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Praseeja

Praseeja Nambiar  | Answer  |Ask -

Career Counselling Expert - Answered on May 05, 2023

An internationally certified career coach, Praseeja Nambiar works as a counsellor at the Stonehill International School, Bengaluru.
In the last nine years, she has helped over 1,000 students with their admissions into Indian and international universities.
Nambiar received her training from Global Career Counselling and the University of California, LA (UCLA) Extension and is certified as a career coach by Certified Career Services Provider.
She contributes to the International Career and College Counselling institute by training other counsellors across the globe.
Nambiar is also an evaluator for the Council of International Schools and will soon be leading the IB careers-related programme at Stonehill International School.... more
santosh Question by santosh on Apr 12, 2023Hindi
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Career

Hi Sir, My son will clear 10th CBSE broad till year, move to 11th. His favorite subject is maths..He is not interested in Science... Please suggest which course he take admission now..

Ans: He can take math as one of the core subjects and study statistics in university. Applied math is also an option in university. What are his other interests, if I may know?
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Praseeja

Praseeja Nambiar  | Answer  |Ask -

Career Counselling Expert - Answered on Apr 26, 2023

Asked by Anonymous - Apr 26, 2023Hindi
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Career
My nephew has appeared for class 10 exam from CBSE this year. He wanted to pursue research and be a scientist but is now confused about his stream. He is good at math, analytical skills but doesn't like biology. Should he opt for science or commerce? Would CA or commerce be a good option for him?
Ans: Thank you for the question. In my understanding, your nephew enjoys Physics and chemistry. Research in these areas can also be taken. We dont need to take biology as a subject he he does not enjoy studying that subject.
If his science scores are consistently high and he likes exploring newer areas of learning, research can be a very good avenue. Since you say that his analytical skills is good and he is good at math too, you can look at computing sciences, applied mathematics, data sciences and Design engineering. Please note, computing sciences is slightly different than computer science. Applied math and Big Data is an upcoming area of study and with good analytical skills, he should be able to do that.
Research can be done in any area. One must understand that research is "finding, critiquing, analysing sources of information and rationalising to investigate a particular scenario". Now this can be done in any field - from history to molecular genetics.

Based on the information you have shared here, I wold suggest he keeps his science options open and opts for PCMC in his 11th and 12th. He can focus on building his analytical skills by participating in high school research groups and learn ways to investigate data.

..Read more

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Ramalingam

Ramalingam Kalirajan  |7249 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 10, 2024

Asked by Anonymous - Dec 10, 2024Hindi
Money
Iam retired state govt employee I will draw pension of Rs.58000 and will get lumsum of 5600000 beside I will get rent of 75000. Housing loan of 4000000 and 1500000 gold loan EMI is 61500 including Insurance. Suggest whether I should clear the entire loans or invest properly
Ans: You have a clear income and debt structure. A pension of Rs. 58,000, rental income of Rs. 75,000, and a lump sum of Rs. 56 lakhs provide robust cash inflow. On the other side, you have two significant loans—a housing loan of Rs. 40 lakhs and a gold loan of Rs. 15 lakhs. Your monthly EMI of Rs. 61,500, including insurance, impacts your cash flow.

The decision to clear loans or invest requires analyzing multiple angles. Let's evaluate step by step.

Evaluating Loan Repayment
1. Interest Rates Analysis

Housing loans usually have lower interest rates, especially for retired government employees.
Gold loans generally carry higher interest rates than housing loans.
2. Tax Benefits

Housing loans provide tax deductions under Section 80C and 24(b).
Repaying the housing loan entirely removes this tax advantage.
3. Financial Comfort

Continuing EMIs ensures liquidity for other goals.
Clearing loans offers peace of mind and reduces financial obligations.
Investing the Lump Sum
1. Diversification for Safety and Growth

Divide the Rs. 56 lakhs into debt and equity investments.
Debt investments ensure safety and regular income.
Equity investments can provide long-term growth potential.
2. Focus on Debt-Free Retirement

Allocate funds to secure essential expenses post-retirement.
Retaining liquidity helps manage unforeseen expenses.
3. Tax-Effective Planning

Tax-efficient investments can optimize post-tax returns.
Consider long-term capital gains taxation for equity mutual funds.
Calculating Cash Flow Balance
1. Income vs. Expenses

Post-retirement income: Rs. 1.33 lakhs (pension + rent).
EMI obligation: Rs. 61,500.
Net disposable income: Rs. 71,500 (excluding insurance).
2. Post-Loans Scenario

Clearing loans reduces your outflows.
A debt-free position increases monthly savings.
Suggested Action Plan
Step 1: Addressing High-Interest Loan
Clear the gold loan as it has higher interest rates.
Reducing this burden improves monthly cash flow.
Step 2: Partial Housing Loan Repayment
Consider a partial prepayment of the housing loan.
This will reduce EMIs and interest outgo.
Step 3: Allocate Remaining Funds to Investments
Create a balanced portfolio with equity and debt investments.
Ensure it aligns with your risk appetite and goals.
Step 4: Emergency Fund Creation
Keep 6–12 months’ expenses as an emergency fund.
Park this amount in a liquid or ultra-short-term debt fund.
Step 5: Insurance and Legacy Planning
Review your insurance coverage for adequacy.
Plan for wealth transfer to ensure family financial security.
Benefits of Investing Through Regular Funds with a Certified Financial Planner
Regular funds provide guided expertise for financial goals.
Certified Financial Planners ensure disciplined investment strategies.
They monitor your portfolio and make necessary adjustments.
Direct funds lack personalized advice, leading to uninformed decisions.

Insights on Index Funds
Index funds mimic market indices but lack active management.
They cannot outperform markets during corrections.
Actively managed funds adapt to market trends for better returns.
Final Insights
Combining debt repayment with smart investments creates financial stability. Clearing the gold loan reduces high-interest liabilities. Partly repaying the housing loan offers balance between liquidity and debt reduction. Investing the remaining lump sum ensures future growth and income stability.

Collaborating with a Certified Financial Planner ensures tailored financial strategies. Their expertise aligns your financial decisions with long-term goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7249 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 10, 2024

Asked by Anonymous - Dec 10, 2024Hindi
Money
NRI, age 40 years with current corpus of INR 2.2 Cr of which 1.4 cr invested in equity and 80 lakhs in NRE FD. No liability, annual expenses of 7 lakhs including term and health insurance premiums. Intending to retire in 1 year. Can I go ahead?
Ans: Your current financial status is solid. A corpus of Rs. 2.2 crore with no liabilities is commendable. However, early retirement needs careful assessment. Here’s a 360-degree evaluation:

1. Corpus Allocation Analysis
Equity Investments (Rs. 1.4 crore):
Your allocation to equity provides growth potential. However, the volatility of equities can impact your corpus post-retirement. Reduce equity exposure to 50-60% as you approach retirement. This ensures stability.

NRE Fixed Deposit (Rs. 80 lakh):
FDs are safe but provide low post-tax returns. Consider diversifying some FD funds into debt mutual funds. Debt funds offer tax efficiency and better liquidity.

2. Expense Coverage Post-Retirement
Annual Expense Estimate (Rs. 7 lakh):
Your annual requirement is reasonable for your corpus. However, inflation will increase this over time.

Assuming inflation at 6%, your expenses could double in 12 years. Plan for this increase.

Maintain 2-3 years’ expenses (Rs. 14-21 lakh) in a liquid fund or savings account for emergencies.

3. Retirement Portfolio Restructuring
Equity Component:
Retain high-growth equity funds for long-term wealth creation. Actively managed funds perform better during volatile markets compared to index funds.

Regular plans through a Certified Financial Planner (CFP) ensure better guidance and disciplined investment. Avoid direct funds as they lack expert advice and personalised support.

Debt Component:
Allocate 30-40% to debt funds. They provide stability and regular withdrawals with better post-tax returns compared to FDs.

Hybrid Funds:
Consider balanced advantage funds. These adjust equity and debt allocations dynamically, offering stability and growth.

4. Emergency and Contingency Planning
Maintain a contingency reserve of Rs. 15-20 lakh. This can cover unexpected medical or personal expenses.

Liquid funds or short-term debt funds are ideal for this reserve. They offer higher returns than savings accounts.

5. Insurance Review
Health Insurance:
Ensure you have comprehensive health insurance. Medical inflation can erode your savings quickly.

Term Insurance:
If your family is financially independent, term insurance may not be essential post-retirement.

6. Tax Planning for Investments
Equity Mutual Funds:
Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20%. Plan redemptions wisely to reduce tax outgo.

Debt Mutual Funds:
Both LTCG and STCG are taxed as per your income slab. Use systematic withdrawal plans (SWPs) to spread withdrawals and optimise taxes.

7. Post-Retirement Withdrawal Strategy
Create a withdrawal plan to match your annual expense needs. Withdraw from debt funds first to let equity investments grow.

Use SWPs in mutual funds to ensure tax efficiency and regular income.

Avoid withdrawing from equity during market corrections. This protects your capital from losses.

8. Inflation and Longevity Risks
Inflation will erode purchasing power over time. Balance equity and debt to protect against inflation.

Plan for a retirement horizon of at least 40 years. Your investments should grow faster than inflation.

9. Children’s Financial Needs
If you have children, ensure their education and other major expenses are funded separately.

Avoid dipping into your retirement corpus for their needs.

10. Professional Support
Work with a Certified Financial Planner to create a customised retirement plan. A CFP ensures your portfolio aligns with your long-term goals.
11. Lifestyle Adjustments
Keep lifestyle expenses in check post-retirement. This ensures your corpus lasts longer.

Consider part-time or consulting work for the first few years of retirement. It provides additional income and keeps you engaged.

Final Insights
You are in a strong financial position. However, early retirement requires meticulous planning.

Reallocate your investments to reduce risks and enhance stability. Plan for inflation and longevity to safeguard your financial independence.

Maintain a disciplined withdrawal strategy to ensure your corpus sustains your lifestyle.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Dr Rajiv

Dr Rajiv Kovil  |7 Answers  |Ask -

Diabetologist - Answered on Dec 10, 2024

Dr Rajiv

Dr Rajiv Kovil  |7 Answers  |Ask -

Diabetologist - Answered on Dec 10, 2024

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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