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Typical Investment Portfolio of an Army Veteran - And what's wrong with it

We're in touch with a lot of Indian Army, Airforce & Navy Veterans who retire with a lumpsum proceed of around 1 Crore (on opting 50% computation of income) and this is how they typically invest it -

Now, let's analyze the portfolio, and see what will be its value after 5 years -

SCSS (Senior Citizen Savings Scheme) @ 7.4% p.a. - Simple Interest - 15 lakhs

Value after 5 Years - Rs. 20,55,000/-

POMIS (Post Office Monthly Income Scheme) @ 6.6% p.a. - Simple Interest - 9 lakhs

With a limit of 4.5 lakhs per investor, veterans usually deposit 4.5 lakhs each in their and spouse's account, with a total investment in POMIS at Rs. 9 lakhs.

Value after 5 Years - Rs. 11,97,000/-

Real Estate (Plot/ Flat) - 50 lakhs - Assuming it doubles in 7 years

Value after 5 Years - Rs. 80,52,000/-

Bank FD - 16 lakhs @ 5.5% p.a. (Senior Citizen FD Rate of SBI)

Value after 5 Years - Rs. 20,91,000/-

Bank Savings Account @ 2.7% p.a./ Spend it

Value after 5 Years - Rs. 11,43,000/-

Total Portfolio Value after 5 years = Rs. 1.45 Crore

Return Earned in 5 years = 7.7% p.a.

Inflation currently in India is 7 - 8% p.a.

Real Return you earned = Return earned (-) Inflation (the rate at which the value of money is depreciating).

Real return in this case comes to zero. Essentially, that means, your money did not grow at all during these 5 years.

Then what is the suggested portfolio?

Ideally, it should be a mix of capital protection investments and some wealth generation investments (with returns beating inflation by 4-5% p.a.) in order to actually grow your money and make it work hard for you.

Reach out to us to understand how better you can park your investments and do a balance of both - capital protection and wealth generation.

Stay Safe!


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