Do you have financial planning queries?
Please ask your questions here and rediffGURU Kirtan A Shah, managing director (private wealth) at Credence Family Office (external link), will answer them.
Anonymous: Dear Sir I would be retiring next year.
I would be getting Rs 50 lakh from a sale of ancestral property.
Kindly let me know how and where I could invest so that I get some regular income from this amount or it would be advisable to deposit the same in FDs (post office/bank).
Kindly advice on the tax part too as income is from sale of property. Thanks in advance.
There is going to be a 20 per cent tax on the capital gains with indexation. Because you want to use this money for regular cash flow, there is no way to avoid paying the tax.
Deposit the same in Senior Citizen Savings Scheme + LIC PMVVY and, if there is money remaining, invest it in a debt mutual fund and take 6 per cent SWP (systematic withdrawal plan).
Jignesh: Hello, What is best way to withdraw money in sunset years assuming one has done the retirement planning in his working years already via mutual funds, PPF, etc?
So if one desires to have a monthly pension in the form of SWP from his MF fund's accumulated corpus, how should one plan for it?
You can look at doing SWP from debt mutual funds but make sure you give the debt mutual funds 12-18 months before you start to redeem from it through SWP.
Also, don't do more than 0.5 per cent a month as SWP.
Firoz: Dear Sir I was in Gulf for couple of years. I have few lakhs in FD (interest was not taxable). Now I am back home permanently. Kindly guide further. Regards Firoz
Answer to this will depend on your requirement and risk profile but, in general, split this money into three parts:
(a) Liquidity Bucket: Ten per cent of the total money can be kept in liquid funds.
(b) Core Portfolio (70 per cent): Depending on your risk, choose between bank FD, corporate FD, debt mutual funds and secondary market bonds.
(c) Tactical Portfolio (20 per cent): Invest this in credit risk funds and duration funds of mutual funds.
Meva: I want to know the safe way to multiply my life savings (around Rs 70 lakh) lying in an NRI bank FD currently at 7 per cent interest.
I already own a house and have no pending loans.
I don't have a DEMAT account and have no knowledge of stocks and equity.
Because of your background, I would suggest you invest in mutual funds.
Start by moving Rs 20 lakh first to a debt fund and do weekly STP from debt to equity.
Invest Rs 10 lakhs in Kotak Liquid and do STP to Kotak India Opportunity.
Invest Rs 10 lakhs in ICICI Liquid and do STP to ICICI Value Discovery Fund.
Nitiksha: How do I choose a mutual fund?
It depends on what your requirement is.
- Less than 1 year of investment horizon: Go for liquid funds or arbitrage funds.
- Less than 3 years of investment horizon: Go for balanced advantage funds.
- More than five years: Go for equity funds.
Rajshekhar: Hello Sir. I want to invest Rs 70 lakh and want a monthly income of Rs 35,000.
Additionally. I earn 20,000; total earnings Rs 55,000.
I can run my family. I have no liabilities.
Is SWP a good choice? Please suggest any other alternatives.
SWP is the perfect choice.
At 6 per cent, you will get Rs 35,000 a month. Select some good debt funds and do SWP. Avoid investing in hybrid or equity funds for SWP.
You can ask Kirtan A Shah your personal finance questions HERE.
Disclaimer: This advisory is meant for information purposes only. This advisory and the information in it does not constitute distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.
Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.
