With Rs. 90 lakh in hand and a desire for a low-involvement investment strategy, you could consider an asset allocation approach dividing your funds into equities and liquid assets. This approach is designed to meet your monthly needs and also provide growth potential for the future.
You could allocate a portion of your funds, say 60% or Rs. 54 lakh, to equities. This could be invested in a mix of high-quality stocks or equity mutual funds. These investments have the potential to offer higher returns over the long term, albeit with increased volatility and risk. Keep in mind that the goal for this portion of your investment is capital appreciation and it should remain invested for a longer duration, ideally 5 years or more, to ride out any market fluctuations.
The rest 40%, or Rs. 36 lakh, could be kept in liquid or near-liquid assets like liquid mutual funds or ultra-short term debt funds. These are low risk, provide easy liquidity and offer better returns than a regular savings account.
From this liquid allocation, you can draw your monthly requirement of Rs. 80,000. The total annual withdrawal would be Rs. 9.6 lakh which is a withdrawal rate of about 2.6% from your initial investment of Rs. 90 lakh. This is a safe withdrawal rate considering your investment horizon and assuming a conservative overall return of around 7% from your portfolio.
Every year, you should rebalance your portfolio. If your equity investments have appreciated, take profits and replenish the liquid portion of your portfolio to ensure you continue to have enough to draw your monthly Rs. 80,000.
Dont forget to periodically review your portfolio and adjust your strategy based on market performance and your financial situation. Consulting with a SEBI registered investment advisor could provide additional insight tailored to your personal circumstances and goals.
