Where to invest lump sum of 16 L?

[helmi]

Recently sold a couple of my RSUs. Of around 16 L

Where should I invest these?
1. Parag Parikh and Nifty 50 (8L each)
2. Equity? If yes, any stocks suggestions?
3. Shall I also put some in FDs ?

Current investments:
1. 23 L RSUs (unsold)
2. 9.6 L in MF(PP and UT 50)
3. 9.5L in equity
4. 7L(have given to Dad to put in real estate)
5. 19L cash(including above 16L I wanna invest)
6. 4.2 L in 2 FDs as emergency fund
6. ~10 L in PF

Liabilities:
1. Home loan(46L principal pending- EMI: 45k )
2. Education loan(Principal left-2.5L EMI:15k)

 

[oby]

@helmi Dump it into debt funds and then discuss with an advisor.

 

[helmi]

@oby Are they any good? From my friend’s experiences they aren’t that good

 

[oby]

@helmi I suggest you find one.

 

[pepperbites]

@helmi Pay off your Education Loan and utilise those additional 15k per month in something else dude.

 

[helmi]

@pepperbites But it’s just 8.5% interest rate tho. Why pay it off? I am getting >15% on my equity and MF. And 25% yoy average on RSUs for past 3 yrs

 

[pepperbites]

@helmi You can put that ₹15k into small/mid cap funds that would perhaps make wayyyyyy more than 8.5% than you are paying to the bank now.

Plus the lesser the debt on you, the more you are able to take risks with your money.

 

[helmi]

@pepperbites Agreed. So why not put 2.5L lump sum of the principal on those small/mid cap funds?

 

[pepperbites]

@helmi Sure. That could be a way.
If I were you, I would close my loans quick and then use my money in whatever avenues I can see fit.

 

[helmi]

@pepperbites Yes. We have a bias of paying off the deb cuz it’s mentally stressing.

But if you think logically, it doesn’t make sense. Check this comment of mine: https://www.reddit.com/r/personalfinanceindia/s/AWIvFF8xDb

 

[pepperbites]

@helmi See, you make all the sense on Excel.
No denying.

But sadly, Excel doesn’t capture mental freedom or the probability of spotting a good buy opportunity later.

Even if I close the loan and that ₹15K is guided to a liquid/arbitrage fund per month to create like a investment kitty, and when there is a market drop deploying that extra cash into a good fundamental stock or a consistent mutual fund, I put it there.

But then again, this is all individual choices and mindsets we are speaking of.

 

[helmi]

@pepperbites Also my annual salary is 80l+ atm. Even though job security in IT sector is not guaranteed anymore. But even if I don’t loose job for atleast 5 yrs.

Loans of 50l shouldn’t be much of an issue in case of an emergency like stock market crashing

 

[pepperbites]

@helmi Then maybe I have a thought. Hear me out.

Pick a good balanced/hybrid equity fund and start putting in it. This acts as your buffer/job-loss money. They give good 13%+ returns.

Once a good kitty is reached from this corpus in a couple of years, and you still have your job, start a SWP from this to fund all EMIs.

So your salary becomes fully available to you to invest anywhere.

 

[helmi]

@pepperbites I am investing monthly in Parag Parekh flexi cap and UTI nifty 50, 25 k each. They no good?

But I agree. I can atleast pay off the education loan. That extra deduction of 15k from my salary doe’s feel limiting sometimes

 

[pepperbites]

@helmi They are good. These are the ones that help you grow your wealth. Keep investing.

But a portion of your investments should be to preserve capital. That’s what 1/2 funds with a corpus would allow you to do and pay off EMIs if need be in a rainy day or anything.

I am myself building a strong position on a balanced advantage fund and will do a SWP once a good corpus is reached. That would be to fund all my regular bills and EMIs if possible.

Salary would be fully dedicated to growing my capital.

 

[helmi]

@pepperbites How are balanced/hybrid funds or advantage fund you mentioned different than your regular MFs?

 

[helmi]

@pepperbites

Plus the lesser the debt on you, the more you are able to take risks with your money.

That’s true tho

 

[jazzman87]

@helmi First close ur loans n then invest....

 

[helmi]

@jazzman87 Why do I need to close my loans? When I can invest that lump sum to earn more

 

[jazzman87]

@helmi Or if u want ur capital to be safe, keep that 16L in FD and invest the interest in some smallcap funds for high returns