Creating a sustainable income stream, especially when one’s livelihood is on the line, requires a calculated and diversified approach. A sum of 2 crore rupees is a sizeable amount, and investing it wisely can help you achieve your monthly income target. Here’s a plan, grounded in the principles of stability and growth, that might serve your purpose:
- Fixed Deposits (FDs): Investing a portion in FDs can offer steady returns. If you invest 1 crore rupees at an interest rate of 6% p.a., it could yield around 50,000 INR per month. While FDs ensure capital safety and regular interest income, remember that the returns are taxable and might not beat inflation in the long run.
- Mutual Funds – Systematic Withdrawal Plan (SWP): Consider allocating another portion, say 50 lakhs, to a mix of equity and debt mutual funds. Using the Systematic Withdrawal Plan (SWP) facility, you can draw a predetermined amount monthly. This setup can potentially offer better post-tax returns than FDs over time.
- Debt Funds: These provide better liquidity than FDs and might offer slightly higher post-tax returns due to indexation benefits on long-term capital gains. Allocating around 30 lakhs here can provide a cushion and additional monthly returns.
- SEBI Registered Investment Advisor: Consulting with an advisor can give you insights tailored to your risk profile and financial objectives. They can assist you in fine-tuning your investments, ensuring tax efficiency, and optimizing returns.
- Emergency Fund: Always keep aside a portion, say 20 lakhs, as a liquid emergency fund. This fund acts as a safety net for unforeseen expenses and provides peace of mind.
To sum up, by spreading your 2 crores across a mix of FDs, mutual funds, and debt funds, you can aim to secure your desired monthly income of 75k. And since you’re seeking a monthly return, this approach balances safety and growth, which is the essence of the Roots and Wings philosophy I endorse. I am not recommending equities right away because of your ultra conservative risk profile; but do remember that equities are great for long term wealth creation.
I navigated the tricky terrains of finance, enabling me to retire in my 40s. I’ve always believed in not interrupting compounding and maintaining a high equity allocation during my investment journey. These principles served me well. If you need a trusted advisor to help you in this journey, consider Jama Wealth’s services for guidance.
