I understand that it is too expensive to live in 21st century. These
are about those few things which I learnt from my experiences and observations,
things keeps on changing, you plan for something and when you reach near to
that goal, actually that goal might have been shifted. But, I do sincerely
understand that it doesn't mean we should stop planning.
As we do day to day planning – the time we wake up till we go to
bed, why shouldn’t we plan for our future expenses?
I am very risk averse person. And I am not looking for very high
returns in small periods. But Yes, I believe that we can built big corpus by
small savings – Like it’s said that the journey on thousand miles starts with a
single step.
I have drawn my own portfolio with small investments. I am in
Personal Financial Planning and advising spectrum, it is imperative that the
first experiment should be on me. That is how I can become confident in
advising my investors and my clients.
This is how my first portfolio looks like,
I am going to start SIP (Systematic Investment Plan) with
ICICI Pru Banking and Financial services fund – Rs. 1000 with
tenure of 3 or 5 years.
HDFC Midcap – Rs. 2000 for 5 years.
Axis Long Term Equity (ELSS) – Rs. 1000 for 5 years
Tata Ethical Plan A – Rs. 1000 for 5 years
Apart from this I would also invest in National Saving Certificate
– Rs. 3000 in 5 year scheme.
I would also put my surplus in Birla Sun Life Floating Liquid
scheme – Rs. 5000. Liquid funds have
been considered as emergency funds. After six months I would divert strategy
for liquid funds.
I will also keep on looking these funds performance in periods. If
it doesn’t perform well on certain parameters I would prefer to change it too.
Including this I would strongly follow to do rebalancing in a year. All the
four funds are Equity funds, which would be eligible for tax benefit after 1
year under Long Term Capital Gain (LTCG).
I am not investing in Public Provident Fund (PPF) at this point. I
do have account.
As per my bank balance I am not eligible for big investment like
real estate or gold.
Now the journey of thousand miles which was started with single step
let us see where we are after five years.
After five years the corpus would be 1.7 L more than if you have just
put in your bank savings account.
Now, If I use same strategy for the same next 20 years – till age
of 50 – the corpus would be 2.4 crore, where I have not calculated real estate
investment and other bonuses and commissions.
Simple conclusion is that if I start small investments like Rs.
8000 per month, we would end at 2.4 crore after 25 years.
This is the power of compounding and benefits of starting
investment early.
