I am a retired government official. Please guide me regarding wealth investment schemes. I need an amount of Rs 7 to Rs 10 lakh within a span of 5-7 years. How much should I have to invest in and in what instrument to achieve this? — SVR Prasad
Five to seven years is a good time span and you can create a good corpus in this time period. First things first, it is good to keep a certain part of your income for emergency. At your age, requirement for medical and other reasons will be very high and it is good to have a fund to fulfill this requirement. To receive Rs 10 lakh in 7 years, you need to invest Rs 8,000 per month in a combination of equity and debt mutual funds. You should invest some part of your fund (Rs 8,000 in this case) in equity mutual funds and some part in balanced fund. Equity mutual funds invest their major part in equities and hence they provide better return in the longer term. Typically, equity mutual funds provide a return of 12-18 per cent CAGR over longer time. The other fund is a balanced fund which invests a part in equity and a part in debt. This means, there will be lower risk than the equity mutual funds but the prospect of returns is also low. Balanced funds, in general, provide a return of 8-15 per cent. By dividing your money in both funds, you can get a return of 11-12 per cent over 7 years which will build about Rs 10 lakh.
We had booked an apartment in Chennai in January 2012, which was slated to be completed by April, 2014. We paid a booking advance of Rs 50,000 and then the first installment to the builder. However, we are yet to sign the construction and sale agreement. I would like to withdraw from this project. How can I go about it?
Frankly speaking, withdrawing from a real estate project is extremely difficult. The agreement that you sign with the developer typically has no clause which allows you to withdraw from it. You may not be able to recover your money. As per your query however it appears that you may not have signed any agreement yet that indicates your actual purchase of the property. This could either work for or against you but either way it is unclear if you can get out of the situation without any loss of funds. If the builder is not ready to refund the amount, then this decision is best consulted with a lawyer as this is more a legal issue than a financial one. There could be legal aspects that could help you out of this situation.
—Expert advice by Adhil Shetty,CEO, Bankbazaar
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