Best MIP (Monthly Income Plan) Mutual Funds

[life2007]

Hello Friends !

I am in need of generating regular monthly income to meet my family's monthy expenses.

I have been given two choices.

1) Invest money (max 3 lacs for single & 6 lacs for joint ac) in the Post
Office Scheme at the return of 8% interest which is divided equally and
paid each month.

2) Invest in a good MIP and expect returns at least 12%.

At the first glance, it appears that answer to my question is available in the question itself. But I am confused because, here we are talking about a steady income failing which I will have to use the principal amount which means eroision of the capital.

In order to set up a deadline to generate MIPs, I am trying to accumulate enough funds to invest at one go (if Post Office is decided). So at present taking short time FDs for one year / 6 months . The planning is being done in such a way that all these FDs are matured at a particular month next year so that I will have the BIG amount to put in the MIP. Please suggest if there is a better idea.

Please advise.

Thanks & Regards

Jeet

[shreyadr]

dose postal MIP's offer any tax benefit ? if yes, how much ?

[mrindia]

Originally Posted by life2007

Hello Friends !

I am in need of generating regular monthly income to meet my family's monthy expenses.

I have been given two choices.

1) Invest money (max 3 lacs for single & 6 lacs for joint ac) in the Post
Office Scheme at the return of 8% interest which is divided equally and
paid each month.

2) Invest in a good MIP and expect returns at least 12%.

At the first glance, it appears that answer to my question is available in the question itself. But I am confused because, here we are talking about a steady income failing which I will have to use the principal amount which means eroision of the capital.

In order to set up a deadline to generate MIPs, I am trying to accumulate enough funds to invest at one go (if Post Office is decided). So at present taking short time FDs for one year / 6 months . The planning is being done in such a way that all these FDs are matured at a particular month next year so that I will have the BIG amount to put in the MIP. Please suggest if there is a better idea.

Please advise.

Thanks & Regards

Jeet

Hello Jeet!
i am sailing in the same boat. the idea seems to be 'safe' n logical. but instead of all FDs, i plan to include short-medium term gilt/debt funds to acumulate money for PO investment. although this choice is little riskier.
other members' views welcome.

mr india

[mrindia]

Originally Posted by shreyadr

dose postal MIP's offer any tax benefit ? if yes, how much ?

No tax relief in this scheme.
mr india

[life2007]

Hi Mr. India..

Good to know.. you are in the same boat. Hope we ride smoothly to the shore

Ok, As you already know, I have started investing in MFs since Jan'08, I would not like to further expose any further amount other than the planned SIPs in the same route i.e MFs even if it is gilt or debt funds. As I can see, there is not much difference when one invests in FDs and Gilt/Debt Funds except that you rightly pointed out that the latter is little riskier.

This plan is totally conservative.. with a single aim of going for the Postal Scheme generating fixed income each month by way of interest.

My plan goes like this... first try to accumalate 3 lacs and then aim for 6 lacs (joint account)... When I do reach 6 lacs, an monthly income of 4K looks good with the basic pressure gets off the mind. I might still have to put 1K more as my share, but that is Ok.. I could then consider putting more and more funds in MFs for capital accumulation in say 10 years from now. So only four types of investments is running at this point for a small middle class guy like me . I have just picked up this thoughts and would like to have a plan of fund allocation to this at the earliest.

1) PPF [Retirement]
2) MFs [Incidental Expenses & Capital Growth ]
3) Post Office MIPs [Steady Monthly Income]
4) Term Insurance [To care of finance in my absence]

How much I will be able to put.each of the above plan except Term Insurance . is any body's guess.. but having such a plan in mind is helping me a lot.

Your views/comments ? Other financial wizards.. Share your thoughts please

Regards

Jeet

Originally Posted by mrindia

Hello Jeet!
i am sailing in the same boat. the idea seems to be 'safe' n logical. but instead of all FDs, i plan to include short-medium term gilt/debt funds to acumulate money for PO investment. although this choice is little riskier.
other members' views welcome.

mr india

[Rigid]

If you need a fixed monthly return, I'd say don't risk your money. Be safe and invest in a Post Office scheme.

As it is, even those MIP schemes are under no obligation to pay out every month and being market dependent, you can't expect a regular return. So, think before you decide.

[life2007]

Thanks Rigid

The same thought was in my mind. You backed it up and now I will stick to the Post Office scheme only for these fixed monthly return.

As far as risk is concerned, I have already started putting some money through SIPs in Diversified MFs.. So I guess a good balance now.

Thanks

Jeet

Originally Posted by Rigid

If you need a fixed monthly return, I'd say don't risk your money. Be safe and invest in a Post Office scheme.

As it is, even those MIP schemes are under no obligation to pay out every month and being market dependent, you can't expect a regular return. So, think before you decide.

[mrindia]

Originally Posted by life2007

Hi Mr. India..

Good to know.. you are in the same boat. Hope we ride smoothly to the shore

Ok, As you already know, I have started investing in MFs since Jan'08, I would not like to further expose any further amount other than the planned SIPs in the same route i.e MFs even if it is gilt or debt funds. As I can see, there is not much difference when one invests in FDs and Gilt/Debt Funds except that you rightly pointed out that the latter is little riskier.

This plan is totally conservative.. with a single aim of going for the Postal Scheme generating fixed income each month by way of interest.

My plan goes like this... first try to accumalate 3 lacs and then aim for 6 lacs (joint account)... When I do reach 6 lacs, an monthly income of 4K looks good with the basic pressure gets off the mind. I might still have to put 1K more as my share, but that is Ok.. I could then consider putting more and more funds in MFs for capital accumulation in say 10 years from now. So only four types of investments is running at this point for a small middle class guy like me . I have just picked up this thoughts and would like to have a plan of fund allocation to this at the earliest.

1) PPF [Retirement]
2) MFs [Incidental Expenses & Capital Growth ]
3) Post Office MIPs [Steady Monthly Income]
4) Term Insurance [To care of finance in my absence]

How much I will be able to put.each of the above plan except Term Insurance . is any body's guess.. but having such a plan in mind is helping me a lot.

Your views/comments ? Other financial wizards.. Share your thoughts please

Regards

Jeet

Every person has different financial liabilities at different times. So investment patterns/decisions are ‘tailor made’ for each specific case. Depending on these factors, at 32, I plan to be in Equity/Debt as 70:30 for my investments. I have already invested in FD/PO schemes accordingly. Around 45 age, I plan to drift towards ‘safe’ instruments systematically. Hope all is right in my view.

[Rigid]

As a rule of thumb, the debt allocation in your portfolio should directly reflect your age i.e, if you are 25 years old, at least 25% of your portfolio should be in debt instruments. Similarly, at 50 years of age, the debt component should be increased to 50%. Hope this helps.

[gabbar.singh]

Well subject says it all.