name withheld on request
It would be good to have a target amount and time frame for your son’s education and retirement. Usually, for the child’s education, parents give preference to the age of 16, 18 or 21 depending on their plans. You can consider creating a corpus for your son’s education for 12, 14 or 17 years. As you are a doctor, your retirement may not be the same as in the service sector, where they are sure about their retirement age. However, you can consider the retirement age for better planning.
If we assume your retirement age is 60 and the time limit for your son’s education is 14. In the 14th year, you will be able to collect approx. 2 crore investment 30,000 every month and 10% increase in investment annually. The corpus is calculated assuming 12% p.a. return. You can use a part of this accumulated amount for your son’s education and rest for your retirement.
To get better clarity, if we assume that you put aside 1 Crore for your son’s education and continue to invest the balance amount with increasing SIP annually, you will be able to deposit approx. 7.25 crores for your retirement also till the age of 60 years. I suggest you to consult a financial advisor for this. However, you can consider starting with a SIP of 6,000 each of these funds – UTI Nifty Index, Parag Parikh Flexicap, Kotak Emerging Equity, Canara Robeco Emerging Equity and SBI Focused Equity.
You can review these funds every six months to see how they are performing. As your SIP amount increases, you can add more funds. However, try to limit it to 8-10 funds.
Harshad Chetanwala is the co-founder of MyWealthGrowth.com.