My wife and I earn Rs 27 lakh annually before taxes. Our equity investments total Rs 4 lakh - Rs 2 lakh in Public Provident Fund and Rs 50,000 in fixed deposits. In addition, we have two cars for which we jointly pay Rs 27,000 as EMI. She has bought a house for her parents and she pays Rs 31,000 as EMI (actual Rs 25,000). I and my brother jointly bought a house - now on rent - for which we pay Rs 36,000 as EMI. My wife and I plan to buy a new house. Even though we have several EMI payments to make, will it serve us well in the long term?
You should continue your MF SIPs in mentioned funds for the long term. You may further consider Aditya Birla Sun Life Frontline Equity Fund, Reliance Top 200 Fund and ICICI Value Discovery Fund for your additional investments. Looking at your existing savings, liabilities and ongoing recently started investment, we feel you are at high-risk portfolio pattern. Your EMIs of liabilities are more than your existing savings and ongoing investments. Further, increasing your EMIs of liabilities in anticipation of regular income flow in future, that too, without having reasonable savings, will further increase risk. Further, increasing weightage in the same asset class of residential real estate investment will not build a well-balanced diversified portfolio. Both you and your wife must be taking full tax savings benefit of your existing home loan EMIs’ interest and principal payment. Both of you should consider investment in National Pension Scheme to diversify your portfolio, build long-term corpus, retirement solution and additional tax savings u/s 80CCD. You may also do further investment in bonds, secured non-convertible debentures and other fixed income instruments to balance your portfolio.
I am a non-resident Indian and I want to know the best investment options for me. I can invest up to Rs 30,000-40,000 per month.
Divya, Kuala Lumpur
You can consider various asset classes like bank fixed deposits, mutual funds and direct equity that allow NRI investments within the given guidelines. Mutual fund SIPs are good for your regular monthly investments.