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    Where should I invest Rs 1 lakh to earn 10-12% return?

    Synopsis

    "It is hard to find an investment avenue that entails no risk and delivers 10-12 per cent. Your return expectation necessarily means you need to take the risk."

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    Higher return expectation from investment means you need to take higher risk.
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    I want to invest Rs 1 lakh in a safe, highly liquid product that will give 10-12% returns. What are my options?

    Vidya Bala, Co-Founder, PrimeInvestor.in replies, "It is hard to find an investment avenue that entails no risk and delivers 10-12%. Your return expectation necessarily means you need to take risk. You can consider 60% in post office time deposits which provide higher return than bank deposits and the rest in steady multi-cap equity funds and hold them for not less than 5 years. Add to this when you have surplus so that you average through equity volatility."

    I am 63. I am Rs 15 lakh in debt. My monthly expenses amount to Rs 65,000. My annual business turnover is about Rs 40-50 lakh and my taxable income is Rs 3-3.5 lakh after deductions. I have no insurance or savings. I want to invest Rs 5,000-10,000 a month so that I can clear my dues and save for my future. Please suggest some investment plans.

    Raj Khosla, Founder and Managing Director, MyMoneyMantra.com replies, "You need a comprehensive plan to get rid of debt and start saving, investing and insuring for a secure future. Review your loan accounts and interest costs and opt for a consolidated loan to convert your multiple EMIs into a single monthly instalment. Abide by a repayment schedule and prepay as much as possible. Before framing long-term goals, create a contingency fund of up to Rs 2 lakh. This will obviate the need for short-term borrowing. You should opt for a senior citizen health plan. Next, start a SIP of Rs 5,000 per month towards SCSC for guaranteed returns and Rs 2,500 to buy short-term debt funds such as HDFC Short Term Debt Fund and Kotak Bond Short Term Plan for the next 3 years."
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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