Where to invest lump sum of 16 L?

[helmi]

@jazzman87 I am just 24. I don’t want to play as safe as putting it all in FD yet.

 

[jazzman87]

@helmi Then wait for some time till there's some correction and do a lumpsum investment. But break 16L into 4 sets of 4L and put it in 4 different MFs

 

[helmi]

@jazzman87 Noted. Where to put it in until then? Hybrid funds?

Also Shall I start a SIP of 15k in Parag Parekh hybrid fund after paying off education loan ?

 

[jazzman87]

@helmi Since u r willing to take risks, u can put like given below

Quant Smallcap fund - 4L
PP Flexicap fund - 4L
(*) Midcap fund - 4L
(*) Nifty50 index fund - 4L

 

[helmi]

@jazzman87 Thanks a lot. But I was also asking where to put it until correction. Which maybe in a few months or even a year

 

[jazzman87]

@helmi U can keep it in some liquid fund till then. Might be a boom will happen after election results. So if u wish u can invest now itself

 

[jazzman87]

@helmi Or u can try 15k into motilaal Oswal microcap index fund. High risk & high returns

 

[helmi]

@jazzman87 Ok. Will look into it. Thanks. Really appreciate all the advice

 

[jazzman87]

@helmi Welcome

 

[lyanveness]

@helmi You have only seen bull markets my friend. 8 percent after tax paid loan is much better than index funds

 

[helmi]

@lyanveness Not really. In 2022, my US based RSU got a correction of 35%. Also you’re looking at it at a really small time frame.

Over a period of 15 years, even 4.5% average return rate is better than paying off the loan. Check this comment: https://www.reddit.com/r/personalfinanceindia/s/wRP4gMR3wh

Also I don’t expect stock market to stay crashed for more than 2 years in the near future. That to happen simultaneously with me also being jobless for 2 years seems unlikely.

Also the home I have loan upon has already appreciated 50% in last 3 yrs and worth 1.8 Cr now.

 

[lyanveness]

@helmi Thanks for the gyan bro. If you are not open to suggestions don’t ask. As a very successful person I suggest to first clear debt . It is upto you. I was there in the US during the 2008 crisis and you won’t believe the number of people that lost their stuff. Also finance Is not only numbers. It’s also discipline. You clearing debt has much more successful impact on your financial discipline to rely less on debt and make sure you pay off loans which are the worst

 

[helmi]

@lyanveness Thanks for the suggestion. Not planning to close the home loan atm but I understand where you’re coming from and will keep your advice in mind

 

[jazzman87]

@helmi It's always advised to have nil liabilities and have obly assets.

 

[helmi]

@jazzman87 I’ll pay off the education loan.

But the home loan, not yet. I am getting good appreciation on the land so far. It has already appreciated 50% in 3 yrs. it’s at a good location. I am expecting similar application for a few more years at least

 

[helmi]

@jazzman87 Why in a bull market tho? When I can get great returns on my lumpsum?

 

[healing1234]

@helmi Prepay your home loan to ultimately reduce interest. Imho, home loan is a vicious cycle with fluctuating interest rates and you may end up paying more interest eventually. Yes, equity does seem lucrative with the returns it offer, however, it does come with repercussions. Markets move in cycles and may go down for months or sometimes years (refer great depression 1929 us market and corresponding indices). If I were you, I would pay off loans for peace of mind.

 

[helmi]

@healing1234 I get that. It’s just that my dad is planning to put around 40-50 L in FD and I have 10 L emergency fund too. So if worst comes to worst, I will be able to pay the home loan emis by burning the cash