https://www.youtube.com/watch?v=S09SmNqrw-I

Well some people are lucky right? Well this is a question which a 33 year old asked me:

” I was the employee no. 2 in a start up and when the owner sold out last month, he gave me Rs. 10 crores – as a fair valuation of my shares. I am a bachelor staying in my own house, and I have about Rs. 30L of home loan. I have no other loans – I use a cycle, Uber and Ola, and have no reasons to own a car. My parents are well off and well provided for..and I am a only child.  I will inherit my parents portfolio (current value Rs 8 crores at least), earn Rs. 34L CTC, and save a nice big round sum of money. My net-worth (other than this Rs. 10 Cr) is about Rs. 1.2 crores. Not planning to get married, so this money is just for my Retirement and/or for some travel. In this market I am afraid to invest in debt or equity..actually I do not know the options..HELP”.

A real good problem to have…what say?

Hello Mr. S…I would be tempted to say “give it off to charity” you are capable of doing well in life! Well, I say this to everybody “use a white board to write your retirement plan”. So do not be in a hurry. I have a 35 year old nephew who is sure that he will not get married, maybe you are in that category, but I can’t ASSUME that you will NOT get married, EVEN if you do! If you are so confident…I would just put it in a fund with 70% equity and 30% debt and leave it there for 35 years. I guess it should do fine.

Wait, let us not hurry things.

You have an excellent job, and I am happy (thrilled) that you are not saying “I will quit my job and do Futures and Options”, God bless you. This kind of money is likely to turn your head – almost upside down and make people insane. Good for you, you are balanced. Congrats.

First put this into 2/3 liquid funds – choosing fund houses with good equity schemes. As you already have a decent Mutual fund portfolio I am not ‘advising’ you. I know you will do a good job. Rather that your fund advisor will do it. FULL AMOUNT IN LIQUID FUNDS. I would put some money in Ultra short bond fund…but first things first Liquid funds.

Far more importantly just because you have received Rs. 10 crs, it does not mean you have become a banker. Maybe you know NOTHING about risk, so no Pms, Aif, or worse Venture funding, PE funding, P2P lending,….none of this. Is this clear? Let me repeat, you are not a banker. You lack experience in risk management and your full time employment will not allow you to do a part time business. So none of this, please.

Some of the advantages that you have is simple – young age, high tolerance for pain (you need it after 30 years remember), you have a HUGE current income, you have parental financial protection,….almost everything going your way. You sound very sensible in your letter, you are looking at low cost solutions. Yes over 50 years costs and taxes play a very important role. So 2-3 ETF should work for you, but I will leave that to your investment adviser. I will stick to the philosophical level. Whether you do a STP over 3 years or a one time lumpsum now is going to be totally irrelevant over a 50 year time frame. So when your IFA finalizes let us have a conversation again.

…there is a part 2 coming tommorow..http://www.subramoney.com/2019/08/i-got-10-crores-part-2/