With ₹10 lakhs, aiming for a consistent and risk-adjusted monthly income requires a strategic approach. Here’s a suggested plan:
- High-Interest Savings Account or Fixed Deposits: While interest rates are relatively low, parking a portion (e.g., ₹2 lakhs) ensures liquidity and earns some interest.
- Monthly Income Schemes (MIS) from Post Office: Investing a portion (e.g., ₹3 lakhs) can provide stable monthly income, though the returns are in the range of 6-7%.
- Debt Mutual Funds with Systematic Withdrawal Plan (SWP): Allocating around ₹2.5 lakhs in high-rated debt funds and setting up an SWP can provide a regular monthly income. They tend to offer better post-tax returns compared to FDs.
- Dividend Yielding Stocks: Invest in stocks of well-established companies known for paying consistent dividends. While ₹1 lakh might not fetch a huge dividend, it’s a start and offers potential capital appreciation.
- REITs (Real Estate Investment Trusts): REITs invest in commercial real estate, generating rental incomes. With ₹1 lakh, you can expect dividends (usually paid semi-annually) and potential price appreciation.
Key Points to Remember:
- Diversification: Spread your investments across various assets to mitigate risk.
- Tax Implications: Some incomes, like dividends and interest, are taxable. It’s crucial to factor in these when calculating net income.
- Liquidity Concerns: Always retain a portion of your investment in easily accessible forms in case of emergencies.
- Review and Rebalance: Regularly review your portfolio to ensure it aligns with your income goals. Use the LSG framework of Jama Wealth.
Conclusion: Turning ₹10 lakhs into a consistent monthly income requires diversification and an understanding of each asset’s risk-reward profile. While the monthly income from such an amount might not be substantial, it can be a stepping stone towards more significant financial goals. Always consult with a financial advisor for tailored advice.
