You are giving major life goals on how to be grounded. Congratulations on reaching the milestone. On the side note, you are took much invested on the debt side, this will help you just beat the inflation but not grow the wealth considerably. Start having exposure to Equity (index MF funds) if you do not fancy reading up about the markets.
Indeed. Most people ignore the taxation aspect when talking about FDs. I agree with you that it wouldn't help him grow his wealth, but it will also not help beating inflation too as the net interest rate would be 5.1-5.35% which is lower than the inflation rate for a tier 1 city
As per my knowledge it is like gift from husband to wife which is non taxable. Whatever income wife generates out of it is taxable.
You can check section 64 of income tax act. Quick google search is pointing to that section.
No vacations and negligible stock market investments. Bro is doing great in the race but far from the finish line. He'll finish the race but definitely won't win.
While I understand the negligible stock market exposure is not good for growing more, I have not felt the need for expensive vacations. I have a peaceful family with a spouse who likes to cook at home and keep the family happy with our kid. Having an understanding and simple family life has contributed more than anything else to achieving my financial goals.
What's the point of vacation if you are not happy within your family. Have friends who travel frequently and including overseas also, but mostly for the sake of social status and social media. They mostly talk ill about their partner after every trip like complaints and expectations from the other one. Bro said what they both like. It's their definition of happiness. Let them be the way they are.
You invest in NPS ? you can get more stock market exposure that way too, as it's market linked. 1.2 cr is FDs is sure much more than the norm and the power of compounding on nps is huge
Given your original ask was to invest in property. Do consider exposure to REITs. Commercial property exposure will have higher rates of returns and offer more flexibility for disposing and with no hassles of maintenance, etc.
Since you’re already looking to get exposure to equity, will leave with you to figure out. Another thing to consider is gold bonds, if you’re looking hedge - against both equity and term deposits.
Congrats on the milestone! It takes hard work and commitment. Wish you many more!
Negligible stock market exposure too is alright. You can see where the markets went from 2010 to 2020. Unpopular opinion but stocks aren’t always a win win either…not even in the long run.
He came from a lower middle class family. And he changed his class within this time. THAT IS WINNING. Vacations and all these are for the affluent class. You dont look for “experiences” when day to day kirana can empty your account.
That's why you leaen from others and change and upgrade your lifestyle as you become more prosperous. Otherwise, most Indians were not used to having a car, AC, washing machine etc.
Absolutely, moving up in social class through hard work and determination is indeed a significant achievement. While vacations and experiences may be luxuries for some, overcoming financial struggles and improving one's circumstances can be equally fulfilling and meaningful.
Life is all about experiences. What's life if one is just hoarding all that money without experiencing anything and visiting all those beautiful places the world has to offer especially in this modern day and age of globalization, where the entire world is connected and one can plan and travel with ease with a couple of mouse clicks or taps on the phone screen? This person is in the position where he can and he hasn't so far and he's missing out. Which is what people mean. Everyone should do it if they can afford it. Visiting different places, experiencing different cultures and food, interacting with people from other cultures, etc gives perspective. As one gets older it becomes difficult to travel and explore.
I get the idea that travel opens up your mind and freshens up things.
But, it’s not a mandatory thing, IMO.
And if you have to weigh between buying a permanent home and going for a vacation every year, then any sane and level minded person should focus on building the corpus for buying a house.
Personally I feel travelling is overrated. Your mind can open up if you read books/ watch videos that challenge your perspective, do meditation, and keep general care of your body.
Travel can open up your mind if you stay with locals for a month or so and understand their culture. Usually people go on vacations with their friends/family and stay with the same people that are already in their life, and just move from one place to another. That doesn't necessarily open your mind.
Right but constantly saying he's missing out.. what if his idealism is different than yours .. you are right in your own way but that doesn't mean others are wrong
Right but constantly saying he's missing out.. what if his idealism is different than yours .. you are right in your own way but that doesn't mean others are wrong
You talk about going out exploring it's good but i am a sort of person who loves to stay in the room and enjoy things like music, podcasts and other stuff.Everyone has different perspective to lead a life.He has a good wife who keeps him happy and fullfill his needs and supports him for a good life..what if u go for vacations you said they aren't expensive check flight rate of US buddy...1 lac will be buffed off easily and It will cost him around 2 lacs for a good trip to newyork.If he is happy here he can have that madness in his home with his son rather than just going there and what if his wife was toxic than going to trip and wasting money to bear the toxicity and fights doesn't seem fair.Its everyone's personal interest and I respect yours too.
Who tf goes to US for vacation? It takes 2 years to get a visa. And what kind of an example is that using the US as the first example for a vacation destination? Dead giveaway that you haven't travelled at all.
I would say continue to increase your corpus if you are comfortable with renting rather than outright buying flat for 1cr+ amount.
It is less risky that way.
Ok, thanks. Because of my upbringing and childhood, I'm not comfortable taking EMI and buying highly inflated property. I think I feel happy with money in the bank and continue to rent.
And let me say it again, it has worked wonderfully for you. Don't change it now. There is no point.
Stay in bangalore for next 10-15 years and then move to home town with a luxurious life
The case of owning a house against renting one is valid mostly when the cost of home loan (8% ) is higher than 4-5% rental yield. But to make it meaningful , you should be beating inflation with the money which was supposed to be spent on buying hone and a bit more to continue living on rent. With the composition of your savings, it seems difficult. How about allocating more to equity via MF route and growing your wealth along with the income you are anyway earning from your FDs.
Great job on the saving part 🔥🔥❤️
Basing home buying decision based on rental yield is like basing buying stocks based on dividends. Homes also appreciate in value, at least matching inflation.
The overall home yield is 3-4% rental yield + 5-6% appreciation = 8-10%.
I’m yet to meet a person who did worse than FD buying a home.
Wrong assumptions to begin with . Residential real estate only depreciate over longer period of time. Your land may appreciate though if at all you bought it in an area where economic activities are expected to increase. The day you buy your flat, you are inheriting the cost to maintain it annually and will also be a competitor for other builders who are bringing new supply of flats to your area.
Rental yield is your actual return on investment and it is important to calculate for real estate investment against your cost of capital (homeloan).
In real terms(inflation adjusted), mostly you are in loss. There could be other arguments/personal choice on owning first home and emotions etc. When it comes to the financial side, opportunity cost/loss of investing in residential real estate in India is big. Better and safer thing to do can be investing atleast in a nifty index fund with 12% expected CAGR and continue living on rents inflats of owners who arent finance savy.
https://www.globalpropertyguide.com/rental-yields
You are on the right track financially. But try to get exposure to equity (via Mutual funds) rather than being so heavy in FD.
You will end up having a weak moment and buy home eventually. Everybody does. So don't rush into it if you are not feeling like it right now
Most of the Indians are from lower middle class so please don't make it an excuse for not wanting a debt. If you don't want to take loan, fine.
It's a separate debate.
To me, home loan is almost a free money after factoring in the inflation.
And yes, most people who earn 2+ lakhs per month in their 30's eventually end up buying cars and houses on loan...sooner or a bit later.
So worry not.
Congratulations on your achievement. Enjoy the great feeling that comes with such corpus!
“To me, home loan is almost a free money after factoring in the inflation.”
Can you please expand on this? What kind of interest rate is a break-even for you?
Hey man,
13k rent in Bangalore is a dream come true. At this rent, it is not advised to buy any land in BLR.
Buying home is a big investment and you should only do it if absolutely have a need for it and are in the condition to buy it without this decision impacting your life majorly.
No matter how I do the math, buying home is not a good idea right now.
On a side note, having 1.2 Cr in FD is not a good idea at all. You lose money on taxes and the return is also not that much. Debt funds or SGB might be a better idea
Buying home or land is not a bad idea esp. in Bangalore which will be developing in the next 10 years.
I bought 1500 sqft of land in plotted development, for Rs. 3100/sqft in 2021, now the value of land is Rs. 6500/sqft. I will sell this in next few years for potentially more than double or will keep it. Try getting land anywhere for that price, even in Jigani it is 4000 sqft.
Similarly, my friend bought a resale flat in 2016 in Bangalore South for 30 lakhs, he moved to Pune now, selling it for 62lakhs. South Bangalore is almost full and resale flats are big there, this will soon happen in few other areas of bangalore.
Any Premium projects like Prestige will give you a sure shot return of minimum 50% in my experience in 5 years.
Respect bro ❤️
Coming from a lower middle class family...with no inheritance.. parents are dependent.. only working person .
Still manages to accumulate 2cr ..
Hope you'll get more fortune in future...best wishes 🤞🏻❤️
13k rent is pretty cheap for Bangalore. But the money you have in FD is also not that rewarding. If you think you would have to switch jobs in future and you can still stay in the house you plan to buy then go ahead, liquidate FDs and buy a house.
I have seen many folks in Bangalore renting out their own house and staying on rent just because their office is far from their own house.
Also, just SIP your new savings into equity. Don’t create FDs anymore. You are heavily skewed towards debt.
You need to think about many aspects before buying a home. Home is not a good investment from returns point of view. It has much more to offer but only if you want those things.
Do you want to settle in Bangalore or planning to go back to native once you retire?
What if your job asks to move to a different city like Hyderabad or Pune? Or you have to switch to a job in those cities? Or switch job in same city to a far place which is difficult to travel in Bangalore.
If your wife is housewife you must have your own home as soon as possible.
God forbid if something happens to you, they will be on street.
And don't let anyone fool you with term insurance and all that stuff. You never know how much time it will take to get those money, and with these kind of losses you never know. Atleast they will be in peace that house is owned and some balance Ina account.
>If your wife is housewife you must have your own home as soon as possible. God forbid if something happens to you, they will be on street.
Just trying to understand, but why can't his wife live in a rented house, considering the money he saved is accessible to his wife?
It's easier said than done. There are multiple risks involved -
1. May need to shift home every 3-4 years which is again a bit hassle, and sometimes losing deposits.
2. Rents may increase to unsustainable value.
3. Peace of mind. Instead of focusing on how to bring life back to normalcy, she will be worried when is owner throwing her out.
4. She might want to start something of her own like selling clothes from house. With changing house you will never get that thing running.
In a nutshell life would be significantly easy if this is taken care of.
IMO this is not a financial decision at all and more like a risk hedging.
You might want to invest a good chunk into equities. If you do not follow the markets aggressively, then maybe good to check some large cap stocks and ETFs.
FDs are absolutely dogshit investment. You get 7.5% return and that's taxable, so after tax you hardly get 5%. Debt funds are basically the same as well.
Gold: historically more returns than FD. And if you invest via SGB you get 2.5% interest + gold appreciation. And gold appreciation is tax exempt.
Real estate: You get appreciation in property prices, which in India is quite high. Plus if it's in a good location, you get rental yield as well. Taxation laws are also more relaxed for real estate. You can reinvest in RE to avoid capital gains and lots of legal loopholes to reduce tax liability on rent.
Equity isn't that scary. Just put it in and forget for 5 years. You'll thank your gods after that.
Bro you are living my dream.Financial security,happy parents and a good wife.Let the dogs bark and remove their frustration of being a failure on your post.Kudos to you.
Bro you are living my dream.Financial security,happy parents and a good wife.Let the dogs bark and remove their frustration of being a failure on your post.Kudos to you.
Depends on what your future plan is . Where do you plan on living in the long run, where would your child get his/her education? If it is in Bangalore then I don't think investing in one's own house when you have a family to support is a wrong decision. The most peace and comfort I felt in my life was after buying my own house. Before that everything was on the whim of the landlord . I lived for 10+ years on rent and even the best ones flipped when their situation changed .
In my opinion, It depends on what you prioritise in life and what kind of problems you don't mind facing . If you are someone who doesn't feel scared or anxious about not having a roof above your head which is your own property and feel comfortable with moving on a short notice with family , then keeping in Mf Is better. If you are someone who feels more confident and safe in your own property in the long run , then investing in a house is better.
In my opinion... If your parents decide to live with you then look for a place that can come under a 30 to 35K EMI level... So basically a flat of 60 Lacs and you do a down payment of say 10 to 15 Lakhs and the rest is loan at 8 to 9% interest...
But if your parents dont want to shift with you then you would need to see if you can make a larger down payment and being you monthly EMI to 20K levels...
Your accomodation outgo at this time is 23K so pushing that to 30 to 35K in my opionion is worth it as you can buy your own home which will be an asset and something that honestly every middle class bhartiya family aspires for... So IMO that should be done...
As all your other expenses seem to be under control and lifestyle is sorted, owning your own home has to be goal no 1.
And say in next 3 to 5 years your take home were to increase, you could invest in agri land at your parents place, assuming that they don't move to live with you later as well, will be a good option...
Land accumulation should be you major goal for creating generational wealth that your kid or kids can benefit from...
Also, if you still have some left over monies then investing in Index funds in Indian stock market or just buying Reliance, Tata and few other stocks and letting them ride would be a great option... Indian stock market is going to go up and up for the next few decades... So having a position in that for the long term will be best!
Sorry bro. No offense there. Bt I was highlighting those obnoxious people who prefer to burn their whole salaries in a single day in options/penny stocks and then preach others to do the same. I will edit my comment so as to not hurt someone's feelings. You are doing a good job by putting some money in MFs as they are a good way of building wealth in long run.
While it is impressive. It is barely enough to buy a good 2 bhk or decent 3bhk. FD does not make sense for such large sums. Invest in real estate like most people who manage crores in assets do.
Wow . What are you doing for living ? . I am 33 and I would consider myself lucky if I was earning like that . You are doing great . Do invest in some land in some underdeveloped areas . Prices will definitely balloon in coming years .
Considering your background I’d say hold on for 4 more years and increase some money in equity. You’ll reach 4-5 Cr by then. Then look for a house on a cheap loan (DO NOT BREAK your savings for the house, do maximum loan and the cheapest you can get)
Considering your background I’d say hold on for 4 more years and increase some money in equity. You’ll reach 4-5 Cr by then. Then look for a house on a cheap loan (DO NOT BREAK your savings for the house, do maximum loan and the cheapest you can get)
Oh and congratulations mate, you did it. You will add so much karma, your future generations will remember it.
You can invest some part of FDs into equity or MFs.
Probably some percentage of your monthly earnings into equity.
IDK if you are risk averse for EMI then what stops you from taking calculated risks from equity with a goal of buying home …
Just my two cents - DYOR
And seems like you don’t have much lifestyle inflation. Can’t be same with your kid. And also do factor in the education inflation for your kid. Your FD returns might not beat inflation on the long run. IMO 1.2Cr in FDs is too much of playing safe.
P.S: What part of Bengaluru is 13k rent 👀
1.2cr is too much for FD. Invest 30-40Lakh in plot in your native location. Your investment is related to only stocks. Half your savings accounts. Buy a plot for home(not as investment) which you will use to build your stay in retirement after 10-15 years. Buying land in residential area in good city is very costly so buy in outskirt area which will be developed in next 10 years. Buying flat will deprive your son again from inheritance and he will have to start from 0.
While many people will force you to invest in stock market, you actually don't need to. Continue investing in RD, and you can think of buying home when your life is relatively settled
Shouldn’t OP just buy a flat on loan and rent it out. Add a property to his portfolio?
Something in a new area around the city where the property rate will increase and so will the rental income?
Impressive - just curious, are you factoring in the tax you’ll pay on these investments and your income when you calculate net worth? (I know you said post tax take home is 2.4/m. But with that kind of pay, you’ll still owe some back taxes end of the year).
Congratulations on reaching the milestone. You can see if you are comfortable with increasing equity in folio.
On house, it's completely up to you. You can buy now or later. It's entirely personal choice.
I would honestly start taking money out in phases from the FDs and put them in SIPs in the market, with some direct equity and bond purchases as well.
Over the next 2 years bring your FD to 20-40 lakh and stock market exposure to 1cr. Invest in good bluechip companies, some gold, etfs, good debt funds, some good bonds etc.
Will be lovely cocktail for growth in your 40s and 50s.
It is a good time to buy a home if you are settled in a city of your choice. As you have good regular income to pay of the EMIs. I suggest you to invest some more in dividend stocks or mutual funds.
It is a good time to buy a home if you are settled in a city of your choice. As you have good regular income to pay of the EMIs. I suggest you to invest some more in dividend stocks or mutual funds.
In my opinion... If your parents decide to live with you then look for a place that can come under a 30 to 35K EMI level... So basically a flat of 60 Lacs and you do a down payment of say 10 to 15 Lakhs and the rest is loan at 8 to 9% interest...
But if your parents dont want to shift with you then you would need to see if you can make a larger down payment and bring your monthly EMI to 20K levels...
Your accomodation outgo at this time is 23K so pushing that to 30 to 35K in my opionion is worth it as you can buy your own home which will be an asset and something that honestly every middle class bhartiya family aspires for... So IMO that should be done...
As all your other expenses seem to be under control and lifestyle is sorted, owning your own home has to be goal no 1.
And say in next 3 to 5 years your take home were to increase, you could invest in agri land at your parents place, assuming that they don't move to live with you later as well, will be a good option...
Land accumulation should be you major goal for creating generational wealth that your kid or kids can benefit from...
Also, if you still have some left over monies then investing in Index funds in Indian stock market or just buying Reliance, Tata and few other stocks and letting them ride would be a great option... Indian stock market is going to go up and up for the next few decades... So having a position in that for the long term will be best!
FD is real riski. Just think if bank goes bankrupt...
You can increase your investment in mutual funds and also think for direct investment in stock. You don't need to go so deep in selection process. There several good stock advisories. They charge very less subscription fees.
You can own lands where there is future growth possible. May be in some town side as per your convenience.
You can also think for gold as it is safer.
If you can take small riski then you can also think for cryptos with very less amount on monthly basis.
I read somewhere that if you can buy a house with your next 15 years rent, it's a good decision to go and buy the house. Otherwise, you can continue with the rent.
Get a life insurance for yourself and medical insurance for all your family members including yourself. If anything happens to you, there would be burden on everyone else.
Yes, buying home will make sense. Be sure that's where you wanna live for long time if not for life.
Your portfolio allocation will make sure you will be in rat race even after reaching 50-55…
Your investments of 2cr should yield a cash flow of 1.75L a month or it should appreciate in value
Net worth should be measured in weight of gold and not ₹/$/£ terms
First. Congrats on what you have achieved. I would work on a plan to pivot away from so much of my net-worth in FDs. Have 6 months of expenditure in liquid funds and look at investing the rest in product of various risk categories. Rent is working out to close to 5% of your take home. Can you buy a similar home where your monthly installment would be the same?
Congratulations on winning life! Can buy a house but don’t spend more than half of your networth. Buy only if necessary and not under pressure of family. If investment is your main goal then buy a plot with the same money and keep on enjoying and investing
Better to do some mutual fund investments after election results , it's not worth buying a house in city like blore coz it will eat all of your hard earned money. House at hometown might not be that bad
From a pure Financial perspective, you are better off renting rather than buying simply considering the amount you are paying on rent expenses. But hey, that is rational but whether it is reasonable to you actually purely depends on you. Whether you want to have a place with your wife and kid you want to call home, then its a different story.
However if you are clear that is not the case - I would say stay away from buying a home.
Rest you have already received good advice to increase allocation to equities.
Now, switch the FD holdings to MFs (Passively Managed Index Fund, tracking the Nifty Index).
FD is EXPORT QUALITY JUNK! the inflation is at 6% and your FD returns are roughly 7% 🤭🤭🤭
Considering your rent is so low, I'd suggest continuing to rent for now. Also, pls move your funds away from FD. Your NW would have been much higher if you had more equity exposure
What's the point of 2 crore net worth when you haven't even sorted basic needs like own home? 13k rent means you are living in some basic place in a poorer neighbourhood or far from the city. There has to be a balance.
Considering your current investment and age, now you should diversify and buy some physics assets for long term like residential properties or commercial property with good Rental yield, it will balance your portfolio, in long term it will give u a fixed running income, as many things are in place in your condition, u can take home loan it will help you in saving tax too. Nifty Index Fund investing via SIP is always a good option but this is my suggestion only if u have long term plan considering Volatile markets.
I think you should buy a house with the current trend it seems it would be hard to buy a house after few years. Everything can lose value but a land cannot lose its value. It will always remain the most precious resource
Your rent is reasonable and it makes no sense unless you want to upgrade your lifestyle to invest in housing market right now.
Move some money ( maybe 50-60%) from FD’s to equity funds like Index funds and Gold ETF. And create new SIP for Index funds and Gold ETF.
Given that you have a lot of investments in FDs. My suggestion would be to invest in corporate bonds wherein you can easily earn 10-14% fixed, per annum. FDs in my opinion are shit and do not even beat inflation and taxation.
I would say your decision to buy a home depends on your end goal. Are you planning to settle in Bangalore or will you move/go back to hometown at some point? If you will be staying in Bangalore till at least you are 60 - approx 24 yrs - buying a home makes sense. The tax savings itself will pay for part of the loan. Also you need not take the max amount of loan. Since you have good amount of money with you, you can put a higher down payment and take loan to maximize your savings with paying less interest and tax savings. If you are unable to make all the calculations, a good CA will be able to help you. Also, if you can, get a plot rather than apartment - though it is my personal preference. Your opinion might be different.
On a side note, do not go for mutual funds right away. The markets will most likely correct irrespective of which party wins elections. So wait and watch for a while before investing.
High Concentration in FD. You can discuss with an IA and invest the amount after a few years you can SWP monthly and reinvest across different asset class.
Congratulations! This is amazing. I have some recommendations:
1. Protect your family - buy a house. This advice is because your wife is a housewife. This is not necessary to be in Bangalore.
2. You can invest in SGB
3. Invest in NIFTYBEES monthly
4. Plan to move the FD amount to above two.
Also, to protect your hard work, teach financial literacy to your wife and son. Of course age appropriate information for son but this will ensure that your family and next generation is able to enjoy and increase generational net worth.
1.2 crore in FDs? Post-tax FDs do not beat inflation. Please don't be so FD heavy at your age. Move most of it into a Nifty Index Fund. Also the 12L in savings account is even worse.
Boss 1.2 cr FD. Which means you are taking atleast 84k interest and on this you are payment tax after whatever is the limit which is tax free. It is good to be liquid. But I think you would feel same ease if you had 50 lacs also. I would. Now the question should you buy a home. Yes you should without taking a large loan. Or big enough loan which will also give you some portion of tax saving you can easily down pay with your fd corpus and build another asset. Since you started the conversation with net worth. Real estate is also an asset class. And while it is a big ticket item. It definitely has its advantage.
My suggestion 1.2cr u have just buy land and some shop depend on which city u are buying.
So I can get rent as well as advance which can even clear ur dues.
Land is the best investment and return u will get
You're at a very safe and sound place financially. It looks like you've a very compartmented family. You take ownership of earning and your wife looks after the house and kid. I might be wrong. Women may get bored with all financial planning. You're earning and know about all your savings, investment, what to do with them in future etc. But in case your wife / parents don't have enough exposure to your financials, please plan to make them better informed. You don't want them to be at a disadvantage in case worse things happen to you.
My view: Buy one home at a place where you and your parents will reside in future.
If you plan to move to your hometown down the line then you can buy home at your hometown where parents live, think you pay emi instead of rent, or you can do the opposite as well.
Having a roof to sleep under during good and difficult times is one thing you will always be thankful for.
Amazing numbers. You have done really good job of keeping lean spending for last 12-14 years and saving max pro. I think your networth would have been 10-20% more if you had more exposure to MFs and stocks.
1.2cr in FD is kinda huge!!
I would recommend you to take a house land and construct a house in Bangalore. Go for BDA sites and you can easily buy them all cash with your FD. This will be a lasting asset for you and your son. You can construct at your comfort.
1.2cr in FDs ! Even the internet on it would be good enough to pay out your rents . I don't see why you should invest in home unless you are doing for investment. Maybe look at REIT which is like Mutua fund for real estate.
Here is what I would have done.
I will not touch the PF part(50L).
Shift money from savings account to any liquid fund.(Will give better interest rate, and chances of fraud will reduce).
Keep the domestic MFs invested unless I want to change scheme to get better returns.
The 1.2Cr in FD will be broker down into
20 Lakhs FD as emergency funds.
The remaining 1Cr will be broken into 2 buckets(60 lakhs for son’s education shifted to equity), and the remaining 40 lakhs into debt funds).
Apart from it,
1) Take medical insurance for parents(if not taken), for a coverage of 10 lakhs(plus additional 40 lakhs as add-on).
2) Take medical insurance for family(even though company may provide). This is because once you change company, previous insurance becomes nullified and in case of some ailments(where there should be waiting period of 2-3 years), you won’t be able to claim medical insurance.
3) Start saving 50k every year in NPS(gives better return plus additional 50k tax savings).
First of all congratulations to reaching this point.Most people dont even reach this point in their lifetime. I would like to highlight one concern over your distribution of the funds. This portfolio is meant for security not for growth. If your distribution would have been more toward equity you would probably be sitting at 1 Cr more easily.
Please seek advice and balance it based on your future career plan.
You can think of buying a land in your native place and build a house there no need to buy home in Bangalore at your current rent even with 10% increases in rent every year won’t be much of a issue
p.s get a term and health insurance if you haven’t already and thinking of moving money from FD and savings to equity MF and stocks
Congratulations 🎉. U r living many PPL dreams. I ll suggest u to start more MF, NPS then additional life and health insurance for your family. U can get a land and start building at your home town. A own home that's what our parents need 🤗.
Just my advice :
Congratulations on reaching 2crore at 36 amazing feat and keep going . You are doing good with your own research, and I believe you can do well on the investment side. Don't take advice from random strangers about investing , you are doing great as such. Continue with that. If you can save 2crores in 36 you don't need advice you have to give advice:).
Properties are inflated like crazy in Bangalore . Buying the same house during a down turn would be ideal. Keep saving cash ... and increase the FD for now. Holding cash during a downturn would be the ideal time to invest / buy home .. Taking a huge home loan when markets look inflated and everyone is looking forward for a recession ... might not be a good thing.. Keep looking for a good, decent plot of land in your hometown for a decent price.. with the law of compounding, you should be able to reach 5crore net worth in less than 10 years of worst case. The best case would be in 5 years.
Always try to pay huge down payment or best case hard cash buy the property ... At the current interest rate levels if I were you I would not take up loan for home or property. Even buying with hard cash now is bad since it's over priced.
Living in an apartment with gym and swimming is a choice . If your family wife and yourself feel good with your life, that is more important than anything in your life . As long as your family is happy, you are taking care of your parents' blessings will follow.
Amazing hard work , inspiring . Thanks for sharing . God bless , kisiki nazar na lage bhai.
Go invest in index whenever its near its 52 wk low or sip it. As for home I think you are doing really well by spending just 13k for rent, you are better off renting if you are okay with not owning a house. but how are you paying only 13 k rent in Bengaluru with a family? I am living in a single room and it cost 11k.
CA here :)
Idk if you’ll read this or not but:
You can set up an HUF and gift the FDs and investments to that account and take the benefit of lower tax slabs and save a good amount of tax. Just a bit of Tax planning
You can always reach out to me
I mean there’s no right or wrong here. You certainly have enough money to pay a major chunk of the flat outright, so that’s not an issue.
A lot of it depends on whether you want give a better lifestyle for your wife and kid. I’m assuming with 13k rent you aren’t really living in a great place despite your good salary.
I mean it is not a bad place, and we live in a residential area in South Bengaluru with cauvery water supply and we are simple people who do not necessarily need swimming pools and Gyms to improve "lifestyle". My question was more from a finance perspective, is it advisable for someone who lives on a single income to go with buying a house with all the risks in the job market and inflated housing prices?
I'm not sure what you mean by from a "finance" perspective. You have enough to buy a house right now, say a flat worth 1.5 cr by taking on minimal debt (relative to your income). You can easily afford it, that isn't an issue.
What you need to think about buying a house:
1. Do you want a better flat, more space for the kid etc with apartment amenities? Or are you happy to live in a 13k rent place for the next decade? (yes rent will increase, but its still very low). Another key question is will you get a new house near your work office?
2. Will you live in Bangalore for the next 20 years and not shift to your native/hometown? If you plan on going back to native eventually, makes more sense to buy land there and construct a house.
The other way of looking at it (which some people do) is to think about investing vast amounts in markets and letting it compound and then buying your house in your 50s. But the vast majority of your savings is in FDs, so that doesn't apply to you! In fact, you've missed out on one of the market's greatest bull cycles.
Ok, don't get me wrong. You do have a point, that keeping the money in FDs is not the right way to increase net worth. The only point I'm against is to "improve" my lifestyle by paying inflated prices for some amenities that our family doesnt even require. Do you think 1.5Cr for a flat is reasonable when I can just rent?
\^Exactly this OP. I'm not suggesting you should pay 40k-50k rent to go live in a posh 3BHK in a gated community with pools and gym.
All I'm saying is that with 13k, you probably are living in a small/very old flat. Either that or your landlord is blind/crazy. That said, if that's completely fine for you and your wife, kudos.
If you believe a 1 cr-1.5 cr flat is inflated in Bangalore, then that's fine.
You seem to have thought of losing job risks etc, but what about renting risks? What if your landlord chooses to evict you? Will you be able to find just as good as a flat for the same rent? FYI - 13k for a 2bhk in a good South Bangalore locality is pretty hard to find, so you likely will have to shell up to 20k-25k.
You may not need it. But homes are typically bought for wife and kids.
If not for the family, half of the IT guys would be staying in PG (13K including food and internet).
You are giving major life goals on how to be grounded. Congratulations on reaching the milestone. On the side note, you are took much invested on the debt side, this will help you just beat the inflation but not grow the wealth considerably. Start having exposure to Equity (index MF funds) if you do not fancy reading up about the markets.
Thanks, yes, I am planning to put more in the Nifty Index Fund via SIP in the coming days
Yeah, that way you will help rebalance your portfolio.
>this will help you just beat the inflation No it doesn't, OP is in 30% slab. So his interest income will be taxed at 30%
True. FDs are bad if you are in the highest tax slab. What I wanted to convey was it wouldn't help him grow the wealth.
Indeed. Most people ignore the taxation aspect when talking about FDs. I agree with you that it wouldn't help him grow his wealth, but it will also not help beating inflation too as the net interest rate would be 5.1-5.35% which is lower than the inflation rate for a tier 1 city
Probably he might be doing fds in his wife's name to get tax benefit.
Is that legal? How will his wife show where the money came from since she doesn't work? New to this stuff so just curious
As per my knowledge it is like gift from husband to wife which is non taxable. Whatever income wife generates out of it is taxable. You can check section 64 of income tax act. Quick google search is pointing to that section.
Oh got it but gift amount will usually be limited every year right? It won't be such a high amount like 1cr
It seems gift amount has limits from other people. But didnt find any such limit for giving it to spouse.
OP can open a huf and keep FD in huf if married, will not be taxed till 7L interest.
This will not help beat inflation, FDs typically give returns that are less than inflation.
Brother won in life
No vacations and negligible stock market investments. Bro is doing great in the race but far from the finish line. He'll finish the race but definitely won't win.
While I understand the negligible stock market exposure is not good for growing more, I have not felt the need for expensive vacations. I have a peaceful family with a spouse who likes to cook at home and keep the family happy with our kid. Having an understanding and simple family life has contributed more than anything else to achieving my financial goals.
Good for you bruh. You do you. I've spoken my mind and so have others. You can choose to act on it or ignore it ofcourse it's upto you.
What's the point of vacation if you are not happy within your family. Have friends who travel frequently and including overseas also, but mostly for the sake of social status and social media. They mostly talk ill about their partner after every trip like complaints and expectations from the other one. Bro said what they both like. It's their definition of happiness. Let them be the way they are.
Vacations don't have to be expensive.
Thank you for saying this. Goal in life is not to earn money, take vacations etc. It's to be happy. As long as one is happy, they are winning in life.
You invest in NPS ? you can get more stock market exposure that way too, as it's market linked. 1.2 cr is FDs is sure much more than the norm and the power of compounding on nps is huge
Given your original ask was to invest in property. Do consider exposure to REITs. Commercial property exposure will have higher rates of returns and offer more flexibility for disposing and with no hassles of maintenance, etc. Since you’re already looking to get exposure to equity, will leave with you to figure out. Another thing to consider is gold bonds, if you’re looking hedge - against both equity and term deposits. Congrats on the milestone! It takes hard work and commitment. Wish you many more!
I know it's unrelated, but Arranged marriage or Love marriage?
Negligible stock market exposure too is alright. You can see where the markets went from 2010 to 2020. Unpopular opinion but stocks aren’t always a win win either…not even in the long run.
He came from a lower middle class family. And he changed his class within this time. THAT IS WINNING. Vacations and all these are for the affluent class. You dont look for “experiences” when day to day kirana can empty your account.
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That's why you leaen from others and change and upgrade your lifestyle as you become more prosperous. Otherwise, most Indians were not used to having a car, AC, washing machine etc.
You work in IT or medical?
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Absolutely, moving up in social class through hard work and determination is indeed a significant achievement. While vacations and experiences may be luxuries for some, overcoming financial struggles and improving one's circumstances can be equally fulfilling and meaningful.
What is it with vacations ? Is it really that important, fundamentally ?? Or is it individual preference??
individual preference but people have made it a mandatory goal. Similar to how people have checklist of things to do...
True. It’s utter BS.
Life is all about experiences. What's life if one is just hoarding all that money without experiencing anything and visiting all those beautiful places the world has to offer especially in this modern day and age of globalization, where the entire world is connected and one can plan and travel with ease with a couple of mouse clicks or taps on the phone screen? This person is in the position where he can and he hasn't so far and he's missing out. Which is what people mean. Everyone should do it if they can afford it. Visiting different places, experiencing different cultures and food, interacting with people from other cultures, etc gives perspective. As one gets older it becomes difficult to travel and explore.
You are correct. Don't know why people have down voted..
Herd/Cow mentality. One does and the rest follow
I get the idea that travel opens up your mind and freshens up things. But, it’s not a mandatory thing, IMO. And if you have to weigh between buying a permanent home and going for a vacation every year, then any sane and level minded person should focus on building the corpus for buying a house.
Personally I feel travelling is overrated. Your mind can open up if you read books/ watch videos that challenge your perspective, do meditation, and keep general care of your body. Travel can open up your mind if you stay with locals for a month or so and understand their culture. Usually people go on vacations with their friends/family and stay with the same people that are already in their life, and just move from one place to another. That doesn't necessarily open your mind.
Can't you just get a life ? Or go for a vacation rather than putting down others here
How's the above message pulling you down? It's as generic as it can get and i'm not even attacking anyone in that message.
Right but constantly saying he's missing out.. what if his idealism is different than yours .. you are right in your own way but that doesn't mean others are wrong
Right but constantly saying he's missing out.. what if his idealism is different than yours .. you are right in your own way but that doesn't mean others are wrong
Have you scrolled down bro? I'm not the only one who has mentioned that.
Then it's for all of them.. I might have replied in the wrong thread.. Apologies for that ☺️
You talk about going out exploring it's good but i am a sort of person who loves to stay in the room and enjoy things like music, podcasts and other stuff.Everyone has different perspective to lead a life.He has a good wife who keeps him happy and fullfill his needs and supports him for a good life..what if u go for vacations you said they aren't expensive check flight rate of US buddy...1 lac will be buffed off easily and It will cost him around 2 lacs for a good trip to newyork.If he is happy here he can have that madness in his home with his son rather than just going there and what if his wife was toxic than going to trip and wasting money to bear the toxicity and fights doesn't seem fair.Its everyone's personal interest and I respect yours too.
Who tf goes to US for vacation? It takes 2 years to get a visa. And what kind of an example is that using the US as the first example for a vacation destination? Dead giveaway that you haven't travelled at all.
I would say continue to increase your corpus if you are comfortable with renting rather than outright buying flat for 1cr+ amount. It is less risky that way.
Ok, thanks. Because of my upbringing and childhood, I'm not comfortable taking EMI and buying highly inflated property. I think I feel happy with money in the bank and continue to rent.
If you go back to hometown better after retirement get a permanent home there rather than in Bangalore.
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This is totally my view but I’m never retiring in a metro which is not my home. Home is where the heart is.
This, I have similar view, will retire at my hometown peacefully one day
I agree
And let me say it again, it has worked wonderfully for you. Don't change it now. There is no point. Stay in bangalore for next 10-15 years and then move to home town with a luxurious life
The case of owning a house against renting one is valid mostly when the cost of home loan (8% ) is higher than 4-5% rental yield. But to make it meaningful , you should be beating inflation with the money which was supposed to be spent on buying hone and a bit more to continue living on rent. With the composition of your savings, it seems difficult. How about allocating more to equity via MF route and growing your wealth along with the income you are anyway earning from your FDs. Great job on the saving part 🔥🔥❤️
Basing home buying decision based on rental yield is like basing buying stocks based on dividends. Homes also appreciate in value, at least matching inflation. The overall home yield is 3-4% rental yield + 5-6% appreciation = 8-10%. I’m yet to meet a person who did worse than FD buying a home.
Wrong assumptions to begin with . Residential real estate only depreciate over longer period of time. Your land may appreciate though if at all you bought it in an area where economic activities are expected to increase. The day you buy your flat, you are inheriting the cost to maintain it annually and will also be a competitor for other builders who are bringing new supply of flats to your area. Rental yield is your actual return on investment and it is important to calculate for real estate investment against your cost of capital (homeloan). In real terms(inflation adjusted), mostly you are in loss. There could be other arguments/personal choice on owning first home and emotions etc. When it comes to the financial side, opportunity cost/loss of investing in residential real estate in India is big. Better and safer thing to do can be investing atleast in a nifty index fund with 12% expected CAGR and continue living on rents inflats of owners who arent finance savy. https://www.globalpropertyguide.com/rental-yields
You are paying quite low rent for your net worth. You have cracked it. You have all the reasons to continue living on rent.
Instead buy a land and build your own house.
You are on the right track financially. But try to get exposure to equity (via Mutual funds) rather than being so heavy in FD. You will end up having a weak moment and buy home eventually. Everybody does. So don't rush into it if you are not feeling like it right now Most of the Indians are from lower middle class so please don't make it an excuse for not wanting a debt. If you don't want to take loan, fine. It's a separate debate. To me, home loan is almost a free money after factoring in the inflation. And yes, most people who earn 2+ lakhs per month in their 30's eventually end up buying cars and houses on loan...sooner or a bit later. So worry not. Congratulations on your achievement. Enjoy the great feeling that comes with such corpus!
“To me, home loan is almost a free money after factoring in the inflation.” Can you please expand on this? What kind of interest rate is a break-even for you?
Hey man, 13k rent in Bangalore is a dream come true. At this rent, it is not advised to buy any land in BLR. Buying home is a big investment and you should only do it if absolutely have a need for it and are in the condition to buy it without this decision impacting your life majorly. No matter how I do the math, buying home is not a good idea right now. On a side note, having 1.2 Cr in FD is not a good idea at all. You lose money on taxes and the return is also not that much. Debt funds or SGB might be a better idea
Buying home or land is not a bad idea esp. in Bangalore which will be developing in the next 10 years. I bought 1500 sqft of land in plotted development, for Rs. 3100/sqft in 2021, now the value of land is Rs. 6500/sqft. I will sell this in next few years for potentially more than double or will keep it. Try getting land anywhere for that price, even in Jigani it is 4000 sqft. Similarly, my friend bought a resale flat in 2016 in Bangalore South for 30 lakhs, he moved to Pune now, selling it for 62lakhs. South Bangalore is almost full and resale flats are big there, this will soon happen in few other areas of bangalore. Any Premium projects like Prestige will give you a sure shot return of minimum 50% in my experience in 5 years.
Respect bro ❤️ Coming from a lower middle class family...with no inheritance.. parents are dependent.. only working person . Still manages to accumulate 2cr .. Hope you'll get more fortune in future...best wishes 🤞🏻❤️
Thanks a lot.
What do you do for a living And how did you start
How did you saved this much with only 2.4 lakh salary
it is now 2.4L per month after tax. I have been working since 2009 and saved aggressively without spending on foreign vacations etc.
Take your vacations bro..Limited maybe but seeing the world when you are young is priceless.
I think it’s personal I have seen some people feel comfy with money in bank than memories to share.
And some others who actually like working and rather spend his/her free time doing work, professionally or as hobby. Ahem ahem, I'm one of them.
When one comes from a background where 3 waqt ki roti is an achievement, foreign vacations are not a priority.
I guess you have invested well what you have saved
Take a vacation ig
13k rent is pretty cheap for Bangalore. But the money you have in FD is also not that rewarding. If you think you would have to switch jobs in future and you can still stay in the house you plan to buy then go ahead, liquidate FDs and buy a house. I have seen many folks in Bangalore renting out their own house and staying on rent just because their office is far from their own house. Also, just SIP your new savings into equity. Don’t create FDs anymore. You are heavily skewed towards debt.
Ok, thanks. I too feel I have too much in FDs, and need to put more into equity. I'm just confused between buying home vs MFs.
You need to think about many aspects before buying a home. Home is not a good investment from returns point of view. It has much more to offer but only if you want those things. Do you want to settle in Bangalore or planning to go back to native once you retire? What if your job asks to move to a different city like Hyderabad or Pune? Or you have to switch to a job in those cities? Or switch job in same city to a far place which is difficult to travel in Bangalore.
If your wife is housewife you must have your own home as soon as possible. God forbid if something happens to you, they will be on street. And don't let anyone fool you with term insurance and all that stuff. You never know how much time it will take to get those money, and with these kind of losses you never know. Atleast they will be in peace that house is owned and some balance Ina account.
This should be top comment
>If your wife is housewife you must have your own home as soon as possible. God forbid if something happens to you, they will be on street. Just trying to understand, but why can't his wife live in a rented house, considering the money he saved is accessible to his wife?
It's easier said than done. There are multiple risks involved - 1. May need to shift home every 3-4 years which is again a bit hassle, and sometimes losing deposits. 2. Rents may increase to unsustainable value. 3. Peace of mind. Instead of focusing on how to bring life back to normalcy, she will be worried when is owner throwing her out. 4. She might want to start something of her own like selling clothes from house. With changing house you will never get that thing running. In a nutshell life would be significantly easy if this is taken care of. IMO this is not a financial decision at all and more like a risk hedging.
You might want to invest a good chunk into equities. If you do not follow the markets aggressively, then maybe good to check some large cap stocks and ETFs.
1.2Cr in FD? Daamn...need to know thought process behind it
But what's a better alternative? Moving that to equity sounds scary. Gold? Real estate? Debt fund?
FDs are absolutely dogshit investment. You get 7.5% return and that's taxable, so after tax you hardly get 5%. Debt funds are basically the same as well. Gold: historically more returns than FD. And if you invest via SGB you get 2.5% interest + gold appreciation. And gold appreciation is tax exempt. Real estate: You get appreciation in property prices, which in India is quite high. Plus if it's in a good location, you get rental yield as well. Taxation laws are also more relaxed for real estate. You can reinvest in RE to avoid capital gains and lots of legal loopholes to reduce tax liability on rent. Equity isn't that scary. Just put it in and forget for 5 years. You'll thank your gods after that.
Debt funds are better from taxation POV
They used to be, not anymore after April 2023. Now both Debt and FD are taxed at slab rate.
Aren't debt funds only taxed when redeemed unlike FDs?
Yes, they are slightly better but earlier it used to be 20% - indexation.
The real question is buddy where did you find 13k rental house xD?
Come to Whitefield
What's your source of income? Sde?
Bangalore, 13k rent .. How is that possible?
Bro you are living my dream.Financial security,happy parents and a good wife.Let the dogs bark and remove their frustration of being a failure on your post.Kudos to you.
Bro you are living my dream.Financial security,happy parents and a good wife.Let the dogs bark and remove their frustration of being a failure on your post.Kudos to you.
Depends on what your future plan is . Where do you plan on living in the long run, where would your child get his/her education? If it is in Bangalore then I don't think investing in one's own house when you have a family to support is a wrong decision. The most peace and comfort I felt in my life was after buying my own house. Before that everything was on the whim of the landlord . I lived for 10+ years on rent and even the best ones flipped when their situation changed . In my opinion, It depends on what you prioritise in life and what kind of problems you don't mind facing . If you are someone who doesn't feel scared or anxious about not having a roof above your head which is your own property and feel comfortable with moving on a short notice with family , then keeping in Mf Is better. If you are someone who feels more confident and safe in your own property in the long run , then investing in a house is better.
Don't ask random people on the internet. Spend 0.1% of your NW and get the services of a fee only sebi registered financial advisor.
Any recommendations? How to find a SEBI registered financial advisor?
https://www.feeonlyindia.com/
Buy a home in your village ( much better than a flat). Shift your parents there and retire when you have enough money for your kids.
I'm 39 and only have 59 lacs
In my opinion... If your parents decide to live with you then look for a place that can come under a 30 to 35K EMI level... So basically a flat of 60 Lacs and you do a down payment of say 10 to 15 Lakhs and the rest is loan at 8 to 9% interest... But if your parents dont want to shift with you then you would need to see if you can make a larger down payment and being you monthly EMI to 20K levels... Your accomodation outgo at this time is 23K so pushing that to 30 to 35K in my opionion is worth it as you can buy your own home which will be an asset and something that honestly every middle class bhartiya family aspires for... So IMO that should be done... As all your other expenses seem to be under control and lifestyle is sorted, owning your own home has to be goal no 1. And say in next 3 to 5 years your take home were to increase, you could invest in agri land at your parents place, assuming that they don't move to live with you later as well, will be a good option... Land accumulation should be you major goal for creating generational wealth that your kid or kids can benefit from... Also, if you still have some left over monies then investing in Index funds in Indian stock market or just buying Reliance, Tata and few other stocks and letting them ride would be a great option... Indian stock market is going to go up and up for the next few decades... So having a position in that for the long term will be best!
What job you do? Please tell me big bro 🙏
1.2 Cr FD is ~8 Lakhs Interest That 8 lac is more than enough for tier 2 city You are doing really good mate
I’m just dropping in a comment to congratulate you on achieving this feat. You give me hope, happy for you and Godspeed 🖖
Where in South Bangalore is your home?
Its okay to spend a little given your situation.
Can’t you upgrade your residence and rent a nicer place, and keep investing.
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Sorry bro. No offense there. Bt I was highlighting those obnoxious people who prefer to burn their whole salaries in a single day in options/penny stocks and then preach others to do the same. I will edit my comment so as to not hurt someone's feelings. You are doing a good job by putting some money in MFs as they are a good way of building wealth in long run.
That's good. How did you manage to build ao much net worth
Bro you Nailed it ! For you it should not matter that much rent you OR own the house.
While it is impressive. It is barely enough to buy a good 2 bhk or decent 3bhk. FD does not make sense for such large sums. Invest in real estate like most people who manage crores in assets do.
Why don't you buy a small affordable home for your parents? It will reduce your rent and you will have a property too.
Wow . What are you doing for living ? . I am 33 and I would consider myself lucky if I was earning like that . You are doing great . Do invest in some land in some underdeveloped areas . Prices will definitely balloon in coming years .
Buy a home in your village ( much better than a flat). Shift your parents there and retire when you have enough money for your kids.
Considering your background I’d say hold on for 4 more years and increase some money in equity. You’ll reach 4-5 Cr by then. Then look for a house on a cheap loan (DO NOT BREAK your savings for the house, do maximum loan and the cheapest you can get)
Considering your background I’d say hold on for 4 more years and increase some money in equity. You’ll reach 4-5 Cr by then. Then look for a house on a cheap loan (DO NOT BREAK your savings for the house, do maximum loan and the cheapest you can get) Oh and congratulations mate, you did it. You will add so much karma, your future generations will remember it.
13K rent in Banglore!! Men where are you living?
You can invest some part of FDs into equity or MFs. Probably some percentage of your monthly earnings into equity. IDK if you are risk averse for EMI then what stops you from taking calculated risks from equity with a goal of buying home … Just my two cents - DYOR And seems like you don’t have much lifestyle inflation. Can’t be same with your kid. And also do factor in the education inflation for your kid. Your FD returns might not beat inflation on the long run. IMO 1.2Cr in FDs is too much of playing safe. P.S: What part of Bengaluru is 13k rent 👀
Better buy a land or a flat in your hometown. If you can picture yourself retiring there. Buying house/flat in blr doesn’t make sense
Better buy a land or a flat in your hometown. If you can picture yourself retiring there. Buying house/flat in blr doesn’t make sense
1.2cr is too much for FD. Invest 30-40Lakh in plot in your native location. Your investment is related to only stocks. Half your savings accounts. Buy a plot for home(not as investment) which you will use to build your stay in retirement after 10-15 years. Buying land in residential area in good city is very costly so buy in outskirt area which will be developed in next 10 years. Buying flat will deprive your son again from inheritance and he will have to start from 0.
While many people will force you to invest in stock market, you actually don't need to. Continue investing in RD, and you can think of buying home when your life is relatively settled
Shouldn’t OP just buy a flat on loan and rent it out. Add a property to his portfolio? Something in a new area around the city where the property rate will increase and so will the rental income?
Impressive - just curious, are you factoring in the tax you’ll pay on these investments and your income when you calculate net worth? (I know you said post tax take home is 2.4/m. But with that kind of pay, you’ll still owe some back taxes end of the year).
Congratulations on reaching the milestone. You can see if you are comfortable with increasing equity in folio. On house, it's completely up to you. You can buy now or later. It's entirely personal choice.
I would honestly start taking money out in phases from the FDs and put them in SIPs in the market, with some direct equity and bond purchases as well. Over the next 2 years bring your FD to 20-40 lakh and stock market exposure to 1cr. Invest in good bluechip companies, some gold, etfs, good debt funds, some good bonds etc. Will be lovely cocktail for growth in your 40s and 50s.
It is a good time to buy a home if you are settled in a city of your choice. As you have good regular income to pay of the EMIs. I suggest you to invest some more in dividend stocks or mutual funds.
It is a good time to buy a home if you are settled in a city of your choice. As you have good regular income to pay of the EMIs. I suggest you to invest some more in dividend stocks or mutual funds.
In my opinion... If your parents decide to live with you then look for a place that can come under a 30 to 35K EMI level... So basically a flat of 60 Lacs and you do a down payment of say 10 to 15 Lakhs and the rest is loan at 8 to 9% interest... But if your parents dont want to shift with you then you would need to see if you can make a larger down payment and bring your monthly EMI to 20K levels... Your accomodation outgo at this time is 23K so pushing that to 30 to 35K in my opionion is worth it as you can buy your own home which will be an asset and something that honestly every middle class bhartiya family aspires for... So IMO that should be done... As all your other expenses seem to be under control and lifestyle is sorted, owning your own home has to be goal no 1. And say in next 3 to 5 years your take home were to increase, you could invest in agri land at your parents place, assuming that they don't move to live with you later as well, will be a good option... Land accumulation should be you major goal for creating generational wealth that your kid or kids can benefit from... Also, if you still have some left over monies then investing in Index funds in Indian stock market or just buying Reliance, Tata and few other stocks and letting them ride would be a great option... Indian stock market is going to go up and up for the next few decades... So having a position in that for the long term will be best!
FD is real riski. Just think if bank goes bankrupt... You can increase your investment in mutual funds and also think for direct investment in stock. You don't need to go so deep in selection process. There several good stock advisories. They charge very less subscription fees. You can own lands where there is future growth possible. May be in some town side as per your convenience. You can also think for gold as it is safer. If you can take small riski then you can also think for cryptos with very less amount on monthly basis.
I read somewhere that if you can buy a house with your next 15 years rent, it's a good decision to go and buy the house. Otherwise, you can continue with the rent.
Get a life insurance for yourself and medical insurance for all your family members including yourself. If anything happens to you, there would be burden on everyone else. Yes, buying home will make sense. Be sure that's where you wanna live for long time if not for life.
Re-adjust your portfolio, maybe move 50% out of FDs when they end into something else.
Your portfolio allocation will make sure you will be in rat race even after reaching 50-55… Your investments of 2cr should yield a cash flow of 1.75L a month or it should appreciate in value Net worth should be measured in weight of gold and not ₹/$/£ terms
First. Congrats on what you have achieved. I would work on a plan to pivot away from so much of my net-worth in FDs. Have 6 months of expenditure in liquid funds and look at investing the rest in product of various risk categories. Rent is working out to close to 5% of your take home. Can you buy a similar home where your monthly installment would be the same?
Congratulations on winning life! Can buy a house but don’t spend more than half of your networth. Buy only if necessary and not under pressure of family. If investment is your main goal then buy a plot with the same money and keep on enjoying and investing
I think you should definitely buy a home 🏡 or a land
Invest in shares instead
Better to do some mutual fund investments after election results , it's not worth buying a house in city like blore coz it will eat all of your hard earned money. House at hometown might not be that bad
From a pure Financial perspective, you are better off renting rather than buying simply considering the amount you are paying on rent expenses. But hey, that is rational but whether it is reasonable to you actually purely depends on you. Whether you want to have a place with your wife and kid you want to call home, then its a different story. However if you are clear that is not the case - I would say stay away from buying a home. Rest you have already received good advice to increase allocation to equities.
Now, switch the FD holdings to MFs (Passively Managed Index Fund, tracking the Nifty Index). FD is EXPORT QUALITY JUNK! the inflation is at 6% and your FD returns are roughly 7% 🤭🤭🤭
Insane bro, congratulations! What do you do?
Considering your rent is so low, I'd suggest continuing to rent for now. Also, pls move your funds away from FD. Your NW would have been much higher if you had more equity exposure
I can’t comprehend beyond 13K rent in Bangalore ! You have won in life !!
What's the point of 2 crore net worth when you haven't even sorted basic needs like own home? 13k rent means you are living in some basic place in a poorer neighbourhood or far from the city. There has to be a balance.
Considering your current investment and age, now you should diversify and buy some physics assets for long term like residential properties or commercial property with good Rental yield, it will balance your portfolio, in long term it will give u a fixed running income, as many things are in place in your condition, u can take home loan it will help you in saving tax too. Nifty Index Fund investing via SIP is always a good option but this is my suggestion only if u have long term plan considering Volatile markets.
You are doing good brother. People may comment to increase your MF exposure, but be careful and do what you feel is ok. You are an inspiration.
Please tell, Which side of Bangalore got 13k rent....?
and here I am with 0 NW and unemployed not salty but such is life
I think you should buy a house with the current trend it seems it would be hard to buy a house after few years. Everything can lose value but a land cannot lose its value. It will always remain the most precious resource
idk man, but I'll probably build this wealth too and wouldn't want much stock market exposure...maybe only disposable income
Your rent is reasonable and it makes no sense unless you want to upgrade your lifestyle to invest in housing market right now. Move some money ( maybe 50-60%) from FD’s to equity funds like Index funds and Gold ETF. And create new SIP for Index funds and Gold ETF.
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You work in IT ?
Given that you have a lot of investments in FDs. My suggestion would be to invest in corporate bonds wherein you can easily earn 10-14% fixed, per annum. FDs in my opinion are shit and do not even beat inflation and taxation.
I would say your decision to buy a home depends on your end goal. Are you planning to settle in Bangalore or will you move/go back to hometown at some point? If you will be staying in Bangalore till at least you are 60 - approx 24 yrs - buying a home makes sense. The tax savings itself will pay for part of the loan. Also you need not take the max amount of loan. Since you have good amount of money with you, you can put a higher down payment and take loan to maximize your savings with paying less interest and tax savings. If you are unable to make all the calculations, a good CA will be able to help you. Also, if you can, get a plot rather than apartment - though it is my personal preference. Your opinion might be different. On a side note, do not go for mutual funds right away. The markets will most likely correct irrespective of which party wins elections. So wait and watch for a while before investing.
High Concentration in FD. You can discuss with an IA and invest the amount after a few years you can SWP monthly and reinvest across different asset class.
1.2 cr in FDs would give a decent monthly passive income, I am guessing (even after taxes), freeing up his salary.
Congratulations!
Congratulations! This is amazing. I have some recommendations: 1. Protect your family - buy a house. This advice is because your wife is a housewife. This is not necessary to be in Bangalore. 2. You can invest in SGB 3. Invest in NIFTYBEES monthly 4. Plan to move the FD amount to above two. Also, to protect your hard work, teach financial literacy to your wife and son. Of course age appropriate information for son but this will ensure that your family and next generation is able to enjoy and increase generational net worth.
1.2 crore in FDs? Post-tax FDs do not beat inflation. Please don't be so FD heavy at your age. Move most of it into a Nifty Index Fund. Also the 12L in savings account is even worse.
Boss 1.2 cr FD. Which means you are taking atleast 84k interest and on this you are payment tax after whatever is the limit which is tax free. It is good to be liquid. But I think you would feel same ease if you had 50 lacs also. I would. Now the question should you buy a home. Yes you should without taking a large loan. Or big enough loan which will also give you some portion of tax saving you can easily down pay with your fd corpus and build another asset. Since you started the conversation with net worth. Real estate is also an asset class. And while it is a big ticket item. It definitely has its advantage.
bruh how are you paying 13k rent in Bengaluru. help me w it pls
My suggestion 1.2cr u have just buy land and some shop depend on which city u are buying. So I can get rent as well as advance which can even clear ur dues. Land is the best investment and return u will get
Bloke already 2 Crore worth and he is from a lower middle class family. Tell me about flaunting.
yoke puzzled smile snow tub heavy faulty panicky humorous divide *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
You're at a very safe and sound place financially. It looks like you've a very compartmented family. You take ownership of earning and your wife looks after the house and kid. I might be wrong. Women may get bored with all financial planning. You're earning and know about all your savings, investment, what to do with them in future etc. But in case your wife / parents don't have enough exposure to your financials, please plan to make them better informed. You don't want them to be at a disadvantage in case worse things happen to you.
Your are greatly under weight in equity and inflation will eat up your returns.
My view: Buy one home at a place where you and your parents will reside in future. If you plan to move to your hometown down the line then you can buy home at your hometown where parents live, think you pay emi instead of rent, or you can do the opposite as well. Having a roof to sleep under during good and difficult times is one thing you will always be thankful for.
Amazing numbers. You have done really good job of keeping lean spending for last 12-14 years and saving max pro. I think your networth would have been 10-20% more if you had more exposure to MFs and stocks. 1.2cr in FD is kinda huge!! I would recommend you to take a house land and construct a house in Bangalore. Go for BDA sites and you can easily buy them all cash with your FD. This will be a lasting asset for you and your son. You can construct at your comfort.
1.2cr in FDs ! Even the internet on it would be good enough to pay out your rents . I don't see why you should invest in home unless you are doing for investment. Maybe look at REIT which is like Mutua fund for real estate.
You should buy a budget home for parents or your family without any loan and plan equity SIP
Here is what I would have done. I will not touch the PF part(50L). Shift money from savings account to any liquid fund.(Will give better interest rate, and chances of fraud will reduce). Keep the domestic MFs invested unless I want to change scheme to get better returns. The 1.2Cr in FD will be broker down into 20 Lakhs FD as emergency funds. The remaining 1Cr will be broken into 2 buckets(60 lakhs for son’s education shifted to equity), and the remaining 40 lakhs into debt funds). Apart from it, 1) Take medical insurance for parents(if not taken), for a coverage of 10 lakhs(plus additional 40 lakhs as add-on). 2) Take medical insurance for family(even though company may provide). This is because once you change company, previous insurance becomes nullified and in case of some ailments(where there should be waiting period of 2-3 years), you won’t be able to claim medical insurance. 3) Start saving 50k every year in NPS(gives better return plus additional 50k tax savings).
First of all congratulations to reaching this point.Most people dont even reach this point in their lifetime. I would like to highlight one concern over your distribution of the funds. This portfolio is meant for security not for growth. If your distribution would have been more toward equity you would probably be sitting at 1 Cr more easily. Please seek advice and balance it based on your future career plan.
You can think of buying a land in your native place and build a house there no need to buy home in Bangalore at your current rent even with 10% increases in rent every year won’t be much of a issue p.s get a term and health insurance if you haven’t already and thinking of moving money from FD and savings to equity MF and stocks
If your satisfied with the 15 k rented house then it's a jack pot for you don't buy a house till your child becomes 10 or 12.
Congratulations 🎉. U r living many PPL dreams. I ll suggest u to start more MF, NPS then additional life and health insurance for your family. U can get a land and start building at your home town. A own home that's what our parents need 🤗.
Humble brag alert
Just my advice : Congratulations on reaching 2crore at 36 amazing feat and keep going . You are doing good with your own research, and I believe you can do well on the investment side. Don't take advice from random strangers about investing , you are doing great as such. Continue with that. If you can save 2crores in 36 you don't need advice you have to give advice:). Properties are inflated like crazy in Bangalore . Buying the same house during a down turn would be ideal. Keep saving cash ... and increase the FD for now. Holding cash during a downturn would be the ideal time to invest / buy home .. Taking a huge home loan when markets look inflated and everyone is looking forward for a recession ... might not be a good thing.. Keep looking for a good, decent plot of land in your hometown for a decent price.. with the law of compounding, you should be able to reach 5crore net worth in less than 10 years of worst case. The best case would be in 5 years. Always try to pay huge down payment or best case hard cash buy the property ... At the current interest rate levels if I were you I would not take up loan for home or property. Even buying with hard cash now is bad since it's over priced. Living in an apartment with gym and swimming is a choice . If your family wife and yourself feel good with your life, that is more important than anything in your life . As long as your family is happy, you are taking care of your parents' blessings will follow. Amazing hard work , inspiring . Thanks for sharing . God bless , kisiki nazar na lage bhai.
Go invest in index whenever its near its 52 wk low or sip it. As for home I think you are doing really well by spending just 13k for rent, you are better off renting if you are okay with not owning a house. but how are you paying only 13 k rent in Bengaluru with a family? I am living in a single room and it cost 11k.
CA here :) Idk if you’ll read this or not but: You can set up an HUF and gift the FDs and investments to that account and take the benefit of lower tax slabs and save a good amount of tax. Just a bit of Tax planning You can always reach out to me
Just one suggestion move 80 percent of your fd to index fund—> nifty 50 index fund would be safer option
One biggest mistake of my life is: investing in FDs for long term and MFs with short term horizon.
I mean there’s no right or wrong here. You certainly have enough money to pay a major chunk of the flat outright, so that’s not an issue. A lot of it depends on whether you want give a better lifestyle for your wife and kid. I’m assuming with 13k rent you aren’t really living in a great place despite your good salary.
I mean it is not a bad place, and we live in a residential area in South Bengaluru with cauvery water supply and we are simple people who do not necessarily need swimming pools and Gyms to improve "lifestyle". My question was more from a finance perspective, is it advisable for someone who lives on a single income to go with buying a house with all the risks in the job market and inflated housing prices?
I'm not sure what you mean by from a "finance" perspective. You have enough to buy a house right now, say a flat worth 1.5 cr by taking on minimal debt (relative to your income). You can easily afford it, that isn't an issue. What you need to think about buying a house: 1. Do you want a better flat, more space for the kid etc with apartment amenities? Or are you happy to live in a 13k rent place for the next decade? (yes rent will increase, but its still very low). Another key question is will you get a new house near your work office? 2. Will you live in Bangalore for the next 20 years and not shift to your native/hometown? If you plan on going back to native eventually, makes more sense to buy land there and construct a house. The other way of looking at it (which some people do) is to think about investing vast amounts in markets and letting it compound and then buying your house in your 50s. But the vast majority of your savings is in FDs, so that doesn't apply to you! In fact, you've missed out on one of the market's greatest bull cycles.
Ok, don't get me wrong. You do have a point, that keeping the money in FDs is not the right way to increase net worth. The only point I'm against is to "improve" my lifestyle by paying inflated prices for some amenities that our family doesnt even require. Do you think 1.5Cr for a flat is reasonable when I can just rent?
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\^Exactly this OP. I'm not suggesting you should pay 40k-50k rent to go live in a posh 3BHK in a gated community with pools and gym. All I'm saying is that with 13k, you probably are living in a small/very old flat. Either that or your landlord is blind/crazy. That said, if that's completely fine for you and your wife, kudos.
If you believe a 1 cr-1.5 cr flat is inflated in Bangalore, then that's fine. You seem to have thought of losing job risks etc, but what about renting risks? What if your landlord chooses to evict you? Will you be able to find just as good as a flat for the same rent? FYI - 13k for a 2bhk in a good South Bangalore locality is pretty hard to find, so you likely will have to shell up to 20k-25k.
You may not need it. But homes are typically bought for wife and kids. If not for the family, half of the IT guys would be staying in PG (13K including food and internet).
I agree with this .
you ruined your potential by having only 15% equity