My parents are getting retirement funds (~1 crore rs) and we are planning to invest. We are exploring few investment options: 1. Fixed deposit: Relatively less management headache. 4-5% rate of interest which yields 4/5 lakh per annum. Cons: 1. Have to distribute over various banks due to scams and no FDIC insurance. 2. Inflation is high and hard to keep up. 3. Fix deposits interest going down year over year and may not be long term bet. 2. Investment property: We have 2 properties on rent and one of them is vacant due to covid (no tenants available to rent). So we lost rent of 1 full year. Pros: 1. Property rates go up and catch up with inflation. They may go down considering economical crises ongoing. 2. Safer option than Fix Deposit as they are susceptible to scam. Cons: 1 have to keep track on tenants. Fix deposits interest per year is 5lakh but rent will be 3lakh. Also have to pay 1 month’s rent to agents etc. 2 have heard about tenants not leaving and have to evict them. 3. Buying a commercial: Have no experience in this. But very expensive and rent is not as high. 4. Stock trading: Very risky especially in India and parents have no experience in this. Need to do some research and I need to get involved. I don’t have a lot of time, I need to pick good stocks and keep track and not let parents panic sell. Is sharekhan a good broker? Any good broker you recommend. I would focus on ease of use than costs. Any other options you have? No trolls please.
Post office gives around 7.5 % interest on FD for senior citizens
Send link. I will look further
Yes, this! My parents do this for work in India. DM me if you want your parents to work with mine. I think my parents even give rebate!
Invest in land in city outskirts. It’s going to give you much higher returns
Risk of encroachment?
I think if you take it as part of gated community land, you should be good. It’s not as bad. I bought land a couple of years back and it’s all good
Also do some research on REIT
In retirement one wants to keep low risk investments. Money in Public banks like SBI are relatively safe. They need to keep 2 years expenses and good amount for medical expenses in liquid funds (FDs). Buy a good health insurance too. Since there is enough real estate, invest rest in stocks, it’s liquid but there is a risk.
Thanks
For senior citizens you can use the senior citizen deposit scheme. Max is 15 lacs per person but it pays about 7.75%annually. These are with public banks and secured like a FD.
Invest a chunk of about 20lacs spread across 2 large cap equity direct dividend mutual funds. You could also opt for tax saving mf to cushion Income tax under 80C and use it to offset tax from dividend income
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Do a breakup of 25% FD in major banks ie SBI HDFC 25% in stocks. Again major players nothing fancy. Infy, TCS, Asian Paints, Nestle etc The brands you have heard and the leaders who are decent not like Mallya 25% in real estate Property . Farms, plots, Rental etc 25% is your Risk money that is you can use it go after high risk returns could be anything from Growth companies. If possible SP500 in the US, Bitcoin. Pick ur poison Most importantly fire n forget. Don’t look at it every day or month. Check quarterly or yearly according to Warren Buffett. Thank yourself in 10 years
Thank you
Are there mutual funds / ETFs in India that target specific industries ? Would it make sense to spread it amongst them for a true fire and forget ?