Slow and steady: How a passive approach to investing secured this Mumbai-based CEO's retirement future

livemint.com:

Mumbai-based Kartik Sharma, who has been working in the advertising industry since the 90s, is well on track to achieve his retirement goals. His investments already account for 95% of his retirement corpus target.

Sharma, 52, who works as group CEO of a global media company, is eight years away from retirement. He has achieved his goals by putting in a large allocation to equity and letting his investments compound over the years. His asset mix has a 74% allocation to equities and a balance of 26% to debt.

“In the past 17 years of my financial planning journey, which has been orchestrated by my financial advisor, I have witnessed the power of compounding," says Sharma. He has been almost passive with his investments and avoided tampering and tinkering with them too much, he added.

Sharma and his wife have 34 mutual funds in all. While Sharma’s investments are spread across 24 funds, ten funds are in his wife’s name.

The family’s equity mutual fund portfolio is diversified as follows

Meanwhile, the 26% debt allocation is split evenly, with 13% in liquid debt and 13% in illiquid debt. The liquid debt comprises a mix of arbitrage and debt schemes, while the illiquid portion is in the employee provident fund. The liquid debt is reserved for annual family travel, typically twice a year, and any contingency requirements. The equity investments are dedicated to long-term goals such as retirement and his son's education.

Sharma doesn't like real estate as an investment, as he says it is an illiquid asset. His own house is loan-free, but he says he doesn't look at it as an investment as it is for residential purposes.

He says he has already reached 100% of his corpus target for his son’s education.

Apart from this, the family