I am a 41-year-old PSU bank employee drawing a gross pay of ₹1.8 lakh per month. I live in a company leased accommodation and receive perks of approximately ₹30,000 per month. My family includes my spouse (also employed at a similar level), our 13-year-old son and my parents (both above 65 years with no source of income). All our medical expenses are reimbursed by my employer.

My monthly expenses are approximately ₹25,000. I have ₹30 lakh in a bank fixed deposit, ₹2.5 lakh in a savings account, $65,000 in USD checking account, shares and sovereign gold bond worth ₹10 lakh, mutual funds of ₹21.57 lakh (systematic investment plan of ₹5,000 in SBI Consumption Opportunity Fund, ₹10,000 in SBI Small Cap, ₹2,000 in SBI Magnum Global Fund, ₹1,000 in focused equity fund every month), besides ₹16 lakh in PPF (public provident fund). I also own two flats, one of which is valued at around ₹50 lakh (possession pending), while the other yields a monthly rent of ₹15,000 and is valued at approximately ₹65 lakh. I have a housing loan of ₹18 lakh and car loan outstanding of ₹10 lakh. I have term plan cover of ₹1 crore. How should I invest my funds for better returns.

-Name withheld on request

Debt and real estate form nearly 88% of the assets. You have a long way to go for your retirement, a bit of rework on your asset allocation can help you build a better portfolio. As you are working with a bank, there is a possibility you would have got loans at a discounted rate. However, you can try to reduce the car loan if the interest rate is high.

Parking more than required in fixed deposit and USD could be counterproductive unless you have any immediate plans for it. You can diversify a part of both these avenues into equity mutual funds to generate better returns after keeping aside some amount as contingency fund in fixed deposit.

At present, you are just investing ₹18,000 per month and there is a huge potential to increase these SIPs. You can start.

The mutual funds you are investing in can also be across different asset management companies as at present all your SIPs are with just one company. This will help you reduce the risk of being over-dependent on the performance of one fund house or fund management team.

You can consider adding SIPs in some of the funds like Parag Parikh Flexicap Fund, HDFC Flexicap Fund, 360 One Focused Equity Fund, Kotak Equity Opportunities Fund and PGIM India Midcap Opportunities Fund. You can also gradually invest lump sum amount from your fixed deposit and USD if you plan to do so in these funds.

You can also try to re-evaluate your insurance coverage which is at present ₹1 crore. This cover is much lesser considering your earning potential and years to retire.

Harshad Chetanwala is co-founder at MyWealthGrowth

Updated: 17 Aug 2023, 11:42 PM IST