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Milind

Milind Vadjikar  |665 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 21, 2024

Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

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Money
Sir, in how many years , I can turn 1crore to 20 crore.So that I can retire.Im investing about 1.35lakh as sip every month . Im 44 now . I have about 60 lakh iin different funds now, im hoping to reach a crore 2026.Thanks in advance.
Ans: To achieve a corpus of Rs 20 crore with your current financial inputs, let's break it down step by step:

Your Current Investments and SIP Plan
Current Investment: Rs 60 lakh (expected to grow to Rs 1 crore by 2026).
Monthly SIP Contribution: Rs 1.35 lakh.
Expected Rate of Return: 12% annually.
Timeframe to Reach Rs 20 Crore
With a starting corpus of Rs 1 crore (by 2026) and continuing a SIP of Rs 1.35 lakh monthly at 12%, it will take 23 years to grow to Rs 20 crore.
By the time you turn 67 years old, your desired retirement corpus can be achieved.


Key Assumptions
The 12% return assumption is realistic for equity-heavy portfolios. However, past performance is no guarantee for the future.
The SIP contributions should continue consistently without interruption for the given timeframe.
Inflation and changing lifestyle expenses are not considered here.

Points to Consider
Diversify Your Investments: Ensure your portfolio includes a mix of equity and debt. Adjust allocations as you approach retirement to reduce risk.

Monitor Progress Regularly: Periodically review your investments and returns. Rebalancing may be necessary to stay aligned with your goal.

Increase SIP Contributions Gradually: With rising income, consider increasing your SIPs by 5-10% annually to reduce the timeframe.

Emergency Fund and Insurance: Ensure you have a robust emergency fund and sufficient term insurance to secure your family.

High-Level Suggestion
We can fine-tune the investment strategy and assess the risks involved in detail.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

Asked by Anonymous - Nov 20, 2024Hindi
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Money
I have a FD @19lac. where and how should i invest it safely and effectively to utilize it for my daughters higher education?.She is 11 yrs now.. But this is all what i have left for my savings . I am 40 yrs at present self employed since past 6 months. Invested my savings and investments in establishing my Dental Clinic( rented) . Can't invest more or save for some time . Kindly advise .
Ans: At age 40, with a self-employed career and Rs 19 lakh in FD, your goal of funding your daughter's higher education in seven years requires careful and safe planning. Below is a structured approach to help you.

Assessing the Current Financial Position
1. Fixed Deposit’s Role
Your FD ensures safety and guaranteed returns.

Current FD rates may not beat inflation in education costs.

Retaining some funds in FD can serve as an emergency reserve.

2. Limited Income Contribution
As a new self-employed professional, saving or investing regularly is challenging.

Relying on the existing Rs 19 lakh corpus is critical.

Balancing Safety and Growth
1. Maintain an Emergency Reserve
Keep Rs 3-4 lakh in FD or a liquid fund for emergencies.

Use this reserve to handle clinic or personal contingencies.

2. Allocate for Growth Investments
Allocate Rs 10-12 lakh to balanced hybrid funds.

These funds balance risk by investing in equity and debt instruments.

They may generate returns higher than inflation while limiting volatility.

3. Plan for Tax-Efficient Investments
Invest Rs 2-3 lakh in debt funds for tax efficiency.

Debt funds offer indexation benefits, reducing long-term tax liability.

Use these for medium-term goals or partial withdrawals.

Structured Withdrawal for Higher Education
1. Using SWP for Future Education Needs
Set up an SWP (Systematic Withdrawal Plan) from mutual funds in 2029.

Ensure regular payouts align with education fee schedules.

This approach protects your corpus while managing liquidity.

2. Avoid Full Withdrawal of Investments
Avoid liquidating the entire corpus prematurely.

Keep the investments compounding until needed.

Insurance and Protection
1. Adequate Term Insurance
Ensure a term insurance policy covers your daughter’s education costs.

Choose coverage based on your loan and education fund needs.

2. Health Insurance for Contingencies
Maintain a comprehensive health insurance policy.

This safeguards your savings from unexpected medical expenses.

Education Cost Estimation
1. Forecast Higher Education Expenses
Estimate the required corpus for your daughter’s education.

Consider inflation at 8-10% while planning the corpus.

2. Supplement with Scholarships or Education Loans
Explore scholarship opportunities for her higher studies.

An education loan could reduce immediate financial pressure.

Avoiding Common Pitfalls
1. Do Not Invest Entirely in Equity
Pure equity funds are too volatile for a 7-year horizon.

Balanced funds reduce risks while providing reasonable growth.

2. Avoid Long Lock-in Periods
Avoid products like ULIPs or policies with long lock-ins.

Ensure liquidity for when funds are needed.

Tracking and Reviewing Investments
1. Periodic Portfolio Review
Review and rebalance your investments annually.

Align them with market conditions and financial goals.

2. Monitor Education Costs Regularly
Keep track of potential education expenses for better planning.
Final Insights
Your Rs 19 lakh can grow meaningfully with balanced investments. Keep some funds liquid while investing for growth. Prioritise safety and tax efficiency. Plan for gradual withdrawals to meet higher education expenses without depleting your corpus prematurely.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

Asked by Anonymous - Nov 20, 2024Hindi
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Money
Dear sir, I have recently bought an under construction flat( handover- 2027) and having loan of 52 lakhs for which the EMI will be around 47 thousand(8.75%). I have sufficient investment in mutual fund, generating return around 17-18 percent. Should I repay the loan from my corpus or continue the EMI. For decreasing the burden of EMI, can I start SWP from mutual fund. What would be better? My monthly salary is 1 l/m and having,SIP around 40th/m. My age is 48 years.
Ans: With an under-construction flat and a Rs 52 lakh home loan, your financial decisions need careful analysis. Let’s explore whether you should repay the loan, continue EMI payments, or start a Systematic Withdrawal Plan (SWP) from your mutual fund corpus.

Assessing Loan Repayment vs. Continuing EMIs
1. Interest Rate and Opportunity Cost
Your loan interest rate of 8.75% is relatively high.

Your mutual fund returns of 17–18% exceed the loan cost, making investments lucrative.

Paying the loan partially or fully could limit your future growth potential.

2. Impact on Liquidity
Using your corpus to repay the loan reduces your liquid assets.

Liquidity is crucial for emergencies, education, or retirement needs.

Continuing EMIs while keeping investments intact ensures financial flexibility.

3. Tax Benefits on Home Loan
Interest payments on home loans offer tax deductions under Section 24(b).

Principal repayments qualify under Section 80C, up to Rs 1.5 lakh annually.

These benefits reduce the effective interest cost of the loan.

Evaluating Systematic Withdrawal Plan (SWP)
1. Reducing EMI Burden with SWP
An SWP generates a monthly cash flow from mutual funds.

Returns may support EMI payments while retaining your investment corpus.

SWP keeps your portfolio compounding, unlike a one-time withdrawal.

2. Tax Implications of SWP
Gains from equity funds over Rs 1.25 lakh are taxed at 12.5% LTCG.

Short-term withdrawals (below one year) are taxed at 20%.

Plan withdrawals strategically to minimise tax impact.

Evaluating Your SIP Strategy
Investing Rs 40,000 in SIPs monthly indicates disciplined financial planning.

Continue SIPs as they build wealth systematically over the long term.

Avoid stopping SIPs to manage EMIs, as compounding benefits diminish.

Suggested Course of Action
1. Continue EMIs for Now
Retain your mutual fund corpus to earn higher returns.

Use the tax benefits to reduce the effective cost of the loan.

2. Start a Partial SWP for EMI Support
Withdraw a portion of returns monthly to ease EMI pressure.

Adjust SWP withdrawals based on mutual fund performance and needs.

3. Consider Partial Loan Prepayment
Prepay a part of the loan if liquidity is not a concern.

This reduces the principal, lowering EMI or tenure.

4. Regularly Monitor Investments
Track mutual fund returns and market conditions.

Rebalance your portfolio annually to align with goals.

Final Insights
Managing EMIs and investments is a balancing act. Continue your loan and utilise SWP for partial EMI support if needed. Prioritise liquidity while letting your mutual funds grow. Periodic reviews will ensure financial stability and goal alignment.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

Asked by Anonymous - Nov 16, 2024Hindi
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Money
Due to inflation I have withdrawn 1 cr from mutual funds where to invest now
Ans: With inflation reducing the purchasing power of money, investing strategically is essential. Redeploying Rs 1 crore effectively requires considering your financial goals, risk appetite, and time horizon. Let’s explore how you can create a robust plan to counter inflation and achieve financial stability.

Define Your Financial Goals
Before investing, clarify your financial objectives.

Short-Term Goals: Any requirements within the next 3 years, like buying a house or a car.

Medium-Term Goals: Goals 3–7 years away, such as children's education or large purchases.

Long-Term Goals: Goals beyond 7 years, such as retirement planning or wealth creation.

Diversify Across Asset Classes
To mitigate risk and enhance returns, diversification is critical. Here’s a breakdown:

1. Debt Instruments for Stability
Liquid Funds: Ideal for parking money for 6 months to 2 years. Offers better returns than savings accounts.

Short-Duration Bonds: Provides stable returns with lower risk for medium-term needs.

Fixed Deposits: For guaranteed returns, but ensure the interest rate beats inflation.

2. Equities for Long-Term Growth
Systematic Investment Plans (SIPs): Invest in equity mutual funds gradually to counter market volatility.

Diversified Mutual Funds: Suitable for moderate-risk investors seeking long-term wealth creation.

Blue-Chip Stocks: Focus on financially strong companies for stable returns over time.

3. Gold as a Hedge Against Inflation
Allocate 5–10% of your portfolio to gold.

Consider Sovereign Gold Bonds (SGBs) or gold ETFs for better liquidity and tax benefits.

4. Real Assets for Partial Stability
REITs (Real Estate Investment Trusts): Offers exposure to real estate without the burden of direct ownership.

Avoid investing in physical real estate solely for returns, as liquidity and high costs are concerns.

5. Emerging Options for Diversification
International Funds: Provides exposure to global markets, balancing domestic risks.

Balanced Advantage Funds: A mix of equity and debt dynamically managed based on market conditions.

Focus on Tax-Efficient Investments
Equity mutual funds have favourable tax treatment but check the new LTCG rules.

Consider investments like ELSS for tax-saving benefits under Section 80C.

For debt funds, remember their gains are now taxed as per income slabs.

Maintain an Emergency Fund
Allocate 6–12 months' worth of expenses in a highly liquid asset.

Use this as a buffer against unforeseen events and avoid dipping into your investments.

Periodic Review and Rebalancing
Monitor your portfolio regularly to ensure alignment with goals.

Rebalance annually to maintain the desired asset allocation.

Investment Do’s and Don’ts
Do’s
Diversify investments across multiple asset classes.
Prioritise inflation-beating returns, especially for long-term goals.
Invest systematically rather than in lumpsum for volatile markets.
Don’ts
Avoid direct real estate for investment purposes due to illiquidity and transaction costs.
Do not invest the entire corpus in high-risk options.
Steer clear of schemes offering unrealistic returns or unregulated avenues.
Final Insights
Reinvesting Rs 1 crore requires a clear strategy that matches your financial goals and risk tolerance. Diversify across equity, debt, gold, and emerging instruments for stability and growth. Keep inflation in check by focusing on tax-efficient and inflation-beating investments. Regular monitoring and adjustments will ensure your portfolio remains aligned with your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

Money
Hello sir. My age is 41 . I have taken a different loan stage wise as need. My salary is 72000 and loan+credit card bill is around 68000 so it is very difficult to manage it. I have home loan of 18000 emi Personal loan emi 18800 pending emi 50 Personal loan EMI 11500 pending emi 24 Personal loan EMI - 4000 pending emi 30 Two wheeler loan EMI 3400 pending emi 12 Credit card due is 100000 I have buy 1 BHK flat on 4 th floor before 11 year as it market value remain same so I think to sell out for clear some due So it is advisable or not. Is any bank/institute/financial support is in market to provide a single loan to clear all your different loan n we need to clear only one EMI ???
Ans: Your current financial situation involves high debt obligations relative to your income. Managing these efficiently is crucial to improve cash flow and financial stability. Let us address the situation step-by-step and evaluate your options for reducing debt stress.

Current Financial Snapshot
Income: Rs 72,000 per month.

EMI Obligations: Rs 68,000 monthly across home, personal, and two-wheeler loans.

Credit Card Debt: Rs 1,00,000 outstanding balance.

Assets: A 1 BHK flat purchased 11 years ago, with little to no appreciation.

Challenges in Your Financial Scenario
High Debt-to-Income Ratio: A significant portion of your income goes towards EMIs.

Multiple Loans: Managing several EMIs increases stress and creates inefficiency.

Flat’s Value Stagnation: Limited appreciation in your flat reduces its utility as an investment.

Assessing the Sale of Your Flat
Potential Benefits
Clearing Debt: Selling the flat can reduce or eliminate some debts.

Cash Flow Relief: Reduced EMIs can provide more breathing room for monthly expenses.

Simplification: With fewer loans, managing your finances becomes easier.

Potential Risks
Loss of Asset: Selling the flat reduces your property portfolio.

Market Conditions: Stagnant market value may not yield significant proceeds.

Rent Costs: If you sell, you may need to spend on rent, impacting cash flow.

Considerations Before Selling
Assess the flat’s current market value and selling potential.

Calculate the total debt you can clear with the sale proceeds.

Evaluate the impact on future living arrangements and rental costs.

Exploring Debt Consolidation
Single Loan to Replace Multiple Loans
Many banks and NBFCs offer debt consolidation loans.

A single loan replaces all your current debts.

You pay only one EMI, making it easier to manage finances.

Benefits of Debt Consolidation
Lower EMI: Consolidation can reduce overall EMI through extended tenure.

Reduced Interest Rates: Personal loans and credit cards have high interest rates. A consolidated loan may offer lower rates.

Simplified Management: Fewer payment schedules reduce the risk of missed EMIs.

Key Considerations
Evaluate the total cost, including processing fees and interest.

Check your eligibility and credit score for better loan terms.

Avoid taking new loans after consolidation to prevent a debt spiral.

Reducing Credit Card Debt
Immediate Actions
Prioritise paying off your credit card balance due to high interest rates.

Convert the outstanding balance into an EMI option if your bank allows.

Avoid using credit cards until the balance is cleared.

Long-Term Management
Use credit cards only for essentials and pay full balances each month.

Set spending limits to ensure better control over usage.

Optimising Your Budget
Reduce Expenses
Categorise expenses and cut non-essential spending.

Use public transport or carpooling to reduce travel costs.

Review utility bills and optimise usage to lower costs.

Create a Debt Repayment Plan
List loans by interest rate and tenure.

Focus on high-interest loans like personal loans and credit cards first.

Use any bonuses or windfalls to prepay loans.

Generating Additional Income
Renting the 1 BHK Flat
If selling the flat is not feasible, consider renting it for extra income.

Use the rent to reduce EMI pressure or build a repayment fund.

Freelancing or Part-Time Work
Explore freelance opportunities that match your skills.

Use additional income to pay off debts faster.

Alternatives to Consider
Restructuring Loans
Approach your lenders to restructure loans with extended tenure or reduced EMI.

Ensure that restructuring terms are affordable and sustainable.

Balance Transfer
Transfer high-interest personal loans to lenders offering lower interest rates.

Use this to reduce overall interest burden and EMI.

Benefits of Working with a Certified Financial Planner
A Certified Financial Planner can provide a customised debt repayment plan.

They help manage finances effectively while maintaining focus on long-term goals.

Guidance ensures disciplined execution without additional debt accumulation.

Final Insights
Selling your flat can clear significant debt, but consider rental costs and market conditions. Debt consolidation can simplify EMIs and reduce interest costs, but evaluate its feasibility. Focus on paying high-interest loans first, optimise expenses, and explore additional income streams. Avoid accumulating further debt to regain financial stability. A structured approach will help you achieve long-term financial freedom.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

Asked by Anonymous - Nov 16, 2024Hindi
Money
Hi there - I have the following real estate portfolio - India - 2 Apartments fully paid and a single storey landed property (ancestral), 1 overseas property valued at 5 CR with around 2.4 cr loan pending. Currently, the landed property in India is rented out and I receive a meagre rent monthly of 10K INR. I was thinking of handing over to a builder to build an apartment complex and keep 3 apartments for myself based on what the builders offers (Of course I will have to buy 1 apartment and have the rent from those offset the other 2 apartments that the builder will give me). Either this, or I build another level on top and rent out the two separately. I this case I will have to invest additional 30L. Financially, I was wondering what would be a better option? I have no intention of staying there for another 15 years at least.
Ans: Your real estate portfolio is diverse and well-structured, with properties in India and overseas. This portfolio offers you flexibility, but it also requires careful decision-making to maximise returns and reduce liabilities. Let us assess your current situation and evaluate both options you are considering.

Strengths in Your Portfolio
Debt-Free Indian Properties: Fully paid apartments and an ancestral landed property offer financial stability.

Income Generation: While the rent of Rs 10,000 is modest, it provides a consistent income stream.

Overseas Property: Although it has a pending loan, its Rs 5 crore valuation indicates strong equity.

Challenges to Consider
Low Rental Income: The Rs 10,000 rent from the landed property is not financially impactful.

High Loan on Overseas Property: The Rs 2.4 crore liability needs to be managed strategically.

Future Commitment: Both your proposed options require significant time, effort, and financial resources.

Assessing Option 1: Handing Over to a Builder for an Apartment Complex
Advantages
Increased Asset Value: Converting the property into an apartment complex increases its market value.

Additional Income: Renting out multiple apartments can yield higher rental income.

Minimal Upfront Investment: The builder covers most costs, reducing your financial burden.

Ownership of Multiple Apartments: Retaining three apartments ensures future flexibility.

Disadvantages
Dependence on Builder’s Offer: The deal heavily depends on the builder’s terms and reliability.

Extended Timelines: The construction period could delay income generation.

Market Risks: Renting or selling multiple apartments depends on market conditions.

Key Considerations
Assess the builder’s reputation and financial stability.
Ensure transparent legal agreements with clear terms and timelines.
Evaluate the market demand for apartments in the location.
Assessing Option 2: Adding a Level and Renting Out Units
Advantages
Control Over Property: You retain full control over the construction process.

Quicker Completion: Adding a level is faster than constructing an entire complex.

Modest Investment: Rs 30 lakh is a smaller upfront commitment compared to other options.

Steady Rental Income: Renting out two units provides immediate and predictable cash flow.

Disadvantages
Limited Growth Potential: This option adds only incremental income and asset value.

Construction Challenges: Managing permits and construction quality requires your involvement.

Upfront Cost: The Rs 30 lakh investment may impact your liquidity.

Key Considerations
Plan for the Rs 30 lakh investment without disrupting other financial goals.
Ensure proper permissions for adding another level to the property.
Research rental demand and pricing for the additional units.
Financial Implications
Loan on Overseas Property

Prioritise repaying the Rs 2.4 crore loan to reduce interest costs.
Consider liquidating underperforming assets to reduce liabilities.
Rental Income Potential

The builder option may yield higher income but involves delays and uncertainties.
Adding a level provides immediate income but limits long-term growth.
Liquidity and Cash Flow

Avoid over-committing funds to construction or renovation.
Maintain an emergency fund to address unforeseen expenses.
Alternative Investment Suggestions
Instead of solely focusing on real estate, you can consider diversifying into financial instruments for balanced growth:

Actively Managed Mutual Funds
Offer consistent growth potential with professional fund management.
Provide liquidity and flexibility to align with financial goals.
Hybrid Funds
Blend equity and debt investments for stability and moderate growth.
Ideal for generating consistent income while preserving capital.
Systematic Withdrawal Plans (SWP)
Generate monthly income from investments while ensuring capital preservation.
Provides a reliable alternative to rental income.
Regular Funds vs Direct Funds
Regular funds ensure expert guidance and portfolio optimisation by Certified Financial Planners.
Direct funds require self-management, which may lead to errors and missed opportunities.
Tax Considerations
Capital Gains Tax: Selling any property will attract long-term or short-term capital gains tax.
Tax Savings: Reinvesting proceeds in financial instruments can optimise tax liability.
Final Insights
Both options for your ancestral property have pros and cons. The builder option offers long-term growth but requires careful negotiation and patience. Adding a level provides immediate income with lower financial risk.

Diversifying into financial investments can complement your real estate portfolio, providing liquidity and consistent returns. Assess your financial priorities and future plans before committing to a decision.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

Asked by Anonymous - Nov 20, 2024Hindi
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Money
Hai, I am 46 yr old. I have been investing in SBI Energy Opportunities Fund regular growth plans since 1 year through SIP. The performance of this fund is not as expected compared to other funds. Should I continue my investment or lokk out for other better options. If so, please suggest some good investment options
Ans: Sector-specific mutual funds like the energy-focused fund you are investing in carry higher risks. They are more volatile compared to diversified mutual funds. This volatility happens because they depend heavily on the performance of a particular sector.

You are rightly evaluating your investment as it has underperformed. Let us analyse and suggest alternative approaches for better returns.

Challenges with Sector-Specific Mutual Funds
High Dependency on a Single Sector: Sector-specific funds rely on one sector. If the sector struggles, your returns may decline.

Volatility: These funds are highly cyclical and sensitive to market conditions.

Not Ideal for SIPs: Systematic investments in sector-specific funds may not yield consistent returns. This is because the sector may not perform well during the investment period.

Benefits of Diversified Mutual Funds Over Sector-Specific Funds
Risk Mitigation: Diversified mutual funds invest across various sectors. This lowers the overall risk.

Consistent Performance: They tend to perform steadily across market cycles, offering balanced returns.

Flexibility: These funds adjust their portfolio allocation to changing market conditions.

What Should You Do with Your Current SIP?
Review Your Financial Goals
Decide whether the energy sector aligns with your long-term goals.

Monitor Fund Performance
Assess the fund's returns against its benchmark and peers over a 3-5 year horizon.

Gradual Exit Strategy
Avoid stopping SIP abruptly. Gradually reduce your exposure while reallocating to other funds.

Alternative Investment Options for Better Results
Actively Managed Equity Funds
These funds provide professional management to adapt to market changes.
They offer growth by investing in multiple sectors and market capitalisations.
Balanced Hybrid Funds
These funds invest in a mix of equity and debt.
They offer growth potential while ensuring stability in returns.
Flexicap Funds
These funds invest in large, mid, and small-cap stocks.
They give you a balance of risk and reward over time.
Why Regular Funds and Not Direct Funds?
Certified Guidance: Regular funds provide access to expert guidance from a certified financial planner (CFP).
Monitoring: A CFP tracks your investments and adjusts your portfolio.
Tax Efficiency: Regular funds help optimise tax liability through planned withdrawals.
Direct funds require you to manage all these aspects alone, increasing complexity and potential errors.

Taxation Considerations for Switching Funds
Equity Funds: Gains exceeding Rs 1.25 lakhs are taxed at 12.5% for long-term capital gains (LTCG). Short-term gains (less than 1 year) are taxed at 20%.

Debt Funds: LTCG and STCG are taxed as per your income slab.

Plan your fund switches carefully to minimise tax impact.

Final Insights
Sector-specific funds, while appealing, may not align with your financial goals due to high risks and volatility. Moving to diversified or balanced mutual funds can ensure consistent growth with reduced risks. Opting for regular funds under a certified financial planner ensures professional guidance and effective portfolio management.

Invest wisely to secure stable and rewarding financial growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

Money
I worked in IT industry for 18 years and 5 Years in MFG, lost job was getting 1.4 lakh/month , have loan of 13 lakh, rental income 20k ,PF 10 Lakh saving 5 Lakh . how to improve to income for children 12 & 3 studies and other expenses
Ans: You have a solid financial base, including rental income, PF, and savings. Losing your job is a difficult phase, but it also offers an opportunity to reassess your goals. Your priorities—managing expenses, repaying loans, and planning for your children’s future—are achievable with a systematic approach.

Let’s analyse your situation from all angles and create a comprehensive financial plan.

Detailed Analysis of Your Assets and Liabilities
1. Loan Liabilities

Your outstanding loan of Rs 13 lakh is a major priority.
Paying EMIs consistently while maintaining liquidity will help ease this burden.
2. Rental Income

Rs 20,000 per month is a valuable, steady income source.
This income can support loan repayment or household expenses.
3. Provident Fund (PF)

Rs 10 lakh in PF is a significant safety net for your retirement.
Avoid using PF for immediate needs unless absolutely necessary.
4. Savings

Rs 5 lakh in savings can be utilised strategically.
Reserve a part for emergencies, and use the rest for growth-oriented investments.
Strategies to Improve Income
A. Leverage Professional Experience

Your 18 years in IT and 5 years in MFG offer opportunities to monetise your skills.
Seek freelance consulting or project-based roles in IT, supply chain, or manufacturing.
Register on platforms that connect experienced professionals to global employers.
B. Upskill for High-Demand Roles

Enrol in short-term certifications in areas like cloud computing, AI, or supply chain analytics.
Consider online platforms offering affordable courses to boost employability.
C. Explore Passive Income Streams

Convert savings into investments that generate steady returns.
Look for low-risk instruments that complement your rental income.
Loan Management
A. Prioritising Debt Repayment

Allocate rental income of Rs 20,000 monthly towards loan EMIs.
Ensure timely payments to avoid penalties and maintain your credit score.
B. Negotiating Loan Terms

Approach your lender to explore refinancing options for better interest rates.
If possible, restructure the loan to lower monthly EMIs.
C. Avoid Aggressive Prepayment

Prepay only when you have surplus funds beyond emergency reserves.
Maintaining liquidity is crucial to address unexpected expenses.
Building a Secure Financial Base
A. Emergency Fund Creation

Set aside Rs 3 lakh from your savings as an emergency fund.
Keep this fund in a liquid or ultra-safe investment to access it quickly.
B. Children’s Education Planning

Your children, aged 12 and 3, will require significant educational funds.
Start systematic investments now to meet these future needs.
C. Protecting Your Family’s Future

Ensure adequate life and health insurance coverage to protect against uncertainties.
Reassess existing policies to confirm they align with your financial goals.
Expense Management
A. Streamlining Monthly Expenses

Identify and reduce non-essential spending.
Use expense-tracking apps to monitor and control your budget.
B. Prioritising Education Costs

Focus on allocating a portion of income towards your elder child’s school fees.
Plan for higher education expenses well in advance by estimating future costs.
C. Accounting for Inflation

Factor in annual inflation, especially for education and healthcare.
Adjust your savings and investments to account for these rising costs.
Enhancing Investment Strategy
A. Systematic Investment Planning (SIP)

Start SIPs in mutual funds with a balanced mix of equity and debt exposure.
Use regular funds through a Certified Financial Planner (CFP) for expert guidance.
B. Advantages of Regular Funds Over Direct Funds

Direct funds lack the professional advice and market insights provided by CFPs.
Regular funds allow you to focus on long-term goals with less personal effort.
C. Avoid Index Funds for Better Returns

Index funds only replicate market performance without active risk management.
Actively managed funds adapt to market changes, potentially delivering higher returns.
Tax Planning for Maximum Efficiency
A. Utilising Tax Deductions

Maximise deductions under Section 80C by investing in tax-saving instruments.
Consider ELSS funds, which combine tax benefits with wealth creation.
B. Planning Withdrawals for Lower Tax Impact

Withdraw investments strategically to minimise taxable income.
Understand the latest mutual fund tax rules to optimise gains.
C. Investing for Tax Efficiency

Allocate savings in instruments offering tax-free or tax-deferred returns.
Use systematic transfer plans (STPs) to transition funds between debt and equity.
Focusing on Children’s Education
A. Long-Term Education Planning

Begin investing specifically for your children’s higher education.
Use diversified instruments to build a substantial corpus over the years.
B. Setting Milestone-Based Goals

Break down education costs into milestones (e.g., school, college, post-graduation).
Align investment timelines to meet these milestones effectively.
C. Combining Growth and Stability

Choose a balanced investment strategy to ensure growth without excessive risk.
Review your portfolio yearly to align with evolving financial goals.
Planning for Retirement
A. Preserving Your PF for Retirement

Keep PF untouched as your retirement base.
Complement it with long-term investments in growth-oriented funds.
B. Building a Secondary Corpus

Invest systematically in debt and equity funds to create an additional retirement corpus.
Maintain a diversified portfolio to reduce overall risk.
C. Ensuring Financial Independence

Target investments that generate a steady income during retirement.
Reinvest returns to grow your corpus until retirement.
Continuous Monitoring and Professional Guidance
A. Collaborate with a Certified Financial Planner

Work with a CFP to create a tailored financial plan.
Review your progress regularly and adjust as needed.
B. Monitoring Investments

Track the performance of all investments every six months.
Rebalance your portfolio to adapt to changing market conditions.
C. Staying Updated

Stay informed about new financial products and investment opportunities.
Use financial literacy to make better decisions for your family’s future.
Final Insights
You have a strong foundation with your rental income, PF, and savings. By focusing on income enhancement, debt management, and systematic investing, you can secure your family’s future. Plan strategically for your children’s education and retirement, ensuring financial stability. Stay disciplined, adaptable, and focused on long-term goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

Asked by Anonymous - Nov 19, 2024Hindi
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Hi Hemant, I am 28 and recently started my investment journey. Initially I thought of it as retirement funds but looks like I need to redeem it every 5-6 years cause of my sister's wedding, my wedding, future children education and the list just goes on. Is there any way I can invest for retirement considering I don't have to redeem it for emergency purposes.
Ans: Your concern about long-term retirement planning while managing intermediate financial goals is valid. It's great that you’ve started early, as time is your biggest asset in building wealth. Below is a detailed 360-degree financial plan to help you achieve your retirement goals without derailing your investments for emergencies or other life events.

Understand the Need for Separate Goals
Segregate Financial Goals: Clearly define your financial objectives—retirement, weddings, emergencies, and children’s education.

Allocate Separate Investments: Avoid using your retirement corpus for other purposes by setting up dedicated funds for each goal.

Prioritise Goals: List out goals based on timelines (short-term, medium-term, and long-term) to allocate investments accordingly.

Establish an Emergency Fund
Build an emergency fund covering 6-12 months of your expenses.

Use secure, liquid options like fixed deposits or liquid mutual funds for easy access.

Replenish the fund immediately after usage to maintain financial stability.

This buffer ensures emergencies don’t disrupt your other investments.

Set Up a Retirement-Exclusive Portfolio
Separate Retirement Corpus: Open a dedicated account to manage retirement funds.

Use Long-Term Instruments: Invest in equity mutual funds or other growth-oriented assets for high returns over time.

Automate Investments: Use systematic investment plans (SIPs) to build discipline in retirement investing.

Lock-in Options: Consider instruments like NPS, which discourage premature withdrawal, keeping your retirement funds intact.

Plan for Life Milestones
Sister’s Wedding: Plan with a target date in mind and invest in short-term instruments like ultra-short-term or hybrid mutual funds.

Your Wedding: Mid-term goals (5-7 years) align with balanced funds or hybrid equity mutual funds for moderate growth with reduced risk.

Children’s Education: Use child-specific investment products like Sukanya Samriddhi Yojana (if applicable) or equity funds for long-term growth.

Build a Diversified Investment Portfolio
Short-Term Needs: Keep funds in fixed-income instruments for stability and liquidity.

Medium-Term Goals: Invest in hybrid mutual funds, which balance equity and debt exposure.

Long-Term Goals: Focus on equity mutual funds to harness market growth over 10-20 years.

Avoid Investment-Linked Insurance: Use term insurance for life coverage, not for wealth accumulation.

Enhance Your Financial Discipline
Stick to the Plan: Resist the urge to redeem retirement investments prematurely.

Create Goal-Based Accounts: Physically or mentally separate funds for each objective.

Automate Savings: Set up automatic transfers into various investment accounts.

Insurance to Protect Wealth
Health Insurance: Cover yourself adequately to avoid using savings for medical expenses.

Life Insurance: Buy a term insurance plan with a sufficient sum assured to protect dependents.

Maximise Tax Benefits
Use tax-saving options under Section 80C, such as PPF and ELSS funds, for dual benefits of saving taxes and growing wealth.

Avoid redeeming tax-saving instruments prematurely, as this affects long-term compounding.

Monitor and Review Regularly
Review your portfolio every 6-12 months to track progress and rebalance.

Adjust investments based on market conditions and your evolving financial goals.

Final Insights
Your retirement plan should remain untouched. Life events like weddings and children’s education require separate financial strategies. By prioritising and diversifying your investments, you can achieve all your goals without compromising your financial freedom. Early planning and disciplined execution are the keys to long-term success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

Asked by Anonymous - Nov 19, 2024Hindi
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I am a single parent with an income of 80k per month. I have a PPF of 3 lakhs, real estate worth 10 lakh. My monthly expense is 45k. What should I do for financial freedom. I do not have any loan and have own house
Ans: Your current financial position is stable. You have no loans and own a house.

A monthly income of Rs. 80,000 provides good stability.

With monthly expenses at Rs. 45,000, you can save Rs. 35,000.

A PPF corpus of Rs. 3 lakhs is commendable.

Real estate worth Rs. 10 lakhs further strengthens your portfolio.

However, to achieve financial freedom, proper planning is essential.

Below is a detailed financial plan tailored to your goals and situation.

Understand Financial Freedom

Financial freedom means covering all expenses without stress.

It includes emergencies, child’s future, and your retirement.

A strategic approach to investments is crucial for achieving this.

Your plan should focus on growth and stability.

Prioritise Emergency Fund

An emergency fund covers six months of expenses.

Set aside Rs. 2.7 lakhs in a secure, liquid option.

This fund will safeguard against unexpected events.

Do not use this amount for any other purpose.

Evaluate and Optimise Your Savings

Your PPF is an excellent choice for risk-free returns.

Continue contributing regularly to maximise its benefits.

PPF interest is tax-free, helping you grow your wealth steadily.

Ensure you contribute the maximum allowable limit yearly.

Invest for Long-Term Goals

For long-term wealth, consider mutual funds managed by experts.

Actively managed funds can deliver higher returns than direct funds.

Diversify investments across equity, hybrid, and debt mutual funds.

Invest systematically every month through SIPs for disciplined saving.

Use funds with a track record of performance and a professional approach.

Avoid Over-Reliance on Real Estate

Real estate lacks liquidity and may have inconsistent returns.

Focus more on financial instruments for better growth.

This approach ensures flexibility and diversification.

Plan for Retirement

Set a retirement corpus goal based on future needs.

Calculate your post-retirement monthly expenses with inflation in mind.

Invest in equity mutual funds for long-term wealth creation.

Shift to safer options as you near retirement.

Review your plan periodically to stay on track.

Secure Your Child’s Future

Invest in equity-oriented funds for higher returns over time.

Start early to take advantage of compounding.

Avoid investment-linked insurance policies as they offer low returns.

Choose pure term insurance for protection instead.

Health and Life Insurance

Check your health insurance coverage and enhance it if needed.

Your current income supports buying additional health cover.

Ensure you have term life insurance for your family’s safety.

Tax Planning

Optimise tax-saving investments under Section 80C.

PPF, ELSS funds, and NPS are excellent tax-saving tools.

ELSS funds also provide equity exposure with a tax benefit.

Consult your Certified Financial Planner for detailed tax advice.

Regular Monitoring and Review

Review your financial portfolio every year.

Adjust investments based on changing life stages and goals.

Stay updated on new financial opportunities and tax rules.

Final Insights

You have a strong foundation for financial freedom.

By following this detailed plan, you can achieve your goals.

Consistency and discipline are the keys to success.

Seek advice from a Certified Financial Planner for personalised guidance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

Asked by Anonymous - Nov 19, 2024Hindi
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I own few flats that generate a monthly rental income of Rs95,000. Additionally, I have a few residential land properties and no outstanding loans. Including all my savings, I have approximately Rs1.8 crores. I am into IT field working in an MNC My current monthly take-home salary is Rs2.9 lakhs. I have a daughter who is currently pursuing her B.Tech. I plan to take a six-month break in March 2025, and after that, if I don't secure another job, can I afford to retire?
Ans: Your financial foundation is commendable. You have diverse assets and no liabilities.

Your rental income of Rs 95,000 is consistent and predictable.

Owning land and flats provides financial security and growth potential.

A monthly salary of Rs 2.9 lakhs places you in a strong earning bracket.

Savings of Rs 1.8 crores give you flexibility and liquidity.

With no loans, your financial commitments are minimal.

Supporting your daughter in her B.Tech is admirable.

Your situation is ideal for evaluating early retirement.

Key Factors to Evaluate Retirement Readiness
1. Monthly Living Expenses
Analyse your current lifestyle expenses, including rent, food, utilities, and travel.

Account for increased expenses during your six-month break.

Ensure your rental income can cover your basic needs post-retirement.

Plan for additional expenses like hobbies, healthcare, and travel.

2. Daughter’s Higher Education Costs
Calculate the remaining costs for her education and any future needs.

Ensure funds are available for her marriage or further studies.

Avoid liquidating long-term assets for these short-term needs.

3. Health and Emergency Planning
Medical costs rise with age. Invest in a comprehensive health insurance plan.

Set aside an emergency fund equal to 12 months of expenses.

Consider critical illness cover for additional health-related security.

4. Lifestyle and Goals After Retirement
Define your desired lifestyle. Include travel, leisure, or new ventures.

Account for inflation in your retirement expense planning.

Building a Retirement Corpus
1. Existing Investments
Review current investments for growth and diversification.

Avoid overexposure to a single asset class, like real estate.

2. Mutual Funds for Long-Term Growth
Shift savings into diversified, actively managed equity mutual funds.

Actively managed funds outperform index funds in emerging markets like India.

Regular plans through an MFD with CFP credentials ensure consistent support.

Equity mutual funds offer inflation-beating returns over the long term.

3. Debt Funds for Stability
Allocate part of your portfolio to debt mutual funds.

Debt funds balance risks and offer steady returns.

They provide easy liquidity during market volatility.

4. Dividend-Based Strategies
Consider high-quality mutual funds with dividend payout options.

Dividend income can supplement your rental earnings.

Maximising Rental Income
Review current rental agreements for scope to increase rents.

Focus on high-demand areas to maximise returns on vacant properties.

Regular maintenance enhances property value and rent potential.

Avoid over-reliance on rental income alone for retirement.

Tax Optimisation
1. Rental Income
Rental income is taxed under "Income from House Property."

Use deductions like municipal taxes and 30% standard deduction.

2. Mutual Fund Returns
For equity mutual funds, LTCG above Rs 1.25 lakhs is taxed at 12.5%.

STCG from equity mutual funds attracts a 20% tax rate.

Debt funds’ LTCG and STCG are taxed as per your income tax slab.

Plan redemptions carefully to minimise tax liability.

Contingency for Post-Break Scenario
Use the six-month break to assess alternative income streams.

Evaluate freelance or consulting opportunities in IT.

Start passive income ventures like online courses or content creation.

Additional Recommendations
Track inflation and adjust your plans accordingly.

Avoid new real estate investments as they are illiquid and non-diversified.

Reinvest rental income surplus into mutual funds for compounding growth.

Regularly review your portfolio with your Certified Financial Planner.

Finally
You are financially secure and prepared to take a career break.

However, ensure your retirement corpus matches your desired lifestyle.

With proper planning, early retirement is achievable and sustainable.

Focus on a balanced portfolio and keep future goals in mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

Asked by Anonymous - Nov 19, 2024Hindi
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Hello Sir.I am 41 yrs old female working in govt bank.I have 31 lacs fd,32 lacs nps,10 lacs mf,other benefits 15 lacs if i take early retirement. I have assets in real state around 1.50 cr.living in own house worth rs 90lacs.My spouse is self employed with income which is little unstable wheareas my income is 1lac p.m.We hav one child 10 yrs old.Our current expenses are 80000/= p.m .we hav term and health insurance for our family for 50 lacs. i want to know what are your opinion if i take early retirement?if my savings are enough? Is is financially .good for future or may raise financial issues?I may work if i get some interesting work in future but not sure about it?
Ans: Early retirement is an important financial decision. Your situation requires careful analysis from all angles. Below is a detailed review to help you assess your readiness.

Current Financial Standing
Fixed Deposits: Rs. 31 lakhs provides stability but low returns.

NPS: Rs. 32 lakhs ensures retirement-focused growth but lacks immediate liquidity.

Mutual Funds: Rs. 10 lakhs adds diversification and long-term potential.

Early Retirement Benefits: Rs. 15 lakhs can act as a financial cushion.

Real Estate: Assets worth Rs. 1.50 crore are non-liquid and hold long-term value.

Own House: Worth Rs. 90 lakhs; eliminates rent and provides security.

Income and Expenses Analysis
Current Monthly Income: Rs. 1 lakh ensures financial stability.

Spouse’s Income: Variable, adding uncertainty to household cash flow.

Monthly Expenses: Rs. 80,000, leaving Rs. 20,000 surplus from your income.

Strengths in Your Financial Profile
Term and Health Insurance: Rs. 50 lakhs covers major uncertainties for your family.

Child’s Age: At 10 years, financial needs will peak over the next decade.

Savings Portfolio: A balanced mix of fixed deposits, NPS, and mutual funds.

Concerns About Early Retirement
1. Long-Term Expense Management

Current expenses of Rs. 80,000 will rise due to inflation.

Post-retirement, expenses will rely on your investments and spouse’s income.

2. Educational Expenses

Your child’s higher education will need a significant corpus in 8–10 years.

Ensure funds are allocated early to avoid last-minute stress.

3. Retirement Corpus Sufficiency

NPS and mutual funds may need more time to grow for retirement.

Fixed deposits may lose value against inflation due to low returns.

4. Uncertain Income Post-Retirement

Spouse’s fluctuating income may create cash flow gaps.

Your re-employment plans are uncertain and may not materialise.

Recommendations to Strengthen Your Financial Plan
1. Build a Robust Retirement Corpus

Continue contributing to NPS for tax benefits and retirement savings.

Diversify into equity funds for long-term growth with professional advice.

2. Improve Liquidity in Investments

Convert part of your fixed deposits into balanced mutual funds.

Balanced funds ensure steady growth with moderate risk.

3. Allocate for Child’s Education

Start a dedicated education fund using a mix of equity and hybrid funds.

This will help meet your child’s higher education needs stress-free.

4. Manage Spouse’s Income Volatility

Create an emergency fund equal to 12 months’ expenses (Rs. 10–12 lakhs).

This will cushion the family during any income disruptions.

5. Optimise Current Expenses

Save at least Rs. 10,000–15,000 monthly from current surplus income.

Direct these savings into systematic investment plans (SIPs).

6. Avoid Dependence on Real Estate

Real estate is illiquid and not suitable for meeting short-term needs.

Focus on liquid investments like mutual funds for flexibility.

7. Tax Planning for Investments

Gains from equity mutual funds above Rs. 1.25 lakh attract 12.5% LTCG tax.

Plan withdrawals strategically to minimise taxes.

8. Review and Update Insurance

Ensure your term insurance covers both liabilities and future goals.

Review health insurance adequacy annually to account for medical inflation.

Financial Projections
Use professional assistance to project retirement expenses and corpus growth.

Ensure your retirement corpus can support Rs. 1 lakh per month (inflation-adjusted).

Factor in child’s education and future medical costs.

Final Insights
Early retirement is possible with careful adjustments to your portfolio. Focus on building a larger retirement corpus while ensuring liquidity for short-term goals. Spouse’s income uncertainty and your child’s education are key factors to consider. Regular reviews with a Certified Financial Planner can provide clarity and direction.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

Asked by Anonymous - Nov 19, 2024Hindi
Money
My take home salary is 3.2L/month. I am 45yrs. I have 1. House worth 2cr which I live in. 2. Plot worth 4cr 3. Plot worth 1cr 4. Equity worth 20L 5. Investing in SSY of 1.5L/yr 6. RSU in US worth 6.5cr 7. Mutual fund worth 25L 8. PF 1.2cr 9. House worth 20L No loans. Have 2 kids, 15yrs and 7yrs. How to plan financially well to have good retirement in another 5 yrs.
Ans: Assessment of Your Current Financial Situation
Your current financial position is strong, with significant assets and no liabilities.
You have a diversified portfolio, including real estate, equity, mutual funds, PF, and RSUs.
Your goal to retire in five years is realistic with proper planning.
Let us create a step-by-step roadmap for your retirement planning.

1. Define Retirement and Post-Retirement Goals
Assess your retirement lifestyle expenses, accounting for inflation.
Plan for children's education, as they will need funds soon.
Include health and travel-related expenses in your goals.
This clarity helps in creating a focussed strategy.

2. Evaluate Asset Allocation
Your portfolio is real-estate heavy. It lacks liquidity.
Allocate assets optimally among equity, debt, and cash-like instruments.
Balance growth and stability to protect and grow wealth.
Liquid assets ensure financial flexibility during retirement.

3. Optimise Investments in Real Estate
The two plots worth Rs 4 crore and Rs 1 crore are substantial.
Consider selling one plot and investing the proceeds in financial assets.
Reallocate funds into mutual funds or fixed-income instruments for better returns.
Avoid retaining underutilised real estate, as it lacks steady income.

4. Leverage Equity and Mutual Funds for Growth
Your equity and mutual funds are Rs 45 lakhs in total.
Increase allocation to equity funds via systematic investments.
Focus on actively managed funds for better returns over passive funds.
Actively managed funds adapt better to market changes.

5. US RSU Management
Your RSUs worth Rs 6.5 crore are a significant asset.
Evaluate their vesting and taxation rules carefully.
Gradually diversify these holdings to reduce dependency on a single company.
This mitigates the risk of over-concentration.

6. Strengthen Your Debt Portfolio
Your PF corpus of Rs 1.2 crore provides safety and regular growth.
Add high-quality debt mutual funds for medium-term stability.
Use these funds for goal-specific needs like education and retirement income.
A robust debt allocation safeguards against market volatility.

7. Plan for Children’s Education
Your children’s education is a significant financial goal.
Use debt funds and balanced hybrid funds for the 15-year-old’s education.
For the 7-year-old, allocate to equity funds for long-term growth.
Align investments to timelines for these goals.

8. Emergency Fund and Insurance
Keep 6-12 months’ expenses as an emergency fund in liquid mutual funds.
Ensure you have adequate health and term insurance coverage.
Cover medical inflation and your family’s financial security post-retirement.
These safeguards protect against unexpected events.

9. Tax Efficiency and Cash Flow Planning
Understand the taxation on equity and debt mutual funds under the new rules.
Redeem equity strategically to stay within the LTCG threshold.
Invest proceeds in tax-efficient instruments for retirement income.
Efficient tax planning enhances post-retirement cash flow.

10. Retirement Corpus Build-Up
Estimate the corpus required to sustain your post-retirement lifestyle.
Use your PF, mutual funds, equity, and RSUs to create this corpus.
Allocate to systematic withdrawal plans for regular income.
Ensure your corpus lasts for at least 30 years post-retirement.

11. Review Investment-Cum-Insurance Policies
If you hold LIC or ULIPs, assess their returns and surrender value.
Reinvest the surrendered amount in equity mutual funds.
Separate your insurance from investments for better efficiency.
This approach improves returns and provides focused insurance coverage.

12. Monitor and Rebalance Portfolio
Review your portfolio every six months with a certified financial planner.
Rebalance asset allocation when equity or debt exposure exceeds limits.
Adjust allocations based on changing goals and market conditions.
Regular monitoring ensures your portfolio remains aligned with goals.

13. Health and Legacy Planning
Invest in comprehensive health insurance to cover rising healthcare costs.
Create a will or trust to manage your estate distribution.
Discuss your legacy plans with your family to avoid conflicts.
This ensures your wealth benefits your loved ones as intended.

14. Avoid Common Mistakes
Don’t over-invest in real estate due to its illiquid nature.
Avoid index funds as they don’t provide active market adjustments.
Refrain from relying solely on direct mutual fund investments.
Invest through a certified financial planner for expert advice.

Final Insights
Your strong asset base, coupled with disciplined planning, positions you well for retirement. Diversify investments, enhance liquidity, and focus on balanced growth to meet your goals. Professional guidance ensures efficient wealth management for a secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

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Dear Sir / Madam, I am 37 years old doing the following SIP From last 18 months Quant Active Fund:- 6000/-, Mahindra Manulife Multi Cap Fund 6,000/- Nippon India Small Cap Fund:- 4000/- is my fund selection ok or do I needed to do some changes???
Ans: Your current SIPs show a thoughtful and diversified approach. Below is an evaluation of your fund selection and recommendations to strengthen your portfolio for long-term growth.

Key Observations of Your Portfolio
Well-structured categories: Your portfolio includes multi-cap, active, and small-cap funds.

Monthly allocation: You are investing Rs. 16,000 per month, which is commendable.

Consistent contributions: 18 months of disciplined SIPs reflect financial commitment.

Strengths of Your Fund Selection
Multi-cap Exposure: Multi-cap funds balance between large, mid, and small-cap stocks. They can adapt to market conditions.

Small-cap Inclusion: Small-cap funds can deliver high returns in the long term but are volatile.

Active Fund Choice: Actively managed funds provide the advantage of expert-driven stock selection.

Areas That May Require Attention
1. Portfolio Overlap

Similar stocks in different funds can lead to duplication.

Check for overlap between your funds to avoid unnecessary risk.

2. Risk Management

Small-cap funds carry higher risk due to market volatility.

Balance this with more stable large-cap or hybrid funds.

3. Tax Implications

Gains above Rs. 1.25 lakh in equity mutual funds attract 12.5% LTCG tax.

Keep this in mind while planning long-term withdrawals.

4. Growth Potential vs Stability

A heavy small-cap exposure may affect portfolio stability.

Add funds with consistent large-cap performance for balance.

Recommendations to Improve Your Portfolio
1. Diversify Further

Include a balanced or hybrid fund for risk mitigation.

This can stabilise returns during market downturns.

2. Focus on Long-term Goals

Align your portfolio with financial goals like retirement or wealth creation.

Reassess your SIP allocation every 1–2 years.

3. Avoid Direct Fund Investments

Direct funds require constant tracking and expertise.

Regular funds through an MFD and CFP offer professional advice and tracking.

4. Increase Equity Exposure Gradually

Gradually increase large-cap and mid-cap fund allocation.

This ensures stable growth with lower risk.

5. Avoid Index Funds

Index funds lack flexibility and do not adapt to changing markets.

Actively managed funds outperform in the long run due to expert strategies.

6. Rebalance Annually

Rebalancing ensures your portfolio stays aligned with risk appetite and goals.

Shift between equity and debt based on market conditions.

Taxation and Withdrawal Strategies
1. Tax-efficient Planning

Plan redemptions to stay within the Rs. 1.25 lakh LTCG limit.

Avoid short-term redemptions to minimise higher tax liabilities.

2. Systematic Withdrawal Plans (SWPs)

Use SWPs for future income needs.

This keeps your corpus intact while providing regular income.

Final Insights
Your SIP selection is strong and aligns with wealth creation goals. Minor adjustments can enhance diversification and reduce overlap. Maintain discipline and review your portfolio annually with a Certified Financial Planner. This approach will help you achieve long-term financial success.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

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Hello, I have a saving of 2 lacks per month after expenses. Can you suggest me investment plan for next 10-15years. My age is 37.
Ans: Assessment of Current Situation
You save Rs 2 lakhs monthly. This is a significant surplus.
At 37 years of age, you have a long investment horizon of 10-15 years.
This is a prime period for wealth creation, leveraging compounding.
Let us explore a detailed 360-degree investment strategy for you.

1. Set Clear Financial Goals
Define goals like retirement, children’s education, or a dream home.
Split these into short-term, medium-term, and long-term goals.
This ensures clarity in investment allocation.

2. Build a Safety Net
Keep 6-12 months' worth of expenses in an emergency fund.
Invest this in a liquid mutual fund for accessibility and safety.
This fund acts as a buffer for unexpected situations.

3. Start with Health and Life Insurance
Ensure you have adequate health insurance for your family.
Opt for a term insurance policy with a high sum assured.
This safeguards your dependents financially.

4. Diversify into Equity Mutual Funds
Allocate 60-70% of your savings to equity mutual funds.
Choose actively managed funds for higher potential returns.
Actively managed funds are better for market outperformance compared to index funds.

5. Opt for Regular Mutual Funds via an MFD
Investing through a certified financial planner provides guidance.
MFDs track your portfolio performance and offer timely advice.
Direct funds lack this expert oversight, increasing risks for DIY investors.

6. Focus on Debt Mutual Funds for Stability
Allocate 20-30% to debt funds for stable returns.
Use these for medium-term goals or to rebalance your portfolio.
Debt funds provide stability against market volatility.

7. Explore International Equity Funds
Allocate 10-15% of your savings to international equity funds.
They provide global diversification and hedge against currency fluctuations.
This ensures your portfolio grows beyond Indian markets.

8. Avoid Investment-Cum-Insurance Policies
If you hold ULIPs or traditional LIC policies, consider surrendering them.
Reinvest the proceeds into mutual funds for better returns.
Separate insurance from investments for clarity and efficiency.

9. Tax Planning with Investments
Use ELSS funds for tax-saving under Section 80C.
Review LTCG and STCG taxes when redeeming mutual funds.
Plan investments to optimise taxes while achieving growth.

10. Invest Gradually via SIPs and STPs
Start systematic investment plans (SIPs) in equity funds.
Use systematic transfer plans (STPs) to move funds from debt to equity.
This approach mitigates risk and averages out costs.

11. Monitor and Rebalance Portfolio Regularly
Review your portfolio every 6-12 months with a CFP.
Rebalance when asset allocations deviate significantly.
This ensures your investments stay aligned with goals.

12. Avoid Common Pitfalls
Don’t invest heavily in speculative assets like cryptocurrencies.
Avoid over-diversification, which dilutes returns.
Stick to disciplined investing and avoid impulsive decisions.

13. Leverage Compounding Benefits
Reinvest all dividends and capital gains.
Compounding works best over long investment horizons.
Patience and consistency are key for wealth creation.

14. Track Expenses and Increase Savings Rate
Regularly review your expenses to increase savings.
Direct additional savings to investments for faster wealth growth.
Every extra rupee invested accelerates financial independence.

15. Have a Comprehensive Retirement Plan
Use equity for long-term growth and debt for stability.
Create a corpus that supports your lifestyle post-retirement.
Start early to take advantage of your earning years.

Final Insights
Your consistent savings of Rs 2 lakhs monthly is a great starting point. By following a balanced, goal-oriented approach, you can achieve significant financial milestones in 10-15 years. Regular monitoring, disciplined investing, and expert guidance ensure sustained growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

Asked by Anonymous - Nov 10, 2024Hindi
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I am serving in Central govt.My current take home salary is 90000/- per month.I am also receiving 21000/- per month as rental income.My husband is retired with monthly pension of 50000/- and rental income of 27000/- per month. I have a mutual fund corpus in equity mutual funds of 1.15 cr as on date and value of shares is 50 lakhs as on date.I also have investment in debt and ppf of about 25 lakhs.Our monthly expenses are around 60000/-.I have ongoing sips of 25000/ in mutual funds.I am thinking of taking VRS in 3 years.Will my corpus last for next 25 years.My Husbands investment is also around 4 cr.I have one son who is settled in England.He will get married in around 2 years.
Ans: You are in a strong financial position with multiple income sources and significant investments. Below is a detailed 360-degree assessment of your current situation, investment portfolio, and future planning to ensure financial security for the next 25 years.

Current Income and Expenses
Your monthly household income is Rs. 1.88 lakh from salaries, pensions, and rentals.

Your monthly expenses are Rs. 60,000, leaving a surplus of Rs. 1.28 lakh.

Ongoing SIPs of Rs. 25,000 indicate disciplined financial planning.

Existing Investment Portfolio
Mutual Fund Corpus: Rs. 1.15 crore invested in equity mutual funds ensures long-term growth.

Shares Portfolio: Rs. 50 lakh provides additional exposure to equity markets.

Debt and PPF Investments: Rs. 25 lakh ensures stability and low-risk returns.

Husband’s Investment Portfolio: Rs. 4 crore provides a strong financial cushion.

Key Retirement Planning Considerations
1. Planning for Your VRS in 3 Years

Your VRS in 3 years requires careful cash flow management.

Ensure income from investments can replace your current salary.

2. Estimating Future Income Needs

Adjust expenses for inflation over the next 25 years.

Account for increased healthcare and lifestyle costs during retirement.

3. Generating Sustainable Post-Retirement Income

Use Systematic Withdrawal Plans (SWPs) from mutual funds for monthly income.

Ensure withdrawal rates do not deplete the principal corpus.

Hybrid and balanced funds can offer stability with moderate growth.

4. Diversify Across Asset Classes

Continue with equity mutual funds for growth.

Increase allocation to debt funds as you approach retirement.

Avoid direct shares for retirement income due to market volatility.

5. Tax Efficiency in Investments

Equity fund LTCG above Rs. 1.25 lakh is taxed at 12.5%.

STCG on equity and all gains from debt funds are taxed as per your slab.

Plan withdrawals to optimise tax liability.

6. Inflation Protection for Corpus

Increase equity exposure to beat inflation over time.

Avoid entirely shifting to debt to ensure capital growth.

Special Goals and Events
1. Managing Son’s Marriage Expenses

Allocate a separate budget for your son’s wedding in two years.

Use short-term debt funds or liquid funds for this purpose.

2. Health Insurance and Emergency Fund

Ensure adequate health insurance for yourself and your husband.

Keep Rs. 15–20 lakh in a liquid fund as an emergency corpus.

3. Legacy Planning

Update your wills and nominate beneficiaries for all investments.

Discuss legacy distribution with your son for clarity.

Disadvantages of Index Funds and Direct Mutual Funds
Index Funds: These do not adapt to market conditions. Active funds can provide better returns.

Direct Funds: Managing direct funds requires expertise and time. Invest through a Certified Financial Planner for regular tracking.

Actionable Steps to Strengthen Financial Security
1. Continue SIPs Until Retirement

Increase SIP amounts to utilise surplus income effectively.
2. Rebalance Portfolio Every Year

Shift a small portion from equity to debt to reduce risk.

Maintain a balanced portfolio with 60% equity and 40% debt.

3. Consider a Certified Financial Planner’s Guidance

A CFP can customise strategies based on your unique goals.

They ensure investments align with your risk appetite and time horizon.

4. Avoid Real Estate as an Investment

Real estate has illiquidity and high maintenance costs.

Mutual funds and debt instruments are better for consistent income.

5. Create a Pension-Like Structure

Use SWPs from mutual funds to mimic a pension plan.

This ensures regular monthly income without locking in capital.

Final Insights
Your financial assets and investments are well-diversified and substantial. With proper planning, your corpus can easily last 25 years. Focus on maintaining a balanced portfolio and adjusting for inflation. Plan for your son’s marriage, healthcare needs, and legacy distribution. A disciplined approach will ensure financial security for you and your husband.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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Milind Vadjikar  |665 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 19, 2024

Asked by Anonymous - Nov 19, 2024Hindi
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I am 42 years old working as a Senior Manager with a public sector company. I have already completed 20 years of service and planning to take VRS after 6 years. I have a son who is 11 years of age and wife who is a homemaker. My net monthly income is around Rs 3 lacs . I have one home loan of Rs 140 lacs and car loan of Rs 10 lacs availed recently for 6 years. My monthly expenses are total Rs 154000/- ( Rs 133000 EMI and Rs 60000 household and education expenses). I am presently investing SIP of Rs 1.00 lac per month. My present portfolio is Rs 83 lacs in MF and Rs 50 lacs in Provident fund of employer. I have two house property and one of them is debt free. My wife have jewelry of around Rs 25 lacs. After VRS, I would receive monthly pension of around Rs 85k which would increase every year by around 5% due to dearness relief and would be sufficient to cover my monthly expenses. After 6 years I would receive around Rs 150 lacs as terminal benefit after retirement. My MF corpus would grow to around 250 lacs (assuming growth of 12% as all MF are in equity-based funds). The car loan would be closed by then and home loan outstanding would be around 120 lacs. I am planning to utilize total corpus of Rs 400 lacs in following manner: Fixed Deposit: Rs 80 lacs ( Rs 40 lacs for education of kid and Rs 40 lacs for emergency needs) Pre payment of Rs 40 lacs towards home loan Invest Rs 150 lacs in debt and hybrid MF and avail 6% yearly STP for repayment of home loan o/s Rs 80 lacs ( as EMI would reduce to around Rs 69k). I want to continue home loan to avail interest and 80C rebate. Invest Rs 20 lacs in renovation of another existing old home. Keep Rs 100 lacs invested in equity based mutual funds Saving Account: Rs 10 lacs for recurring and emergency fund I have one term insurance of Rs 3 cr and health insurance of Rs 20 lacs for my family. I want to know whether with this planning I would be able to retire comfortably. Thanking you in advance.
Ans: Hello;

You have mentioned STP but I believe it is SWP(6%) from a debt hybrid MF.

Conservative hybrid debt fund returns generally are in 8-9% range and if you do 6% SWP, your corpus will not be inflation proof and prone to significant decrease during negative or flat returns from funds. Pure equity funds should not be considered for SWP in retirement due to high risks.

Therefore I strongly recommend SWP rate should not go beyond 3% at any time.

So accordingly you may have to allocate 300 L in conservative hybrid debt funds and SWP at 3% can yield monthly income of around 67.5 K (post-tax).

You may invest balance 100 L as 40 L for kid's education, 40 L for partial home loan repayment, 10 L for old house renovation and 10 L for emergency.

Carrying home loan into retirement for some income tax deduction is not a good idea but it is ultimately your choice.

You have another option of buying a joint annuity for life for yourself and your spouse with return of purchase price to your nominee (250 L).

Considering 6% annuity rate you may expect post tax monthly income of 87.5 K. You may get a better annuity rate if you check with different life insurance companies.

This gives you scope for allocating funds as, 40 L for kid's education, 40 L for home loan repayment, 20 L for old house renovation, 10 L as emergency fund and balance 40 L invested in balanced advantage and muti asset allocation funds instead of pure equity mutual funds.(Relatively lower risk).

Best wishes;
X: @mars_invest
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Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

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I am 71 years old.My investment in Mutual funds is 70 lac (lumpsum)and Rs 40000 per month.I have a partnership business from where I draw around 2 lac per month.How can I have around 2 lac per month from MF so that I feel safer and securer
Ans: At 71 years of age, ensuring safety and stability is essential. You have built a solid financial foundation. A combination of mutual fund investments and your business income provides flexibility for sustainable financial security. Below is a detailed 360-degree plan to achieve your goal of Rs. 2 lakh monthly income from mutual funds.

Understanding Your Current Situation
Existing Mutual Fund Investments: Rs. 70 lakh in lump sum and Rs. 40,000 monthly SIP are commendable.

Business Income: Drawing Rs. 2 lakh monthly from your partnership adds stability.

Primary Goal: Generating Rs. 2 lakh monthly from mutual funds while ensuring financial safety.

Key Recommendations for Generating Regular Income
1. Use Systematic Withdrawal Plans (SWP) for Consistent Cash Flow

SWPs offer a fixed monthly withdrawal from mutual funds.

They allow you to continue investing while receiving regular income.

Choose equity and hybrid mutual funds for a balanced risk-reward ratio.

Select a withdrawal amount less than the expected returns to preserve capital.

2. Diversify Across Fund Types for Stability

Maintain a mix of equity, hybrid, and debt funds for portfolio balance.

Equity funds provide growth potential. Hybrid funds offer moderate risk. Debt funds ensure safety.

This diversification reduces dependence on any one fund type.

3. Rebalance Your Portfolio Periodically

Market fluctuations can shift asset allocation.

Review your portfolio every six months to ensure proper balance.

Increase debt fund allocation as you age to reduce risks.

4. Evaluate Tax Implications for Withdrawal

Equity fund LTCG above Rs. 1.25 lakh is taxed at 12.5%.

STCG is taxed at 20%.

Debt fund gains are taxed as per your income slab.

Plan withdrawals to minimize tax impact.

5. Avoid Overdependence on Business Income

Business income may fluctuate or reduce over time.

Mutual funds can bridge any income gaps as a reliable alternative.

6. Maintain an Emergency Corpus

Set aside Rs. 10–15 lakh in a liquid fund for emergencies.

Ensure quick access during unforeseen situations.

7. Avoid Index and Direct Funds for Income Goals

Index funds lack active management, affecting returns during volatility.

Direct funds can complicate tracking and require extensive research.

Instead, prefer regular plans through a certified financial planner (CFP) for expert management.

8. Evaluate Insurance Needs

Ensure adequate health insurance coverage for medical emergencies.

Avoid investment-linked insurance policies like ULIPs.

Focus solely on standalone insurance products.

9. Plan for Inflation Protection

Adjust your withdrawal strategy to account for rising costs.

Reinvest surplus returns into equity or hybrid funds for growth.

Additional Suggestions for Enhanced Safety
1. Regular Income Options within Mutual Funds

Hybrid funds can provide steady returns with low volatility.

Monthly income plans (MIPs) offer consistent payouts.

2. Focus on Legacy Planning

Consider your family’s future needs while planning withdrawals.

Maintain a will and nominate beneficiaries for your investments.

3. Periodic Review with a Certified Financial Planner

Engage with a CFP to reassess your portfolio regularly.

A CFP can help align your investments with your evolving goals.

Final Insights
Your financial position is strong, and your goal of Rs. 2 lakh monthly from mutual funds is achievable. By using SWPs, diversifying investments, and rebalancing periodically, you can secure regular income without compromising capital. Stay focused on disciplined planning and professional guidance for long-term financial safety.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

Asked by Anonymous - Nov 18, 2024Hindi
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I am 44 years old with 2 kids in class 11 and 10. I have 2 Flats without any loan. I have total 22 lacs ( in Stocks), 34 lacs in nutual funds, 40 lacs in FDs and 37 lacs in PF. If I have to retire tomorrow, how much Corpus will I need.
Ans: Retiring at 44 is an ambitious goal, but with careful planning, it’s achievable. Your current assets and financial goals must align to sustain your post-retirement life. Here's a detailed assessment and strategy.

1. Estimating Retirement Corpus Needs

Retirement requires a large corpus to ensure financial independence.

The corpus must cover daily expenses, medical costs, and lifestyle needs.
It should also provide for children’s education and marriages if not already funded.
Assume inflation-adjusted withdrawals for 40+ years, as life expectancy could extend to 85.
A Certified Financial Planner can help calculate the exact amount based on your lifestyle and expenses.

2. Evaluating Your Current Financial Assets

Your assets are impressive and form a strong financial base.

Stocks (Rs. 22 Lacs): This portfolio may provide high growth but carries risks.
Mutual Funds (Rs. 34 Lacs): A well-diversified portfolio of actively managed funds ensures moderate to high returns.
Fixed Deposits (Rs. 40 Lacs): These offer stability but are less effective against inflation.
Provident Fund (Rs. 37 Lacs): This corpus is a reliable, long-term asset.
Together, these assets provide a solid starting point for retirement planning.

3. Estimating Monthly Expenses After Retirement

Your monthly expenses will determine the required corpus.

Identify essential expenses like groceries, utilities, and healthcare.
Consider discretionary expenses like travel and hobbies for a comfortable lifestyle.
Factor in children's education and marriage expenses as immediate needs.
Ensure you account for inflation, which erodes purchasing power over time.

4. Planning for Children’s Education and Marriage

Your children’s education and marriage are significant financial commitments.

Class 11 and 10 suggest education expenses will occur soon.
Factor in tuition fees, living expenses, and any higher education abroad.
Marriage costs will depend on your family’s traditions and preferences.
Allocate separate funds for these goals to avoid disrupting your retirement corpus.

5. Structuring Your Retirement Portfolio

A retirement portfolio should balance growth, stability, and liquidity.

Equity Investments: Retain part of your stocks and mutual funds for long-term growth.
Debt Instruments: Use fixed deposits and provident funds for stable returns.
Balanced Approach: Diversify across asset classes to minimise risks.
Keep a portion in liquid assets for emergencies and short-term needs.

6. Avoiding Over-Reliance on Fixed Deposits

Fixed deposits provide safety but may not outpace inflation.

Their post-tax returns are often lower than inflation rates.
Redeem some FDs and reinvest in diversified mutual funds for higher growth.
Focus on actively managed funds that adapt to market conditions better.
This will enhance your portfolio’s ability to sustain long-term withdrawals.

7. Accounting for Healthcare and Emergency Needs

Healthcare costs can rise sharply as you age.

Maintain a comprehensive health insurance policy for yourself and your family.
Ensure your insurance covers critical illnesses and hospitalisation.
Set aside a medical contingency fund in a liquid mutual fund or savings account.
This ensures you don’t dip into your retirement corpus for emergencies.

8. Managing Tax Liabilities on Investments

Understanding tax implications can maximise your post-retirement income.

Equity Investments: LTCG above Rs. 1.25 lakh is taxed at 12.5%. STCG is taxed at 20%.
Debt Instruments: Both LTCG and STCG are taxed as per your income slab.
Fixed Deposits: Interest income is fully taxable under your income slab.
A CFP can optimise your withdrawals to minimise tax outflows.

9. Creating an Income Stream for Retirement

A sustainable income stream is essential for meeting monthly expenses.

Systematic Withdrawal Plans (SWPs) from mutual funds provide regular income.
Withdraw dividends or interest from debt instruments systematically.
Avoid withdrawing too much too soon to ensure the corpus lasts longer.
Plan withdrawals in a tax-efficient manner with professional advice.

10. Protecting and Growing Your Retirement Corpus

To sustain a 40-year retirement, your corpus must grow over time.

Invest in equity-oriented funds for inflation-beating returns.
Reallocate funds periodically to maintain an optimal equity-debt balance.
Review your portfolio annually with a Certified Financial Planner.
This disciplined approach ensures steady growth and reduced risks.

11. Avoid Common Mistakes in Retirement Planning

Mistakes can significantly impact the sustainability of your corpus.

Over-Conservatism: Avoid keeping too much in low-return instruments like FDs.
Ignoring Inflation: Failing to account for inflation reduces purchasing power.
Emotional Decisions: Avoid panic-selling during market volatility.
Stick to your financial plan and seek professional guidance.

12. Final Insights

Retiring at 44 is achievable with disciplined planning and professional advice. Ensure you maintain a balance between growth and safety. Regular reviews and adjustments will help sustain your corpus for decades.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 19, 2024

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Dear Rama Sir, I am 42 years and have been doing SIP since last 3 years. My monthly SIPs are as : ICICI Prudential Bluechip Fund : 20 K, DSP Mid CAP: 5K, SBI Small CAP: 12 K, Parag Parikh Flexi: 10 K and HDFC Balanced Advantage: 10 K. Also, I have invested Lumpsum amount of Rs. 50 K in DSP mid CAP, Rs. 15 K in ICICI Ultra Short and Rs. 4 Lacs in SBI Contra. Pl review and suggest improvements if required. I recently got bonus and can invest more in Lumpsum in your suggested funds. Request your guidance Sir.
Ans: Your systematic investment plan (SIP) portfolio shows a structured approach. It reflects a mix of large-cap, mid-cap, small-cap, flexi-cap, and balanced funds. The lump sum investments add diversification. This balanced allocation demonstrates prudence and clarity.

Let us review each aspect of your portfolio and provide tailored suggestions.

Strengths in Your Current Portfolio
Diversified Allocation: Your investments span large, mid, small caps, and flexi-cap categories. This reduces risk.

Consistent SIPs: Monthly SIPs total Rs. 57,000, reflecting commitment. SIPs instill discipline and capture market volatility over time.

Growth Potential: Mid-cap and small-cap funds provide good growth opportunities over the long term.

Lump Sum in Contra Fund: Rs. 4 lakh in a contra strategy adds a contrarian element. This could yield good returns in specific market conditions.

Areas for Improvement
Overlapping Funds: Multiple funds may invest in similar sectors or stocks. This could lead to duplication.

Balanced Allocation Concerns: High allocation to equity-oriented funds increases risk. A more balanced approach can help achieve stability.

Debt Investment Allocation: ICICI Ultra Short-Term Fund at Rs. 15,000 seems under-allocated. Adding more to debt can stabilize your portfolio.

Limited Sectoral Diversification: Current funds focus mainly on broader indices. Exposure to sectoral or thematic funds could enhance growth.

Suggestions for Portfolio Improvement
1. Optimise Equity Allocation
Retain a mix of large, mid, and small-cap funds, but assess overlap.
Avoid holding too many funds with a similar investment strategy. This leads to diluted returns.
Focus on funds with consistent performance and proven track records.
2. Strengthen Debt Investment
Increase allocation to debt funds for stability. Balanced funds are helpful, but dedicated debt funds are crucial for portfolio cushioning.
Consider short-term and corporate bond funds for steady returns.
3. Increase Lump Sum Allocation Wisely
Allocate the bonus amount across diversified funds to align with your goals.
Divide lump sum investments into tranches to leverage market corrections.
4. Assess Contra Fund Exposure
While contra funds offer unique opportunities, Rs. 4 lakh is a significant portion.
Limit exposure to avoid overdependence on contrarian strategies, which work best in certain cycles.
5. Tax Efficiency
Equity fund gains over Rs. 1.25 lakh annually are taxed at 12.5%.
Debt fund gains are taxed per your slab. Factor this into future investments.
Plan withdrawals smartly to reduce tax liabilities.
6. Emergency Fund
Ensure sufficient liquidity for emergencies. Allocate 6-12 months of expenses to liquid or ultra-short-term funds.
7. Avoid Overinvesting in a Single Strategy
Balanced advantage funds are versatile, but reliance on one strategy may restrict returns.
Maintain exposure while investing in other complementary funds.
Suggested Allocation for Your Bonus
Equity Investments

Direct part of your bonus to funds with high potential but less overlap.
Diversify by including funds with sectoral or thematic exposure.
Debt Investments

Allocate a portion to debt funds for stability.
Ultra-short-term funds can help with short-term goals.
Hybrid Funds

Use hybrid funds for a mix of equity and debt without aggressive risk.
Gold Investments

If not already, consider Sovereign Gold Bonds (SGB) for diversification.
Broader Financial Planning Recommendations
Goal-Oriented Investments
Map each investment to a specific goal like retirement, children’s education, or home purchase.
This ensures focus and clarity.
Insurance Coverage Check
Evaluate existing life and health insurance policies. Ensure they are sufficient to cover your family’s needs.
If you hold ULIPs, evaluate their returns. Surrendering may allow reinvestment into mutual funds.
Estate Planning
Ensure your investments are nominated and estate documents updated.
A will can simplify asset distribution and avoid future disputes.
Monitor Regularly
Review your portfolio semi-annually to track performance and make adjustments.
This keeps your investments aligned with changing goals and market conditions.
Benefits of Regular Funds Over Direct Funds
Expert Guidance: Investing through a Certified Financial Planner offers advice on fund selection.
Streamlined Process: Regular funds ensure consistent monitoring and better decision-making.
Human Oversight: Direct funds demand deeper financial knowledge. Advisors simplify choices.
Final Insights
Your portfolio reflects strong discipline and a solid foundation. Optimizing fund selection, balancing equity-debt, and aligning investments with goals can enhance returns.

Allocate your bonus systematically for maximum benefit. Avoid impulsive investments and maintain long-term discipline. This approach will keep you on track for financial independence.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment
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Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

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Hello Sir, My question - Male, Age is 29, Salary of Rs. 22000/- p.m., my expenses 6-8k p.m. (Approx), Current Investments: Mutual Funds 2k monthly, 3k RD monthly for 3 Yrs, what is suitable Health/Life/Term Insurance? ROI option for same? or Other Investment options? I have my father who got his pension & he manages our household Expenses.
Ans: You are 29 years old, with a stable monthly salary of Rs 22,000 and low monthly expenses of Rs 6,000–8,000. Your father’s pension covers household needs, giving you flexibility for investments. Current savings of Rs 5,000 per month (Rs 2,000 in mutual funds and Rs 3,000 in a recurring deposit) is a good start.

Priorities and Recommendations
1. Health Insurance
Health insurance is crucial to safeguard against medical emergencies.

Coverage for Self: Opt for an individual health insurance policy with a sum insured of Rs 5–10 lakh. Look for plans offering cashless treatment, comprehensive coverage, and no claim bonus.

Coverage for Family: If you wish to extend coverage for your parents, consider a family floater plan with Rs 10–15 lakh coverage. However, check premiums and benefits before including senior members.

2. Life Insurance
Term Insurance: A term plan is the most cost-effective option. Choose coverage of Rs 50 lakh to Rs 1 crore to secure your family financially. Premiums for a non-smoker male at your age are low (approximately Rs 5,000–7,000 annually for Rs 1 crore coverage).

Avoid investment-linked insurance policies such as ULIPs or endowment plans, as they offer low returns and inadequate insurance coverage.

3. Building an Emergency Fund
Save at least 6–9 months of expenses in a highly liquid instrument like a savings account, short-term fixed deposit, or liquid mutual fund.
Given your expenses of Rs 6,000–8,000, aim for Rs 50,000–70,000 as an emergency fund.
4. Investment Strategy for Growth
You have significant surplus income after meeting expenses. Allocate it to high-growth investment instruments:

Increase Mutual Fund SIPs:

Increase SIPs to Rs 5,000–6,000 monthly.
Diversify across flexi-cap, mid-cap, and small-cap funds for long-term growth. Suggested categories include:
Flexi-Cap Fund: For diversification.
Mid-Cap Fund: For higher returns over a long horizon.
Small-Cap Fund: Allocate a smaller percentage (10–15%) for aggressive growth.
Recurring Deposit (RD):

RD is low-yield and taxed. Consider redirecting RD savings into mutual funds or a Public Provident Fund (PPF) for better long-term returns and tax benefits.
Public Provident Fund (PPF):

Invest in PPF for a secure, tax-free return (current rate: 7.1%). It’s an excellent long-term savings tool, especially for retirement.
5. Tax Planning
Leverage Section 80C: Maximise Rs 1.5 lakh yearly investment in tax-saving instruments like PPF, ELSS mutual funds, or 5-year tax-saving fixed deposits.

Opt for a health insurance policy to claim benefits under Section 80D (up to Rs 25,000 for self and Rs 50,000 for senior parents).

Suggested Allocation of Rs 10,000 Monthly Surplus
Mutual Funds: Rs 5,000
PPF: Rs 2,500
Emergency Fund: Rs 2,000 (till the fund reaches Rs 50,000–70,000, then redirect to other investments)
Health Insurance Premium: Rs 500–1,000
Final Insights
Prioritise health and term insurance immediately.
Focus on mutual funds and PPF for long-term wealth creation.
Avoid low-ROI options like recurring deposits once current tenure ends.
By maintaining discipline and increasing investment amounts annually, you can achieve financial independence while ensuring your family is protected.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 18, 2024Hindi
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Hi Gurus , Finally last month I have started my investment in MF thru sip in following funds: 1. Parag Parikh Flexi Fund Rs 5000. 2. Motilal Oswal Mid Cap Fund - Rs 10000. 3. Nippon India Muti cap fund- Rs 5000. 4. Nippon India Small Cap Fund- Rs 10000 5. Quant small cap fund -Rs 5000. Further I can spend 10000 more thru sip and suggest good funds for that. Also please note that the above investment is in regular thru ICICI and for retirement purpose. My current age is 45 years. Please suggest about my portfolio and asset allocations.
Ans: Your portfolio demonstrates diversification across flexi-cap, mid-cap, multi-cap, and small-cap categories, which is a good starting point for long-term growth. However, there are areas for improvement to enhance risk management and alignment with your retirement goals:

Observations
Overexposure to Small-Cap Funds:

30% of your SIPs are allocated to small-cap funds (Rs 15,000 out of Rs 50,000).
Small-cap funds are volatile and risky, especially for someone closer to retirement. Reducing this exposure is advisable.
Balanced Allocation Missing:

There’s no allocation to hybrid or large-cap funds, which offer stability.
For a retirement-focused portfolio, balancing risk and stability is essential.
Fund Overlap Risk:

Nippon India Multi Cap Fund and Nippon India Small Cap Fund could have overlapping holdings, which might reduce overall diversification.
Good Use of Regular Plans:

Regular plans ensure you receive ongoing guidance from your Mutual Fund Distributor (MFD) or Certified Financial Planner (CFP). This is beneficial for monitoring and rebalancing.
Suggested Asset Allocation
Given your retirement horizon and age (45 years), a balanced approach between equity and debt is prudent. Consider the following allocation:

Equity Funds (70%): Growth-oriented funds, primarily large-cap, flexi-cap, and mid-cap funds, with reduced small-cap exposure.
Debt Funds (30%): Stability-focused funds, such as short-duration or dynamic bond funds, to reduce portfolio volatility.
Suggested Portfolio Changes
Reduce Small-Cap Exposure:

Maintain one small-cap fund, such as Nippon India Small Cap Fund (Rs 10,000 SIP). Exit Quant Small Cap Fund to reduce overlap and risk.
Introduce a Large-Cap Fund:

Add Rs 5,000 to a large-cap fund like SBI Bluechip Fund or ICICI Prudential Bluechip Fund for stability.
Add a Hybrid Fund for Stability:

Use the additional Rs 10,000 to invest in a hybrid fund like HDFC Balanced Advantage Fund or ICICI Prudential Balanced Advantage Fund. These funds offer a mix of equity and debt for lower volatility.
Monitor Multi-Cap Fund Performance:

Keep an eye on Nippon India Multi Cap Fund. If underperformance persists, consider switching to a better-performing multi-cap fund, such as Kotak Multi Cap Fund.

Recommended SIP Allocation (Post Changes)
Flexi-Cap Fund: Continue investing Rs 5,000 in Parag Parikh Flexi Cap Fund for diversified growth across market caps.

Mid-Cap Fund: Maintain Rs 10,000 SIP in Motilal Oswal Mid Cap Fund to capture mid-cap growth potential.

Multi-Cap Fund: Retain Rs 5,000 in Nippon India Multi Cap Fund but monitor its performance. Consider switching if it underperforms consistently.

Small-Cap Fund: Keep Rs 10,000 SIP in Nippon India Small Cap Fund and exit Quant Small Cap Fund to reduce overlap and risk.

Large-Cap Fund: Add Rs 5,000 in a stable large-cap fund such as SBI Bluechip Fund or ICICI Prudential Bluechip Fund for consistent returns with lower volatility.

Hybrid Fund: Allocate Rs 10,000 to a balanced advantage fund such as HDFC Balanced Advantage Fund or ICICI Prudential Balanced Advantage Fund for a mix of equity and debt stability.

General Suggestions
Review Portfolio Annually:
Regularly assess fund performance and rebalance to ensure alignment with your retirement goals.

Shift to Debt Gradually:
Start increasing debt exposure around age 50 to reduce portfolio volatility closer to retirement.

Emergency Fund and Insurance:
Maintain an emergency fund covering 6–12 months of expenses and ensure adequate health and term insurance coverage.

Professional Advice:
Continue investing through a reliable MFD or CFP to adapt your portfolio as per changing market conditions and personal goals.

Final Insights
Your portfolio is promising but needs adjustments to balance growth and risk. Reducing small-cap exposure and introducing large-cap and hybrid funds will add stability and align your investments with your retirement vision.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 18, 2024Hindi
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Hi, I am 32 now. My in hand salary is 1.30 lakh/month (post deduction of taxes, mediclaim and PF). I have around 15 lakh in PF (combining PPF and VPF). Around 6 lakh in FD. Now, per month I invest 47k in PFs, 20k in FD, 12.5 in Sukanya samriddhi yoyona, 10k in MF. I do not have any outstanding debt, have residential building. If I plan to increase my investment @5% per year, will I be able to create a retirement fund of 20 crore? And will it be sufficient to support me for 30 years podt retirement? (My current livelihood expense per month is around 25k)
Ans: You aim to accumulate Rs 20 crore by retirement (assuming age 60) and sustain a 30-year post-retirement period. Your current financial health is excellent, with no debts, a stable income, and disciplined savings. However, to assess whether your goals are achievable and the sufficiency of Rs 20 crore, let’s examine the following:

Key Assumptions
Time to Retirement: 28 years (till age 60).
Post-Retirement Period: 30 years.
Inflation Rate: 6% per annum (to estimate future expenses).
Investment Returns:
Equity Mutual Funds: 12% annually (post-tax).
Debt Instruments: 6% annually (post-tax).

Step 1: Estimate Future Expenses
Your current monthly expense is Rs 25,000. Considering 6% inflation, the monthly expense will grow significantly by retirement:

At age 60: Rs 1.42 lakh/month (approx).
Annual expense at 60: Rs 17.1 lakh/year.
For a 30-year post-retirement period, Rs 20 crore may suffice with proper withdrawals and portfolio management.

Step 2: Review Current Investments
1. Provident Funds (PF):
Existing corpus: Rs 15 lakh (combining PPF and VPF).
Monthly contribution: Rs 47,000.
Growth potential: Assumed at 7% CAGR.
2. Fixed Deposits (FD):
Current amount: Rs 6 lakh.
Monthly contribution: Rs 20,000.
Growth potential: Assumed at 6% CAGR.
3. Sukanya Samriddhi Yojana (SSY):
Monthly investment: Rs 12,500.
Lock-in: Till daughters turn 18 or 21.
Growth potential: Assumed at 7.6% (current rate).
4. Mutual Funds (MF):
Monthly SIP: Rs 10,000.
Growth potential: Assumed at 12% CAGR.
Step 3: Can You Reach Rs 20 Crore?
With a 5% annual increase in investments, let’s estimate your retirement corpus:

Contributions by Age 60 (Approximate):
Provident Funds (PPF/VPF): Rs 3.2 crore.
Fixed Deposits: Rs 1.2 crore.
Sukanya Samriddhi Yojana: Rs 1.5 crore (depending on daughters' ages).
Mutual Funds: Rs 7.5 crore.
Total Corpus: Rs 13.4 crore (approx).
Gap: Your goal of Rs 20 crore requires an additional Rs 6.6 crore.

Step 4: Bridge the Gap
To achieve Rs 20 crore, consider these adjustments:

1. Increase Equity Exposure:
Currently, equity (MF) comprises a small portion. Shift some fixed-income investments (FDs) to equity funds for higher growth.
2. Review FD Allocations:
FD returns are low after taxes. Redirect a portion of your Rs 20,000 monthly FD allocation to equity funds.
3. Enhance SIPs:
Increase your mutual fund SIPs from Rs 10,000 to Rs 25,000. Even small increases over time can significantly boost your corpus.
4. Annual Step-Up Investments:
Continue increasing investments by 5% or more annually. Regularly review your portfolio to maintain the right equity-debt balance.
Step 5: Post-Retirement Planning
Withdrawal Rate: A safe withdrawal rate is around 3-4% annually. With Rs 20 crore, you can withdraw Rs 80 lakh/year, which accounts for inflation-adjusted expenses.
Portfolio Allocation: Shift 60-70% of your portfolio to debt instruments closer to retirement to reduce risk.

Final Insights
Rs 20 crore is achievable with a higher focus on equity investments and disciplined saving.
Increasing your SIPs and reallocating funds from FDs to mutual funds can bridge the shortfall.
Rs 20 crore should sufficiently support a 30-year post-retirement period, considering inflation.
Consult a Certified Financial Planner (CFP) to monitor and optimise your strategy for consistent progress.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

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Hi, I am having Outstanding Home loan amount for my first purchased flat as 9 Lacs.(EMI 21500) Recently I constructed bungalow by taking Home loan for land and constructions as 25 Lacs and 45 Lacs respectively (EMI 23000 and 32000). Thus my current outstanding for both the properties is 79 Lacs. I rented my first flat and living in new constructed bungalow. The rent amount is equal to flat EMI. Is it advisable to sell the flat (Selling price 50 Lacs) to clear the debt and continue the Outstanding loan of 29 Lacs (79Lacs - 50 Lacs) ? Or continue the existing loans and clear the debt early by prepayment's?
Ans: Your current debt of Rs 79 lakh is significant. Selling your first flat could reduce your loan burden by Rs 50 lakh, leaving Rs 29 lakh outstanding. However, decisions should align with long-term goals, affordability, and potential returns.

Here’s a breakdown to help you decide:

Option 1: Sell the Flat and Reduce Debt
Advantages:
Lower Debt Burden: Reduces loans to Rs 29 lakh, significantly decreasing EMI obligations.
Better Cash Flow: Frees up monthly cash for other financial goals or investments.
Reduced Interest Cost: Paying off Rs 50 lakh immediately lowers overall interest payments, saving a substantial amount.
Disadvantages:
Loss of Asset Growth Potential: Real estate prices may appreciate over the years. Selling might mean losing future capital appreciation.
No Rental Income: Selling eliminates the passive income that currently covers your flat’s EMI.
Option 2: Retain Both Properties and Focus on Prepayments
Advantages:
Asset Appreciation: You retain ownership of both properties, benefiting from potential price appreciation over time.
Rental Income: Ongoing rental income can contribute to paying off the flat’s EMI, keeping cash flow stable.
Disadvantages:
High Debt Pressure: Managing a Rs 79 lakh loan requires disciplined budgeting and significant prepayments to reduce interest costs.
Interest Accumulation: Continuing with high debt over the long term increases total interest paid.
Recommended Approach
Selling the Flat May Be Better If:
You prioritise reducing stress from high debt.
You don’t foresee substantial appreciation in the flat’s value.
Clearing a large portion of your debt aligns with your financial comfort.
Retaining the Flat May Be Better If:
You can afford current EMIs and have surplus funds for regular prepayments.
The flat is in a location with strong appreciation potential.
Passive rental income is a key component of your financial plan.
Practical Advice
Evaluate Loan Interest Rates: Check the interest rates for both loans. Prioritise prepaying the one with the highest rate.
Review Budget: Assess whether prepayments are feasible without compromising financial security.
Consider Property Market Trends: Evaluate the appreciation potential of your flat before deciding to sell.
Seek Professional Guidance: A Certified Financial Planner can assess your risk tolerance, long-term goals, and cash flow needs to offer tailored advice.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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Milind Vadjikar  |665 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 18, 2024Hindi
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I am 64 years old and previously worked at Observar India Ltd. for over 15 years. However, the organization shut down many years ago, and I do not have the UAN (Universal Account Number) or PF (Provident Fund) number associated with my employment during that period. After my tenure at Observar India Ltd., I began working with Viacom18, where I am currently employed, and I have all the necessary details of my present PF account. I would like to know the process for retrieving or transferring the PF funds accumulated during my time at Observar India Ltd. to my current PF account. Considering that the company no longer exists and I lack the old PF details, what steps can I take to initiate the process? Additionally, what documents or records will be required to locate and claim the funds from my previous employment? Any guidance on dealing with such situations where the employer is no longer operational would be greatly appreciated.
Ans: Hello;

If you don't remember your EPF account number and your employer is closed, you can try these options:

1. Check your salary slip: Employers usually include the PF account number on the employee's salary slip.

2. Visit the EPFO office: You can visit the EPFO office with your identity proof and application form to get your PF number.

3.Call the EPFO helpline: You can call the EPFO helpline for information and to track past accounts.

4.Go to the EPFO website: You can fill out some basic information on the EPFO website to locate your dormant account.

Once you get the pf account number you may proceed for offline or online withdrawal of the same.

Best wishes;
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Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 18, 2024Hindi
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Please suggest if following investment are good as SIP started last year sep 2023 HDFC Flexi cap 5000, Parag Parikh 5000,SBI L & Mid cap 2500/-, Axis Blue chip fund 2500, AXis Mid cap fund 2500/- HDFC mid-cap opportunities fund 5000, Kotal emerging fund 2500/- Nippon India smal cap fund 5000/- HDFC Pharma & healthcare fund 4000/- Nippon India multicap fund 2500/- HSBC value fund 3000/- Investment are on monthly basis. Pease advise
Ans: Your portfolio demonstrates a proactive approach to wealth building. It includes diverse mutual funds across categories. Monthly SIPs indicate your long-term financial discipline. This is commendable. However, let’s evaluate its alignment with your financial goals.

Below are detailed insights for your portfolio assessment:

Strengths of Your Portfolio
Diversification

You’ve invested in funds from multiple categories. This includes large-cap, mid-cap, small-cap, flexi-cap, and sectoral funds.
A diversified portfolio reduces overall risk. It balances growth potential across market segments.
Consistency

Monthly SIPs ensure disciplined investments. This helps capture market volatility effectively.
Long-term SIPs can create substantial wealth through compounding.
Exposure to Growth Opportunities

Investments in mid-cap and small-cap funds offer higher growth potential. These funds are suitable for long-term wealth creation.
Sectoral funds provide concentrated exposure to booming sectors like healthcare.
Inclusion of Value and Multicap Funds

Value funds identify undervalued stocks. This can deliver long-term growth.
Multicap funds offer flexibility to invest across market capitalizations.
Areas for Improvement
Overlapping Fund Categories

Having multiple funds in the same category might lead to redundancy. For example, multiple mid-cap and flexi-cap funds.
Similar funds can increase portfolio overlap. This reduces the benefit of diversification.
Sectoral Fund Allocation

Sectoral funds like healthcare have high risk. These funds depend on sector-specific performance.
Such funds should have limited allocation in a balanced portfolio.
Number of Funds

A portfolio with too many funds can be hard to track. It dilutes returns without adding significant diversification.
Fewer funds with distinct strategies are easier to manage and monitor.
Portfolio Insights
Risk Assessment

Your portfolio leans towards high-risk categories like mid-cap and small-cap.
Consider balancing it with funds having stable growth, such as large-cap or flexi-cap.
Goal-Based Allocation

Align investments with specific financial goals. For example, retirement, child’s education, or buying a house.
Define timelines for each goal. Adjust fund categories based on risk tolerance and time horizon.
Taxation Awareness

Equity fund gains above Rs 1.25 lakh are taxed at 12.5%. Short-term gains attract 20% tax.
Ensure to account for these taxes in your investment strategy.
Regular Fund Investment Benefits

Investing through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) offers advantages.

They provide expert insights, fund tracking, and timely rebalancing.

Direct fund investments might lack professional guidance. This could lead to suboptimal decision-making during market volatility.

Suggested Course of Action
Streamline the Portfolio

Reduce the number of overlapping funds. Keep one or two funds per category.
Focus on high-quality funds with a proven track record.
Adjust Sectoral Fund Exposure

Limit sectoral fund exposure to a small percentage of your total investment.
Use these funds only for specific, high-risk goals.
Rebalance Annually

Review your portfolio at least once a year. Rebalance it to maintain desired asset allocation.
Shift funds if they no longer align with your goals or risk tolerance.
Emergency Fund Allocation

Maintain a liquid fund or emergency fund equivalent to 6-12 months of expenses.
This avoids withdrawing SIPs during unexpected financial needs.
Monitor Fund Performance

Regularly review the performance of each fund against its benchmark.
Replace consistently underperforming funds with better alternatives.
Long-Term Discipline

Stick to your SIPs, especially during market downturns. This helps average out costs.
Avoid making decisions based on short-term market fluctuations.
Final Insights
Your portfolio reflects a strong commitment to financial growth. However, streamlining your investments can enhance efficiency and returns. Focusing on goal-based allocation ensures better alignment with your financial objectives.

Consider professional guidance to refine your portfolio and stay on track. This ensures your investments work harder for your future.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

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Hi sir just to get 1 lakhs per month from mutual fund account, how much total money is required to invest in mutual funds account. Thanks
Ans: To generate a monthly income of Rs 1,00,000 through mutual funds, you need to determine the total investment amount based on the withdrawal rate and expected returns. Here's a detailed analysis:

Key Considerations
Withdrawal Rate

A safe withdrawal rate is around 4–6% annually for sustainable income.
A higher withdrawal rate risks depleting your corpus prematurely.
Investment Returns

Equity mutual funds can give 10–12% annual returns over the long term.
Balanced or hybrid funds may offer 8–10% returns with lower volatility.
Debt mutual funds typically yield 6–8% returns with stable income.
Inflation

Factor in inflation to ensure the corpus lasts through your lifetime.
Taxation

Gains from mutual funds are taxable. This affects your effective returns.
Approximate Corpus Needed
1. Using a 6% Withdrawal Rate
Monthly income required: Rs 1,00,000
Annual income required: Rs 12,00,000
Corpus needed: Rs 12,00,000 ÷ 6% = Rs 2 Crores
2. Using a 4% Withdrawal Rate
Monthly income required: Rs 1,00,000
Annual income required: Rs 12,00,000
Corpus needed: Rs 12,00,000 ÷ 4% = Rs 3 Crores
Recommendations
Invest in Diversified Funds

Allocate your corpus across equity, hybrid, and debt funds.
Equity for growth, debt for stability, and hybrid for balance.
Use SWP (Systematic Withdrawal Plan)

SWP allows you to withdraw a fixed amount monthly.
It ensures steady cash flow without disturbing the investment.
Reassess Periodically

Review returns, inflation, and withdrawal rate annually.
Adjust withdrawal amount to maintain corpus longevity.
Plan for Taxes

Consider the impact of LTCG and STCG taxes on withdrawals.
Equity mutual funds' LTCG above Rs 1.25 lakh is taxed at 12.5%.
Include an Emergency Corpus

Keep 6–12 months’ expenses in a liquid fund.
Avoid dipping into your main corpus for emergencies.
Final Insights
To get Rs 1,00,000 monthly, aim for a corpus of Rs 2–3 crores. Choose mutual funds that align with your risk tolerance and income needs. Start with a Certified Financial Planner to tailor a portfolio for sustainable income.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 12, 2024Hindi
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PLease help me with my financial planning, by when i can retire with this portfolio, i have current expenses of 70k per month. Category Asset Percentage (%) Value (?) Retirement Funds EPF (includes Gratuity and US 401) 33.45% 55,53,000 NPS 13.31% 23,96,000 PPF 7.53% 12,70,000 Bond 7.23% 12,00,000 Total Retirement 61.53% 1,20,19,000 Daughter's Education Fixed Deposit (FD) 4.82% 2,76,000 Mutual Funds 15.36% 31,00,000 Stocks 5.78% 13,47,000 Cash (includes Miscellaneous) 1.95% 3,00,000 Liquid 0.00% 50,000 Total Education 30.12% 50,73,000 Miscellaneous Gold (includes TI) 8.19% 15,08,000 Loan & Family Money Loans + Family Money 0.00% 15,83,333 Grand Total 97.63% 1,85,83,333
Ans: You have outlined a robust financial portfolio with well-diversified assets.

Retirement Funds form a major part of your investments, accounting for 61.53% of your total portfolio. These include EPF, NPS, PPF, and bonds.

Daughter's Education Funds make up 30.12%, including fixed deposits, mutual funds, stocks, and cash reserves.

Miscellaneous Investments like gold and loans/family money account for 8.19%.

Your total portfolio value stands at Rs 1.85 crore. This is a strong base for retirement planning.

Retirement Goal Assessment
You aim to retire with Rs 70,000 monthly expenses. This is Rs 8.4 lakh annually.

Considering inflation, your expenses will increase yearly. Accounting for this is critical.

Your current portfolio may fall short of sustaining retirement if inflation and longevity are not factored in.

Analysing Retirement Investments
1. EPF and NPS Contributions

EPF and NPS together contribute Rs 79.49 lakh.

These are excellent for retirement. EPF ensures stable returns, and NPS offers potential growth.

2. PPF and Bonds

PPF and bonds provide safety and consistent returns.

However, their growth may lag behind inflation.

3. Daughter's Education Funds

Your mutual funds and stocks for education are excellent growth-focused choices.

Fixed deposits provide stability but may not beat inflation.

Retirement Strategy Recommendations
1. Gradual Portfolio Rebalancing

Gradually reduce exposure to high-risk equity investments two years before retirement.

Shift a portion into debt mutual funds or other low-risk instruments.

This protects your corpus from market fluctuations.

2. Consolidate Retirement Corpus

Consider earmarking a portion of mutual funds for retirement instead of education.

This avoids the need to liquidate long-term investments prematurely.

3. Optimise NPS Allocation

Maximise equity exposure within NPS for better long-term returns.

Equity in NPS can provide growth even post-retirement.

4. Build a Liquid Fund

Set aside six months’ expenses in a liquid fund or high-interest savings account.

This ensures easy access during emergencies.

Education Fund Recommendations
1. Prioritise Growth-Oriented Investments

Mutual funds and equity investments can outpace education inflation.

Continue SIPs in well-diversified funds with a mid-to-high risk profile.

2. Review Fixed Deposits

Fixed deposits offer safety but lower returns.

Consider reallocating a portion into balanced mutual funds for better growth.

Tax Efficiency Considerations
1. Mutual Fund Taxation

LTCG above Rs 1.25 lakh is taxed at 12.5%. Plan redemptions carefully to minimise tax.

STCG is taxed at 20%. Avoid frequent withdrawals to reduce this burden.

2. Fixed Deposit Taxation

FD interest is taxed as per your income slab.

This reduces effective returns compared to tax-efficient mutual funds.

Lifestyle Adjustments for Retirement
1. Assess Post-Retirement Needs

Recalculate expenses to include healthcare and travel costs.

Account for inflation when estimating monthly retirement needs.

2. Healthcare Planning

Secure adequate health insurance for yourself and your family.

This prevents medical emergencies from draining your retirement corpus.

3. Maintain a Contingency Fund

Keep a contingency fund for unforeseen expenses.

This should not be part of your primary retirement corpus.

Professional Guidance and Monitoring
Work with a Certified Financial Planner (CFP) to evaluate your portfolio regularly.

Adjust your asset allocation annually based on market conditions and your changing goals.

Final Insights
Your disciplined approach has created a solid foundation for financial security. However, your portfolio requires optimisation to meet both retirement and education goals. Focus on balancing growth and stability. Align investments with specific goals to minimise future shortfalls. Maintain regular reviews and adjustments to stay on track for a comfortable retirement.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 10, 2024Hindi
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Dear Sir, I am 49 years Old. Have a current outstanding home loan of Rs 2700000 . The loan is equally divided between me and my wife. This loan was taken in 2022 for fifteen years of Rs 45,00,000. I have increased my EMI and the repayment is done accordingly.. I am into a Partnership business with monthly income of Rs 250000. I have monthly SIP of 40K with total value of Rs 2700000 lacs . I around 13 lacs in Saving account and FDs put together. I was planning to close one of the loan of Rs 1350000. Is it advisable to close the Home loan ? Pl suggest.
Ans: Your financial profile is impressive, with a strong income and disciplined investments. However, home loan closure requires thoughtful assessment. Let's evaluate your situation from all angles.

Current Financial Standing
Income and Loan Details

Monthly income: Rs 2,50,000
Outstanding loan: Rs 27,00,000 (divided equally with your wife)
Loan tenure: 15 years, started in 2022
Investments and Savings

Monthly SIPs: Rs 40,000
SIP value: Rs 27,00,000
Savings and FDs: Rs 13,00,000
You have maintained a disciplined investment approach and a healthy liquidity buffer.

Benefits of Closing One Loan
Reduced Financial Liability

Paying off Rs 13,50,000 reduces loan EMI burden.
Frees up monthly cash flow for other goals.
Interest Savings

Prepayment saves on the interest payable over the tenure.
Longer tenure loans attract higher interest due to compounding.
Psychological Relief

Eliminating one liability reduces financial stress.
Simplifies loan management for your household.
Reasons to Consider Retaining the Loan
Tax Benefits

Home loan offers tax deductions on interest and principal repayment.
These benefits can reduce your tax liability.
Opportunity Cost

Using Rs 13,50,000 for repayment might affect potential investment growth.
Well-invested funds can earn returns higher than the loan interest rate.
Liquidity Concerns

Retaining Rs 13,00,000 ensures funds for emergencies or opportunities.
Avoid locking all liquidity in debt repayment.
Recommendations
1. Partial Loan Prepayment
Use Rs 6,50,000 for partial prepayment.
Retain Rs 6,50,000 as emergency funds.
2. Continue SIP Investments
Your SIPs provide wealth growth over the long term.
Ensure these investments align with your financial goals.
3. Assess Loan Tax Benefits
Evaluate your annual tax savings from the home loan.
Maintain the loan if the benefits outweigh interest costs.
4. Revisit Your Financial Goals
Align loan repayment and investments with long-term plans.
Include retirement planning and children's future expenses.
5. Monitor Emergency Fund Requirements
Ensure 6–12 months of expenses are readily available.
This helps handle unforeseen circumstances without liquidating investments.
Impact of Prepayment on Investments
SIPs are crucial for wealth creation.

Avoid diverting SIP funds for loan repayment.

Use liquid funds like savings or FDs for prepayment instead.

Mutual funds can provide better long-term returns than the interest rate saved by prepaying the loan.

Tax Implications
Consider how prepayment affects your tax savings.
Losing tax benefits may increase your net tax liability.
Final Insights
Your disciplined approach to finance is noteworthy. Closing a part of the loan is a balanced strategy. Retain some liquidity and continue your investments.

Keep reviewing your financial goals to adapt your strategies. Periodic reviews with a Certified Financial Planner can help optimise decisions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 10, 2024Hindi
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I'm 46 years old working woman. My SIP portfolio is currently 1.20 crores and I invest 29k every month through SIPs. I am a very disciplined investor and have only withdrawn money from my portfolio for my son's college education. However, given the recent market volatility, I was wondering if I should withdraw a significant portion from my portfolio and start FDs which will yield less profits but are relatively safe. My savings and investment are going to be my retirement fund as I won't have any post retirement earnings / benefits from my job. I am expecting to continue working for another 2 years after which I will retire. I live in my own house which I co-own with my husband. I have no debt.
Ans: You have built a strong SIP portfolio worth Rs 1.20 crores. Your discipline in investing is impressive. This approach ensures long-term growth and financial security.

You invest Rs 29,000 monthly, which aligns with your future retirement needs.

Living in a debt-free, owned house adds stability to your financial situation.

Since you plan to retire in two years, preserving your retirement corpus is critical.

Concerns About Market Volatility
Market fluctuations can be unsettling, especially near retirement. However, long-term SIP investments often outgrow volatility.

Withdrawing your portfolio now may lock in losses during a downtrend.

Redeploying funds into FDs may not match your retirement income needs due to low returns.

Equity investments are key to beating inflation, ensuring your money retains its purchasing power over time.

Alternatives to Withdrawing Your Investments
1. Gradually Reduce Equity Exposure

Start reallocating a portion of your portfolio from equity to debt mutual funds.

Debt mutual funds offer lower risk and steady returns compared to equities.

This approach reduces market-related risks while maintaining better returns than FDs.

2. Maintain a Balanced Portfolio

Retain a mix of equity and debt funds in your portfolio.

Equity provides growth, while debt offers stability. A 60:40 equity-to-debt ratio may suit your situation.

Consult a Certified Financial Planner (CFP) to fine-tune the allocation based on your retirement goals.

3. Build an Emergency Fund

Set aside six months’ expenses in a liquid fund or bank savings account.

This ensures easy access to funds without disturbing your investments.

4. Systematic Withdrawal Plan (SWP)

After retiring, consider setting up an SWP in your mutual funds.

This provides regular income while keeping the bulk of your corpus invested.

SWP allows better tax efficiency than FD interest.

Drawbacks of Moving to Fixed Deposits
1. Low Returns

FD returns may not beat inflation over the long term.

This can erode the purchasing power of your retirement corpus.

2. Tax Inefficiency

FD interest is taxed as per your income slab, reducing effective returns.

Mutual funds, especially debt funds, offer better tax efficiency.

Advantages of Staying Invested in Mutual Funds
1. Compounding Benefits

Long-term mutual fund investments benefit from compounding, enhancing growth.
2. Diversification

Your SIPs already spread risk across asset classes and sectors.

Diversification mitigates the impact of volatility.

3. Flexibility

You can adjust your portfolio allocation without completely withdrawing.
Recommended Steps Before Retirement
1. Define Your Retirement Corpus Requirement

Estimate post-retirement expenses, considering inflation and healthcare costs.

Ensure your portfolio aligns with these needs.

2. Secure Adequate Health Insurance

Ensure you and your family have sufficient health insurance coverage.

This prevents medical emergencies from draining your retirement funds.

3. Gradual Rebalancing

Move a part of your equity investments into safer options like debt funds over the next two years.

This reduces exposure to market risks as retirement nears.

4. Avoid Panic Decisions

Market volatility is normal and often short-lived.

Avoid making emotional decisions that may harm your financial goals.

5. Seek Professional Guidance

Work with a Certified Financial Planner to review and optimise your retirement strategy.

A CFP will help you align your investments with your long-term goals.

Final Insights
Switching entirely to FDs may seem safe, but it can jeopardise your retirement goals. Instead, focus on rebalancing your portfolio to align with your changing risk profile. A combination of equity, debt, and liquid funds can ensure both growth and safety. Continue your disciplined approach, and your investments will provide the stability and income needed for a comfortable retirement.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 09, 2024Hindi
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My age is 30 and I'm a government official earning around 65k in hand salary. I want financial freedom in coming 3 years. I have a few investments in secure bonds around 10lac and a few equity hondings around only 2.5 lacs because started late investment. My yearly expenses are around 2 lacs. Having no loan or outstanding. No insurance policy i do have except government employees insurance policy. What should i do to achieve financial freedom. Would it be possible to get financial freedom in 3 - 5 years?
Ans: Your financial discipline is impressive.

You have no outstanding loans. This is a big advantage.

Savings in secure bonds worth Rs 10 lakhs is noteworthy.

Equity investments worth Rs 2.5 lakhs show a good start, despite being late.

Annual expenses of Rs 2 lakhs mean your savings potential is excellent.

A government salary of Rs 65,000 in hand ensures stable cash flow.

However, you lack adequate insurance, which needs addressing. Let’s create a clear plan for financial freedom within 3–5 years.

Define Financial Freedom
Financial freedom doesn’t always mean quitting work.

It means covering your expenses with passive income.

You need Rs 2 lakhs annually, adjusted for inflation.

Assuming 6% inflation, this may rise to Rs 2.4–2.6 lakhs in three years.

You’ll need investments generating Rs 25,000 monthly.

Step-by-Step Financial Freedom Plan
1. Enhance Insurance Coverage
Government employee insurance covers basic needs. However, it’s not sufficient.

Get a term insurance plan for Rs 1 crore to secure your family.

Invest in a health insurance plan for Rs 10–15 lakhs.

This ensures protection against medical or financial emergencies.

2. Build a Robust Emergency Fund
Keep six months’ expenses in a high-liquidity investment.

Rs 1–1.5 lakhs in a savings account or liquid fund is ideal.

This will safeguard you against unexpected expenses.

3. Reassess Secure Bonds
Secure bonds are safe but may deliver lower returns.

Consider moving Rs 4–5 lakhs to a balanced portfolio of equity and debt funds.

Equity exposure will help combat inflation and grow wealth faster.

Retain Rs 5–6 lakhs in bonds for stability.

4. Expand Equity Investments
Your current equity allocation is low at Rs 2.5 lakhs.

Increase monthly investments in actively managed mutual funds.

Invest Rs 25,000–30,000 per month in funds with a good track record.

Diversify across large-cap, mid-cap, and small-cap categories.

Actively managed funds outperform index funds in volatile markets.

A mutual fund distributor with a CFP credential can help optimise investments.

5. Focus on Asset Allocation
Allocate 60% to equity, 30% to debt, and 10% to gold.

Equity builds wealth, debt ensures safety, and gold hedges against inflation.

Review this allocation annually and rebalance as needed.

6. Generate Passive Income
Invest in dividend-paying mutual funds for passive income.

Use systematic withdrawal plans (SWPs) after three years to generate cash flow.

Ensure withdrawals don’t erode your principal investment.

Over time, increase equity investments to grow this passive income.

7. Leverage Tax Efficiency
Use tax-saving investment options under Section 80C like ELSS mutual funds.

Opt for tax-efficient funds to minimise capital gains taxes.

Long-term capital gains above Rs 1.25 lakh are taxed at 12.5%.

For short-term gains, the rate is 20%. Keep these rules in mind.

8. Avoid Insurance-cum-Investment Policies
These plans offer lower returns and high lock-in periods.

Pure term insurance with mutual funds is more efficient.

9. Automate and Increase Savings
Automate your investments through SIPs for discipline.

Increase SIP amounts every year as your income grows.

10. Regular Financial Reviews
Review your financial plan every six months.

Adjust investments based on performance and market conditions.

Insights on Time Horizon and Feasibility
Achieving financial freedom in 3 years requires aggressive savings and investments.

A 5-year horizon is more realistic and achievable.

Starting late doesn’t mean financial freedom is impossible.

Key Benefits of This Plan
Protection against financial risks through insurance and emergency funds.

Faster wealth growth through equity investments.

Steady passive income to cover expenses.

Avoidable Mistakes
Avoid direct mutual funds; they lack professional advice.

Index funds may not suit your aggressive growth needs.

Don't delay insurance purchase; it’s crucial for risk management.

Finally
Financial freedom is achievable with a clear and disciplined approach.

Focus on increasing investments, ensuring protection, and generating passive income.

Keep reviewing your progress regularly.

Wishing you success in achieving your financial goals!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

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Sir Is it advisable to invest in Silver mutual fund as iam already investing by SIP in Sundaram multi asset allocation fund regular at the rate of 2000 p.m.
Ans: Silver mutual funds primarily invest in silver or silver-related assets. These funds aim to track the performance of silver in the market. They are volatile due to price fluctuations in the precious metals market. While they can diversify your portfolio, they come with risks.

Assessing Your Current Investment
You are already investing in Sundaram Multi Asset Allocation Fund through SIP. This fund diversifies across equity, debt, and other asset classes, potentially including gold and silver.

Benefit: It provides exposure to multiple asset classes, balancing risk and reward.
Drawback: Adding a silver mutual fund may duplicate your exposure to silver indirectly through this fund.
Points to Consider Before Investing in Silver Mutual Funds
1. Understand the Risk

Silver prices are influenced by industrial demand and global trends. This makes it highly volatile.
Returns may not be steady compared to equity or debt funds.
2. Evaluate Your Financial Goals

If your goal is wealth creation over a long period, equity-focused funds may be better.
If you are looking for hedging against inflation, gold may offer more stability than silver.
3. Diversification Balance

Diversification is essential but over-diversification can dilute returns.
Adding silver should be based on your overall asset allocation. If you already have exposure through Sundaram Multi Asset Allocation Fund, silver-specific investment may not add much value.
4. Liquidity

Silver mutual funds have liquidity constraints as they depend on underlying silver markets.

Alternatives to Silver Mutual Funds
1. Continue with Multi-Asset Funds

Multi-asset funds already balance equity, debt, and commodities. Stick to your existing SIP.
2. Consider Actively Managed Equity Funds

Equity funds may offer better long-term returns and wealth creation opportunities.
3. Increase Exposure to Debt or Gold

If you want to hedge risks, increase your allocation to gold or balanced funds.
When Should You Consider Silver Mutual Funds?
You have a high-risk appetite and understand silver market dynamics.
Your portfolio lacks sufficient diversification in precious metals.
You can hold the investment for the long term (5-10 years) to mitigate volatility.
Final Insights
Investing in silver mutual funds is not necessary if your Sundaram Multi Asset Allocation Fund already includes silver exposure. Instead, consider focusing on equity or balanced funds for consistent long-term returns. Ensure your investment strategy aligns with your financial goals, risk tolerance, and time horizon. Regular review and disciplined investing will help you achieve your objectives.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 17, 2024Hindi
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Sir I want retire by corpus 3cr by 50, currently I am 39 age. Doing sip 50k and existing corpus of 50L in Mutual funds and fd of 25L,EPF 15L,
Ans: Retiring with a corpus of Rs. 3 crores by the age of 50 requires a clear strategy. Let us evaluate your current financial position and provide actionable steps to achieve your retirement goal.

Current Financial Overview
Age: 39 years (11 years to retirement)

Existing Mutual Fund Corpus: Rs. 50 Lacs

Fixed Deposit Corpus: Rs. 25 Lacs

EPF Corpus: Rs. 15 Lacs

Monthly SIP Contribution: Rs. 50,000

Retirement Goal: Rs. 3 Crores at age 50

Assessing Your Current Progress
Your combined existing corpus is Rs. 90 Lacs (mutual funds, FD, EPF).

Your SIP contributions over 11 years will add significant value.

Growth in your investments is critical to reaching the Rs. 3 crore goal.

Recommendations for Achieving Your Goal
1. Review and Optimise Existing Investments
Focus on actively managed mutual funds for potential higher returns.

Avoid index funds as they cannot outperform the market. Active funds offer better growth with expert management.

Diversify your portfolio across equity and hybrid mutual funds for stability and growth.

2. Reevaluate Fixed Deposits (FDs)
Fixed deposits offer low returns, which may not keep pace with inflation.

Shift a part of the FD corpus to well-performing debt mutual funds.

Debt funds provide tax efficiency and moderate returns, better than FDs.

3. Leverage EPF Growth
EPF offers guaranteed returns with tax benefits.

Keep contributing regularly and avoid early withdrawals.

Let EPF serve as a low-risk component of your retirement corpus.

4. Enhance SIP Contributions Gradually
Increase your SIP amount annually as your income grows.

Even a 10-15% yearly increase can significantly impact your retirement corpus.

Automate your SIPs to maintain consistency and discipline.

5. Address Mutual Fund Taxation Rules
Long-term capital gains (LTCG) from equity mutual funds are taxed at 12.5% above Rs. 1.25 lakh.

Short-term gains are taxed at 20%. Factor this into your maturity projections.

Efficiently plan withdrawals post-retirement to minimise tax liability.

6. Avoid Direct Plans
Direct funds lack personalised guidance and market insights.

Invest through a Certified Financial Planner for expert recommendations.

Regular plans help you make informed decisions and adjust strategies.

7. Monitor and Rebalance Portfolio
Review your investments at least annually.

Rebalance based on market performance and your risk appetite.

Align your portfolio to your retirement timeline.

Risk Management
1. Health Insurance
Ensure adequate health insurance coverage to protect your savings from medical emergencies.

Opt for top-up plans for additional coverage, if needed.

2. Life Insurance
If you have any investment-linked policies (ULIP or endowment), consider surrendering them.

Reinvest proceeds into mutual funds for better returns.

Continue term insurance for family protection.

Final Insights
With your current savings, SIPs, and disciplined investing, you are well-positioned to reach Rs. 3 crores. Focus on optimising your portfolio, increasing SIPs, and managing risks effectively. Track your progress regularly and adjust your strategy as needed. Consistency and informed decisions will help you achieve your early retirement goal.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 17, 2024Hindi
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I have a debt of 1 lakh i kept the gold as mortgage for my friends operation and i am still a student. Its been two weeks since its at the gold shop. What should i do, no one is there to help me even my parents dont know about it
Ans: First, stay calm and think logically. Your current focus should be on resolving the loan and retrieving your gold.

You have taken a responsible step by helping your friend in a medical emergency. This is commendable.

However, keeping your gold mortgaged for long can lead to additional interest charges. This will increase your financial burden.

Since you are still a student, it may be challenging to generate funds immediately. Hence, a structured plan is needed.

Exploring Immediate Solutions
1. Talk to Your Friend’s Family

Approach your friend’s family for assistance. Explain the situation politely and seek their help.

They might not know the extent of your contribution and may help you financially.

2. Seek Support from Trusted Adults

Though difficult, consider talking to a trustworthy adult. It could be a family member, teacher, or mentor.

They might guide you or offer financial support without judgment.

3. Part-Time Work or Freelancing

Look for part-time jobs or freelancing opportunities to generate income.

Focus on skills like tutoring, content writing, or online tasks to earn quickly.

4. Consider Student Loans

Many banks offer small loans for students with minimal documentation.

Approach a bank or financial institution for a short-term loan to clear your debt.

5. Negotiate with the Gold Shop

Visit the gold shop and request an extension or reduction in interest charges.

Be honest about your financial situation. Some shopkeepers might offer relief.

Avoid Risky Alternatives
Avoid borrowing from unverified sources. High-interest informal loans will worsen your financial situation.

Don’t resort to drastic measures. Selling the gold permanently is not recommended unless unavoidable.

Building Financial Discipline
Once the current issue is resolved, focus on building a small emergency fund. Even Rs. 500 saved monthly can be helpful.

Avoid taking financial responsibility beyond your capacity in the future.

Final Insights
Helping a friend during their difficult time shows your compassionate nature. However, now it is essential to prioritise your financial stability. Act swiftly to retrieve your gold, as delays can lead to compounded interest. Seek support from trusted people or institutions to overcome this challenge. Your current situation, though challenging, is a learning opportunity for better financial planning in the future.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

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Hello Sir, I have 40 Lakhs that I want to invest in lumpsum and then around 1 lakh SIP/month.I choose the below MF's to invest considering my risk appetite. [Moderate to high] HDFC Flexicap Direct plan Growth Nippon Multicap Fund Direct Growth Bandhan Small Cap Fund Direct Growth Edelweiss Midcap Direct Plan Growth SBI Contra Direct Plan Growth My Plan for Lumpsum: Invest 20 lakhs distributing it in above 5 funds (4 lakh each) Use another 20 Lakhs, put it in liquid fund and do STP to the above MF Hold for 10 years Plan for SIP of 1 Lakh: Hdfc Flexicap Direct plan Growth- 15K Nippon Multicap Fund Direct Growth- 15K Sbi Contra Direct Plan Growth -15K Quant Active Fund direct growth- 15K Bandhan Small Cap Fund Direct Growth- 20K Edelweiss Midcap Direct Plan Growth- 20K Question: Please help review the above plan for lumpsum and SIP and guide if there is any major flaw in it or need changes.
Ans: Your plan shows thoughtful diversification and allocation across categories. Let’s review the lumpsum, SIP, and fund selection strategies in detail.

Lumpsum Investment Plan
Diversification Across Categories: Your allocation of Rs 20 lakhs among large-cap, mid-cap, small-cap, and contra funds ensures good diversification.

Strategic Use of STP: Allocating Rs 20 lakhs into a liquid fund and initiating a systematic transfer plan (STP) is a prudent move. It reduces the risk of market volatility and ensures disciplined deployment of funds over time.

Room for Refinement: Ensure you align the STP duration with your risk appetite. A 6-12 month STP works for moderate-to-high risk investors. For a conservative approach, consider extending this to 18 months.

SIP Investment Plan
Balanced SIP Allocations: The monthly SIP of Rs 1 lakh is well-distributed across different fund categories. Allocating more to mid-cap and small-cap funds (20% each) aligns with your moderate-to-high risk profile.

Long-Term Focus: SIPs over 10 years will help you average market fluctuations. This approach aligns well with wealth-building goals.

Scope for Fine-Tuning: Consider reducing overlap in fund strategies. Some of your funds may invest in similar sectors or companies, leading to portfolio redundancy.

Evaluation of Fund Categories
1. Flexi Cap Funds
Flexi cap funds provide exposure to large, mid, and small-cap stocks.
They adjust dynamically based on market opportunities, balancing risk and returns.
2. Multicap Funds
Multicap funds must maintain a minimum of 25% allocation in large-cap, mid-cap, and small-cap stocks.
This ensures exposure to various market segments while limiting extreme risks.
3. Mid-Cap and Small-Cap Funds
These funds offer higher growth potential but come with greater volatility.
Ideal for long-term goals, but monitor performance every 1-2 years.
4. Contra Funds
Contra funds follow a contrarian investment strategy, focusing on undervalued stocks.
While offering unique opportunities, they require patience for results.
Key Areas for Improvement
Review Overlap in Portfolio:

Check the overlap between the flexi cap, multi-cap, and contra funds.
Too much overlap might dilute diversification benefits.
Add a Debt Component:

A small debt fund allocation, beyond the liquid fund, can help balance your portfolio.
This acts as a cushion during equity market corrections.
Active Fund Management:

Since you’ve chosen direct funds, ensure regular monitoring.
Investing through a Certified Financial Planner (CFP) ensures ongoing guidance and portfolio review.
Tax Implications
Lumpsum and STP Gains:

Any gains from the liquid fund during STP are subject to your income tax slab.
Ensure you plan for tax liabilities while making withdrawals.
Equity Mutual Funds:

LTCG above Rs 1.25 lakh is taxed at 12.5%.
Short-term capital gains (STCG) are taxed at 20%.
Tax Efficiency with SIPs:

Each SIP instalment has its own holding period. This means gains are taxed individually.
Risk Management
Volatility in Small- and Mid-Cap Funds:

While these categories offer higher returns, they also have greater volatility.
Avoid reallocating funds during market corrections to maximise compounding benefits.
Regular Reviews:

Perform yearly reviews of fund performance and category suitability.
Replace funds that consistently underperform benchmarks over 3-4 years.
Final Insights
Your investment plan is robust, aligning well with your risk appetite and long-term goals. The use of lumpsum and STP is commendable, and the SIP allocations show a focus on disciplined investing.

However, focus on reducing portfolio overlap and adding a debt component for better risk management. Monitor fund performance regularly, and consider engaging a CFP for periodic reviews to ensure your portfolio stays aligned with your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

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Me at Age 40 with my monthly income about 3 lacs and my wife about 80K with Sip of her about 30 k with liability of 10K every month and myself with personal loan of 55 lacs have liability of 83k with Sip of 10500 and ppf of 7 lacs till date and postal RD of 13k. How to plan early repayment of loan along with building retriement corpus of 5 Cr along with 2 childrens ,one in 7th grade and other in 2 nd grade.
Ans: Your combined household income is Rs. 3.8 lakh monthly, a commendable financial position. You also have consistent investments and moderate liabilities. The key objectives are:

Early repayment of loans (Personal loan of Rs. 55 lakh).
Building a retirement corpus of Rs. 5 crore.
Securing educational and financial needs for two children.
To achieve these goals, a disciplined and strategic financial plan is essential.

Assessing Current Cash Flow
Your income is Rs. 3.8 lakh monthly, and liabilities total Rs. 93,000 (including your SIPs and PPF).
Fixed commitments take approximately 24% of your income.
The remaining 76% (approx. Rs. 2.87 lakh) is your disposable income.
Key Action:

Allocate 50% of the disposable income for systematic repayment of loans.
Use the remaining for building a robust investment portfolio.
Loan Repayment Strategy
Reduce Personal Loan Burden
Prepay 10–20% of the loan principal annually if no penalty applies.
Channel surplus funds (Rs. 1.43 lakh monthly) into prepayments.
Renegotiate Loan Terms
Approach your lender for lower interest rates.
Consolidate high-interest loans, if feasible, to a lower-cost option.
Minimise EMI Load
Avoid taking on new debt.
Redirect bonuses, incentives, or windfall gains towards your loan principal.
By focusing on early repayment, you can save significant interest and free cash flow sooner.

Strengthening Investments
Balanced Asset Allocation
Your current investments in SIPs, PPF, and postal RD are well-diversified. To enhance growth:

Continue SIPs of Rs. 10,500 but aim to increase SIP amounts yearly.
Invest surplus funds in actively managed mutual funds (growth-oriented).
Maintain PPF as a low-risk debt investment option.
Align with Long-term Goals
For a Rs. 5 crore retirement corpus:

Increase monthly investments as loan liabilities reduce.
Focus on equity mutual funds for long-term wealth creation.
Planning for Children’s Education
Education expenses for two children will rise as they approach higher studies.

Key Recommendations:

Start earmarking separate investments for their education.
Use balanced or hybrid funds to align with education timelines.
Set aside 25–30% of your annual bonus for this purpose.
Emergency Fund Maintenance
Your emergency fund in RD and PPF is adequate for now.

Suggestions:

Maintain 6–12 months’ expenses as a liquid contingency fund.
Use FD or liquid funds to ensure accessibility and stability.
Tax-efficient Investment Planning
With new tax rules, focus on minimising tax liabilities on investments:

Equity mutual funds: Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%.
Diversify into hybrid and debt funds to balance risk and tax efficiency.
Leverage Section 80C for PPF and SIP investments.
Key Financial Habits to Adopt
Review your financial goals and plans annually.
Avoid over-diversification. Too many funds dilute returns.
Automate savings and investments to ensure discipline.
Final Insights
Balancing loan repayment, investments, and education savings is achievable with a structured plan. Focus on systematic investments while steadily reducing your debt. This will free cash flow for long-term goals like retirement and children's education.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan  |7072 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 18, 2024

Asked by Anonymous - Nov 17, 2024Hindi
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I am in Australia,I am a nominee for a Fixed deposit in state bank of India branch in Chennai. In my deceased grandmother account. The state bank authorities want me to come personally to claim the amount. are there any alternative
Ans: Claiming a fixed deposit as a nominee without visiting India is possible, but it requires specific documentation and procedures. Below are some alternatives you can consider to avoid traveling to Chennai:

1. Approach the Indian Consulate in Australia
Visit the nearest Indian consulate or embassy in Australia.
They can assist with notarizing the required documents, including your identity and nomination proof.
Some consulates offer services like affidavit attestation, which is often required by Indian banks.
2. Authorise a Representative in India
Execute a Power of Attorney (POA) in favour of a trusted person in India.
The POA should be notarized by the Indian consulate in Australia and sent to India.
Your representative can then handle the claim process with the bank on your behalf.
Ensure the POA explicitly states the authority to claim the fixed deposit.
3. Submit Documents by Post or Courier
Confirm with the bank if they allow document submission by post.

Required documents may include:

Claim application form provided by the bank.
Your identity proof (passport and visa copy).
Proof of nomination (usually the fixed deposit receipt mentioning your name as the nominee).
Death certificate of your grandmother (original or attested copy).
Address proof in Australia.
Documents must be notarized by the Indian consulate or an equivalent authority.

4. Online Request or Email Communication
Contact the SBI branch via email or phone to check if they can initiate an online claim process.
Some branches might permit submission of scanned documents initially, followed by couriering notarized copies.
5. Legal Heir Certificate or Succession Certificate (if required)
Although you are a nominee, some banks may require additional documentation, such as a legal heir certificate or succession certificate, especially for large amounts.
If needed, engage a lawyer in India to assist with obtaining these documents and submitting them to the bank.
6. Reach Out to SBI’s NRI Services
SBI offers NRI-specific services. Contact their NRI helpline or NRI customer service team to escalate your request.
Email: contactcentre at sbi.co.in
Toll-Free Numbers (NRI): Available on the SBI website (https://sbi.co.in).
Key Points to Note
Ensure all documents are attested by authorized entities like the Indian consulate.
Keep scanned copies of all communications and receipts for your records.
Stay in contact with the bank manager for regular updates and ensure compliance with their procedures.
If none of these alternatives work, you may need to visit India personally to complete the process.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Milind

Milind Vadjikar  |665 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 17, 2024

Asked by Anonymous - Nov 14, 2024Hindi
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Hello finance guru, I am 45 years old , with 2 kids. I live in a Tier-1 city with ~49 Crores of networth. This includes ~12 crores of investment in real estate (land and a flat at a prime location), ~34 crores in equity, ~1 Cr in Crypto and ~2 Cr in cash. I work in a pharmaceutical firm in an executive role and planning to retire in the next 1 year. My knowledge on finances is average and would like to seek your advise. I would like to generate ~2.5 lakhs per month for expenses from my savings and would like to double my networth in the next 7 years. Could you provide me help on the directions I can take to make this working?
Ans: Hello;

Deducting the real estate and crypto investments from your networth, we have 36 Cr.

You may invest 4 Cr each in 2 equity savings type mutual funds and 2 conservative hybrid debt oriented mutual funds.

If you do a 3% SWP from each of these funds you may expect a monthly payout of around 2.8 L (post-tax).

These funds generally yield 8-9% returns so they will continue to provide inflation adjusted income to you.(6% inflation rate considered)

Balance remains around 20 Cr, while 2 Cr may be retained as liquid fund for contingency requirement, the balance 18 Cr you may invest in combination of mutual funds, PMSs and AIFs.

As you enter retirement phase your focus should shift from "maximising returns" to "decent returns with moderate risk" since return of capital is more important than return on capital.

Happy Investing;
X: @mars_invest

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.
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