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R P Yadav  |304 Answers  |Ask -

HR, Workspace Expert - Answered on Nov 20, 2023

R P Yadav is the founder, chairman and managing director of Genius Consultants Limited, a 30-year-old human resources solutions company.
Over the years, he has been the recipient of numerous awards including the Lifetime Achievement Award from World HR Congress and HR Person Of The Year from Public Relations Council of India.
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B Question by B on Nov 08, 2023Hindi
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Career

My son (age 21) is studing MCA (Master of Computer Application) after completing B Sc in Computer Science and expected to complete MCA by 2025. Please advice for his career option.

Ans: he is on right track.on completion of MCA pl contact me
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Ramalingam

Ramalingam Kalirajan  |5163 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 23, 2024

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I am 42 and want to retire by 60, I have 10 lacs in MF, 10lac in equity, 50 lac in FD, 4cr in real estate land shops etc. I don't own a house. What should be my strategy from here my monthly expenditure is close to 2 lac.
Ans: Current Financial Overview
You are 42 years old. You want to retire by 60. You have Rs. 10 lakhs in mutual funds. You have Rs. 10 lakhs in equities. You have Rs. 50 lakhs in fixed deposits. Your real estate investments are worth Rs. 4 crores. You don't own a house. Your monthly expenditure is Rs. 2 lakhs.

Assessing Your Financial Position
Mutual Funds:

Rs. 10 lakhs in mutual funds.
This provides potential for growth.
Equities:

Rs. 10 lakhs in equities.
This is good for long-term growth.
Fixed Deposits:

Rs. 50 lakhs in fixed deposits.
Safe but with low returns.
Real Estate:

Rs. 4 crores in land and shops.
Significant value but not liquid.
Monthly Expenditure:

Rs. 2 lakhs per month.
High living expenses.
Investment Strategy
Emergency Fund:

Keep at least 6 months of expenses.
This means Rs. 12 lakhs.
Diversify Investments:

Increase mutual fund investments.
Focus on large-cap and balanced funds.
Fixed Deposits:

Consider reducing FD amounts.
Reinvest in mutual funds for better returns.
Equities:

Continue with equity investments.
Diversify within sectors.
Real Estate:

Real estate is illiquid.
Consider selling some assets.
Reinvest proceeds in diversified mutual funds.
Retirement Planning
Calculate Retirement Corpus:

Aim for a substantial corpus.
This should cover post-retirement expenses.
Systematic Investment Plan (SIP):

Start SIPs in actively managed mutual funds.
This ensures disciplined investing.
Regular Review:

Review your portfolio every six months.
Adjust based on market conditions.
Benefits of Actively Managed Funds
Expert Management:

Professionals manage actively managed funds.
They aim to outperform the market.
Better Returns:

Actively managed funds often give higher returns.
They adapt quickly to market changes.
Disadvantages of Index Funds
No Outperformance:

Index funds mirror the market.
They can't outperform during good market phases.
Lack of Flexibility:

Index funds lack flexibility in volatile markets.
Disadvantages of Direct Funds
Complex Management:

Direct funds need more personal management.
Regular funds offer professional oversight.
Regular Funds Benefits:

Investing through MFD with CFP credential is beneficial.
They provide expert advice and management.
Owning a House
Consider Buying a House:

Owning a house gives stability.
It reduces future rent expenses.
Use Existing Assets:

Use some FD or real estate proceeds.
Fund the house purchase without heavy loans.
Tax Planning
Utilise Tax Benefits:

Invest in tax-saving instruments.
Reduce taxable income and save more.
Final Insights
To retire by 60, focus on diversified investments. Ensure an emergency fund. Increase mutual fund investments. Consider selling some real estate. Reinvest proceeds wisely. Buy a house for stability. Review your portfolio regularly. Consult a Certified Financial Planner for personalized advice. Stay disciplined and focused on your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5163 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 23, 2024

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Money
I am 43 years old and work in private sector. I have 3L salary per month and pay 30000 as PF contribution. I have a home loan emi of 30,000 with SBI, 20,000 emi for car loan. I have a chitti for 10L for which i am paying 23k per month and yet to get the amount. I have SIP of 40,000 on various funds. I have a term insurance for 2.5Cr with ICICI. I have company insurance as well. I have opted for LIC Jeevan shanti for 5L one time. I recently opted for Jeevan Utsav for 5L per annum. I am confused now, if this is a right way to plan my financials and retirement. I need to plan for a house in next 5yrs, 2 kids education- one in 4th std and another in 7th std. Pls help me to plan properly.
Ans: Current Financial Situation
You have a solid monthly income of Rs 3 lakhs. Your expenses and investments show a balanced approach, but there's room for improvement. Let's break it down.

Income and Expenses
Monthly Income: Rs 3 lakhs

Provident Fund Contribution: Rs 30,000

Home Loan EMI: Rs 30,000

Car Loan EMI: Rs 20,000

Chitti Payment: Rs 23,000

SIP Investments: Rs 40,000

Insurance Policies: LIC Jeevan Shanti and Jeevan Utsav

Insurance Coverage
Term Insurance: Rs 2.5 Crores with ICICI

Company Insurance: Additional coverage

Current Investments
LIC Jeevan Shanti: Rs 5 lakhs one-time investment

LIC Jeevan Utsav: Rs 5 lakhs per annum

SIPs: Rs 40,000 per month in various funds

Immediate Concerns
Home Loan: Rs 30,000 EMI

Car Loan: Rs 20,000 EMI

Chitti: Rs 23,000 per month

Financial Goals
New House: In the next 5 years

Kids' Education: For two children (4th and 7th standard)

Retirement Planning

Evaluating Your Investments
LIC Jeevan Shanti and Jeevan Utsav: These are traditional insurance plans. They often provide lower returns compared to mutual funds. You might consider surrendering these policies and reinvesting the amount in mutual funds for better growth.

SIPs: Investing Rs 40,000 per month in mutual funds is a good strategy. Continue this, as it provides diversification and potential for higher returns.

Recommendations
Focus on Debt Reduction
Prioritize Debt: Focus on clearing your high-interest debts first. Your chitti payment and car loan should be top priorities.

Home Loan: Continue with the home loan EMI, but consider prepaying if you have extra funds. This will reduce your interest burden.

Increase Investment in Mutual Funds
Diversified Equity Funds: Increase your SIP contributions gradually. These funds offer good growth potential.

Balanced Funds: These invest in both equity and debt, providing stability and growth. Consider adding them to your portfolio.

Education Fund for Kids
Dedicated SIPs: Start separate SIPs for your children's education. Calculate the future cost and invest accordingly.

Child Plans: Look into child-specific mutual funds. These funds focus on long-term growth for education expenses.

Planning for a New House
Systematic Investment Plan: Start a dedicated SIP for your new house. Calculate the amount needed in 5 years and invest accordingly.

Avoid Real Estate Investments: Instead, focus on mutual funds. They offer liquidity and better returns.

Retirement Planning
Increase SIPs: Gradually increase your SIP contributions as your salary grows. This will help build a substantial retirement corpus.

Diversified Portfolio: Ensure your retirement portfolio has a mix of equity and debt funds. This provides growth and stability.

Final Insights
Review Insurance Policies: Consider surrendering LIC policies and reinvesting in mutual funds for better growth.

Debt Management: Prioritize paying off high-interest debts like the chitti and car loan.

Increase SIPs: Invest more in diversified and balanced funds.

Plan for Kids' Education: Start dedicated SIPs for education expenses.

New House Fund: Use a dedicated SIP to save for your new house in 5 years.

Retirement Planning: Focus on building a diversified portfolio for a secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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