[DigitalOne]

Originally Posted by krish_veera

I have already started SIP on Mirae (Large Cap) for 15000/month. Should I continue with this or stop and go with known names for Large Cap as well?

Please continue the SIP. Mirae has been in India for 5+ years; and they have done really well in short time. So the chance that they will shut shop keeps diminishing as years go by.

[rajushank84]

Financial gurus, I have a question about saving up enough money to retire with mutual funds.

In my calculation, you need 1000 times the monthly amount (with a generous buffer). For Rs.10K you need 1 crore. This is based on return from mutual funds.

Here's my calculation.

Amount: 10000000 (1 crore)
Set aside 20% for planned future "big ticket" expenses and another 20% for unplanned big ticket expenses.

Assuming 10% return per year.

So Rs.60,00,000 (60 lakhs)
Assuming 10% return p.a = 6 lakhs per year.
Leave three fourths of that (7.5 of the 10 percent) in to keep up with inflation and get the other 2.5% out = Rs.1,50,000 = Rs. 12,500.
Now we have long term capital gains tax 10% so after that Rs.11K per month.
In other words approximately Rs.10K per month from that 1 crore.

So to calculate amount needed to retire (today), multiply the monthly amount needed by 1000.
This can be varied a bit, maybe no need to set aside 20% for planned and unplanned expenses separately, in which case just multiply the needed amount by 800.

Determine this amount and project for inflation by the time it is achieved. For example:
- If I need Rs.60,000 per month then multiply that by 1000 = 6 crore.
- To account for inflation by the time I achieve it: Let's say I achieve it after 6 year, assuming 7% inflation.
- So 6,00,00,000 * 1.07 ^ 6 = approx 9 crore.

In other words if I make 9 crore by 2024 then after that I can expect to make today's equivalent of Rs.60,000 per month for ever. With 20% each set aside for expenses (by today's value 1.2 crore for planned and 1.2 crore for unplanned).

If I achieve it in 10 years instead of 6 years then I need 6,00,00,000 * 1.07 ^ 10 = 11.8 crore (not 9 crore). This way, I have to "race" against inflation to hit that point where my total worth meets the inflation-adjusted amount.

So my question is, does this calculation look right?

The reason this is in the mutual fund thread is, this is based on the 10% returns from long-term equity mutual funds, only funds that don't have exit load (most of them are like that, right?), and of course redeeming only after a year or even several years in a stretch and paying 10% capital gains tax. Also, I couldn't find a better thread for this and I don't think this deserves its own thread.

(I assume inflation and returns will vary over time but this is just to flatten things out over say 30 years. This is also assuming I have a place to call home already and don't need to buy one with the accumulated amount).

[aadya]

Originally Posted by rajushank84

Financial gurus, I have a question about saving up enough money to retire with mutual funds.

I

Disclaimer: I am not Guru.

Assumptions required before we start these calculations is 1.Age of the person in question 2.Number of years for acheiving the corpus 3.Spouse accounted or not, Spouse earning or not, if yes corpus being created for her too? 4.Life expectancy post retirement 5.Living standard - can simply take the current monthly expenses - as we age health expenditure will become more but other overheads like partying etc would become lesser.

Read this Blog www.subramoney.com for retirement related confusion.

[blackwasp]

One query from my side.

So far I have been investing in 4 mutual funds via ICICI Direct and one directly via its website. Now, I know there is about 1% commission to the fund house, but off late I have noticed that I've been getting charged about Rs 35 per SIP per month. Thats Rs 140 per month on top of the non direct point. I reached a tipping point last week and opened an account with Zerodha. Not only do they invest in direct plans, but their monthly fee is just a flat Rs. 50 incase you invest more than Rs. 25,000.

Now, my query is, what happens to the funds via ICICI? Should I just pause them ? Or just redeem them and reinvest in the direct fund?

[DigitalOne]

Originally Posted by blackwasp

One query from my side.

Now, my query is, what happens to the funds via ICICI? Should I just pause them ? Or just redeem them and reinvest in the direct fund?

Yes, you should stop new investments via ICICIDirect immediately.

Redeeming and reinvest depends if you have made Short Term capital gains and if there is a STCG tax liability or not.

[Nonstop-driver]

Originally Posted by blackwasp

Now, my query is, what happens to the funds via ICICI? Should I just pause them ? Or just redeem them and reinvest in the direct fund?

Pause and use SWP to transfer to direct fund over time

[rajushank84]

Originally Posted by aadya

Disclaimer: I am not Guru.

Assumptions required before we start these calculations is 1.Age of the person in question 2.Number of years for acheiving the corpus 3.Spouse accounted or not, Spouse earning or not, if yes corpus being created for her too? 4.Life expectancy post retirement 5.Living standard - can simply take the current monthly expenses - as we age health expenditure will become more but other overheads like partying etc would become lesser.

Read this Blog www.subramoney.com for retirement related confusion.

I think you didn't read through my calculation.

1. Age of the person and 4. life expectancy are irrelevant since this aims for working indefinitely i.e never diminishes.

2. Number of years for achieving the corpus is factored into the calculation and I have given two scenarios (6 years and 10 years) with examples of adjustment for it.

3. Spouse income doesn't exist, this is the case when no one is earning anymore.

5. Living standard, size of family etc are abstracted away from this calculation. This takes the amount you need today as a value. That could vary based on those things like living standard, size of family etc. Instead of calculating all those things, everyone knows more or less how much they need by today's prices. So I am just putting that as in input.

[aadya]

Originally Posted by blackwasp

One query from my side.

Now, my query is, what happens to the funds via ICICI? Should I just pause them ? Or just redeem them and reinvest in the direct fund?

Icici direct and other bank platforms for mutual funds are pure daylight robbery. See the tax implications. LTCG does not apply for the fund value till 31-Jan-2017. If no STCG or if it is minimal then just redeem and do the same value investment through direct route. Zerodha looks fine but MFutility gives it free of cost and quite seamless once initial paperwork is done.

[krish_veera]

Hi Guys,

Quick Question, How long does it take for the purchase I made in mfuonline to reflect it my holdings? In other words, how much time does mf utilities takes to purchase fund units once I paid for the order (via online netbanking).

I have executed two purchases yesterday around 10 AM and another one at 9 PM. But the units havent reflected in my summary page. I can only see the units I bought last month.

Thanks,
Veera

[saket77]

Originally Posted by krish_veera

I have executed two purchases yesterday around 10 AM and another one at 9 PM. But the units havent reflected in my summary page. I can only see the units I bought last month.

Thanks,
Veera

Hi! Since the markets were closed yesterday, the units would have been purchased today only. So, even if the funds were debited yesterday, the transaction would have been executed today, and units should be visible tomorrow morning.

Regards.

[Ithaca]

Originally Posted by blackwasp

One query from my side.

So far I have been investing in 4 mutual funds via ICICI Direct and one directly via its website
Now, my query is, what happens to the funds via ICICI? Should I just pause them ? Or just redeem them and reinvest in the direct fund?

I would suggest you pause the SIPs with immediate effect on ICICI Direct. No need to pay the brokerage charges when you can make the investments in the respective fund houses on your own as direct investments and gain an additional 1% return on your investment.

Wait the stipulated time and do a systematic withdrawl to your bank account so that you do not any pay STT but will be hit by LTCG if withdrawn after 31st March 2018.

Simultaneously, since you have stopped 4 SIPs via ICICI Direct, make the same investments in the same fund houses and this time do not use a broker but select "Direct" so that all your investments will be "Direct Growth" or "Direct Dividend Reinvestment"

Making "Direct" investments will give you an approximate interest rate increase of 1% as compared to going via a broker.

The systematic withdrawls that you have set up from the original funds after the stipulated time period can now be additionally used to contribute to the new SIPs along with the amount you are anyway investing.

Use portals like Moneycontrol or ValueResearch to track your investments.

[The Rationalist]

Originally Posted by blackwasp

One query from my side.

Now, I know there is about 1% commission to the fund house, but off late I have noticed that I've been getting charged about Rs 35 per SIP per month. Thats Rs 140 per month on top of the non direct point. I reached a tipping point last week and opened an account with Zerodha. Not only do they invest in direct plans, but their monthly fee is just a flat Rs. 50 incase you invest more than Rs. 25000

Dear Blackwasp,

Open a MF Utility account online and invest for free. Zero charges. Why spend money, when its free!

Regards,
The Rationalist.

[blackwasp]

Thank you all for the suggestions! The general consensus has been to stop my ICICI SIPs which I have now done.

Originally Posted by DigitalOne

Yes, you should stop new investments via ICICIDirect immediately.

Originally Posted by Nonstop-driver

Pause and use SWP to transfer to direct fund over time

Originally Posted by aadya

Icici direct and other bank platforms for mutual funds are pure daylight robbery.

Originally Posted by Ithaca

I would suggest you pause the SIPs with immediate effect on ICICI Direct.

Use portals like Moneycontrol or ValueResearch to track your investments.

I will be using ValueResearch from now.

Originally Posted by The Rationalist

Why spend money, when its free!

My initial idea was the ease of convenience. Having all investments in one place and the ease of usage. ICICI was that till they started levying many charges even on top of the non-direct plans. Franky, that 1% was willing to let go had there been no other charges, just for the sake of convenience.

Zerodha seems to have a nice interface and Rs 50 is a decent amount. I am willing to pay for the services, however it should not be a pure robbery.

[DigitalOne]

Originally Posted by blackwasp

Franky, that 1% was willing to let go had there been no other charges, just for the sake of convenience.

Right decision to stop with ICICI Direct, but for the wrong reason .

1% of fund value is more significant than a couple of hundred rupees as one-time charges. For example: If your fund corpus grows to 10 Lakh rupees, you will be paying a whopping Rs 10,000/- annually to ICICI Direct.

[spookey]

Hello friends, need some urgent help here.. on mfuonline i by mistake made a redemption request for all my units and now i am unable to find a way to cancel this redemption request. Any pointers how should i cancel the same ? Thank you.