First of all, I'm really grateful to be in this position – it's a privilege. We're a family of four: me (31), my spouse (31), our 7‑month‑old baby, and my dad (66). Our total post‑tax household income, excluding ESOPs, is about 10 L per month.
Our major monthly debt:
- Housing loan – 70 K
Total monthly outgo, including loan, insurance etc., comes to roughly 2‑2.5 L at most.
We usually invest up to 50 % of income – about 75 % in equities and the rest in commodities and debt – but since the start of this year the investment rate has stuck at 2.5 L, which is about 25 % of income.
Our current assets: mutual‑fund portfolio worth 1.5 cr, land worth about 70 L, and the house we live in.
The problem is that cash is building up fast and I expect an extra 7 L per month coming in. I'm not sure whether to put all of it into mutual funds with the same split, and I also like having liquidity, so I'm hesitant about more real‑estate.
If you were in my shoes, how would you invest this extra 7 L?
P.S. I've already bought an OLED TV, a Dyson, etc., and I do feel like upgrading lifestyle a bit, so any suggestions there would help too. Normally we keep lifestyle creep in check, but these purchases are more emotional and fairly functional.
Edit –
1. I have a term insurance cover of 10 cr.
2. My wife, I and our child have medical insurance worth 1.2 cr outside the company policies.
3. My dad is covered under my and my wife's office insurance.
Genuinely one of the more interesting problems to have and you are right to pause before defaulting to more MF in the same split.
The cash‑accumulation anxiety at your income level is actually a structural issue more than an investment issue. 7 L a month piling up means decisions get delayed and idle cash earns nothing. Before the allocation question, set up a simple sweep: anything above a fixed float, say 5‑6 L in your account, auto‑moves into a liquid or arbitrage fund. That stops the accumulation problem immediately and keeps it accessible since you value liquidity.
On deploying the 7 L monthly, given you already have 1.5 cr in MF and a property, adding more to the same equity split in MF is not wrong but it isn't the most interesting use of this capital either. A few things worth considering depending on what resonates.
If liquidity is the priority, arbitrage funds and short‑duration debt for maybe 1.5‑2 L of the monthly surplus give you a liquid, relatively tax‑efficient parking spot that is not sitting in a savings account doing nothing.
For the equity portion, rather than just increasing existing SIPs, this might be the right level of corpus to start looking at PMS or AIF for a portion. Minimum tickets are typically 50 L for PMS. If you are comfortable with a 6‑12 month accumulation in a liquid fund and then deploying, this adds a genuinely different layer to what you already have rather than more of the same.
On the ESOP angle you mentioned in passing, if these are unvested or have concentration in one company stock, that is a separate risk worth planning around before adding more equity exposure elsewhere.
On the lifestyle upgrade question since you asked directly: at 10 L post‑tax with 2.5 L expenses you have already won the income‑versus‑lifestyle ratio battle. Spending 1‑1.5 L a month on things that genuinely improve your daily life is not lifestyle creep, it is appropriate use of money at your stage. The OLED and Dyson are not the problem. The question worth asking is whether the purchases are filling a specific gap or just filling time. Business class on a long‑haul trip, a really good family holiday once a year, a meaningful experience for your 7‑month‑old as they grow – these tend to leave more than another appliance upgrade. Spend on experiences and time before objects is a reasonable heuristic at your income level.
One gap in your post: no mention of term‑insurance adequacy at 10 L monthly income and a young child and a 66‑year‑old father in the household. Worth confirming that cover is sized right for what the family actually needs to sustain itself.
Disclosure: Mutual Fund Distributor working with salaried professionals on goal‑based financial planning.
Congratulations on landing high‑paying jobs and now facing this surplus‑cash dilemma. The first step is to set clear goals and adopt goal‑based investing. Knowing whether a target is 10+ years away helps you decide on mid‑/multicap mutual funds, while short‑ to medium‑term goals like travel or a car upgrade can be matched with suitable instruments. Remember, goals before instruments is the key. Let your corpus compound over time. All the best!
If you're an HNI, you should reach out to reputable fund managers. Free advice on Reddit can hurt your capital.
There are many ways to invest the 10 L per month – congratulations!
1. Keep investing in MF, you've been doing it for 10 years.
2. Continue with gold, you have 12 years of experience.
3. Real‑estate has given good returns so far – plots and agricultural land are options.
4. FD's are safe bets.
5. You've been in the stock market for a decade; lump‑sum MF can give good returns but remains risky.
6. Govt bonds are yet to be tried.
Looking at your portfolio, you could also explore tier‑2 or tier‑3 city sites, or consider agricultural land which could be a lifesaver for future generations.
Why aren't you considering pre‑paying the home loan?
Even I would love a problem like this – what fields are you all working in?
I'm not an expert, but find an NGO that aligns with causes you care about and contribute. It can give you a kind of fulfillment that money alone can't buy. Just my two cents.
Besides all the advice, I'd suggest sponsoring the education of a couple of under‑privileged kids – it costs barely 20 k a year. All the best!
If you're serious about this, make an effort to get a wealth manager rather than just posting for the sake of posting.
God, please give me a problem like this – I'm tired of being happy and poor. /s