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Mayank

Mayank Chandel  |1606 Answers  |Ask -

IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Jun 20, 2024

Mayank Chandel has over 18 years of experience coaching and training students for various exams like IIT-JEE, NEET-UG, SAT, CLAT, CA and CS.
Besides coaching students for entrance exams, he also guides Class 10 and 12 students about career options in engineering, medicine and the vocational sciences.
His interest in coaching students led him to launch the firm, CareerStreets.
Chandel holds an engineering degree in electronics from Nagpur University.... more
Asked by Anonymous - Jun 15, 2024Hindi
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Hi sir,My son has got CSE in Manipal jaipur in first round.we have already secured seat in Benett university Noida..also waiting for Thaapar counseling on 12 basis...he secured 92 percent..what do u think is better for him

Ans: hi
prefer Manipal over Thapar & bennet
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Ramalingam

Ramalingam Kalirajan  |5018 Answers  |Ask -

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

Asked by Anonymous - Jul 02, 2024Hindi
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My current monthly income is 1.2l i have a ppf of 15k and RD of 15k per month. I have 2 SIPs worth 3k each a month. Kindly suggest how much should I invest and where to invest so that I get around 4 5 Cr by the age of 45. FYI my current age is 29 and i hold no liabities as of now and unmarried.
Ans: You aim to accumulate Rs. 4-5 crores by the age of 45. With a current monthly income of Rs. 1.2 lakhs, you have a strong base to achieve this goal.

Current Investments
Your current investments include:

PPF: Rs. 15,000 per month

RD: Rs. 15,000 per month

SIPs: Rs. 6,000 per month (2 SIPs of Rs. 3,000 each)

Assessing Your Current Investments
PPF:

Advantages:

Safe and secure investment.

Tax benefits under Section 80C.

Decent long-term returns.

Disadvantages:

Lock-in period of 15 years.

Limited growth compared to equities.

Recurring Deposit (RD):

Advantages:

Guaranteed returns.

Suitable for short-term goals.

Disadvantages:

Taxable interest income.

Lower returns compared to mutual funds and stocks.

Systematic Investment Plans (SIPs):

Advantages:

Disciplined investment approach.

Potential for high returns over long term.

Rupee cost averaging benefits.

Disadvantages:

Market-linked risks.
Recommended Investment Strategy
Increase Equity Exposure
To achieve Rs. 4-5 crores by 45, you need higher equity exposure. Equity investments have historically provided higher returns compared to debt instruments.

Increase SIPs:

Increase SIP investments to Rs. 40,000 per month.

Diversify across large-cap, mid-cap, and multi-cap funds.

Balanced Approach
Maintain a balanced approach by continuing some investments in safe instruments.

Continue PPF:

Keep contributing Rs. 15,000 per month.

Provides stability and tax benefits.

Review RD:

Evaluate RD returns.

Consider diverting some RD funds to equity or hybrid funds for better growth.

Consider Hybrid Funds
Hybrid funds provide a mix of equity and debt, offering balanced risk and returns.

Monthly Investment:

Invest Rs. 10,000 per month in hybrid funds.

Suitable for moderate risk tolerance.

Emergency Fund
Ensure you have an emergency fund covering 6-12 months of expenses.

Safety Net:

Maintain liquidity for unforeseen expenses.

Keep it in a liquid fund or high-interest savings account.

Regular Reviews and Rebalancing
Monitor and rebalance your portfolio periodically to stay aligned with your goals.

Portfolio Review:

Quarterly or semi-annual reviews.

Adjust based on market conditions and personal goals.

Final Insights
To achieve Rs. 4-5 crores by 45, increase your equity exposure. Consider enhancing your SIP contributions significantly. Maintain a balanced approach with continued PPF contributions and emergency funds. Regularly review and rebalance your portfolio. This strategy aligns with your financial goals and risk profile, ensuring a secure and prosperous future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5018 Answers  |Ask -

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

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My Father has purchase a property for rs 115000 in year 1994.at Bhayandar west district Thane at Maharashtra state.and my Father did this registration in amnesty scheme in year 2008.and after that my Father died in year 2014.and after I made a release deed transfer this property in my name (son). I sold this residential property in June 2024for rs 30lakh.in this case I want to know the status of capital gain is there or not I also want to know if I sell this residential property .I can purchase ashop or not. If I want to save capital gain what is the solution to save my tax. Thanking u.
Ans: You sold a property in June 2024 for Rs 30 lakh. It was bought for Rs 1,15,000 in 1994. Let's evaluate if there's a capital gain.

Indexed Cost of Acquisition

The property purchase cost will be adjusted for inflation. This is called the Indexed Cost of Acquisition (ICA). The ICA is calculated using the Cost Inflation Index (CII) provided by the Income Tax Department.

Calculating Indexed Cost

Calculate the ICA to understand your capital gain. Since we won't use specific formulas here, you can consult a Certified Financial Planner to get the precise ICA value. This helps in determining the exact capital gain.

Long-Term Capital Gains (LTCG)

Since you held the property for more than 24 months, it is classified as a long-term asset. The profit from the sale, after adjusting for the ICA, is your Long-Term Capital Gain (LTCG).

Tax on LTCG

LTCG is taxed at 20% with indexation benefits. However, there are ways to save on this tax.

Investing in Another Property

You can save on capital gains tax by investing in another residential property. This is covered under Section 54 of the Income Tax Act. If you buy a residential house within two years or construct one within three years, you can claim exemption.

Investing in Capital Gains Bonds

Another option is to invest in Capital Gains Bonds under Section 54EC. These bonds have a lock-in period of five years and provide tax exemption on the gains. The maximum investment limit in these bonds is Rs 50 lakh.

Purchasing a Shop

Buying a shop will not provide capital gains tax exemption under Section 54. The exemption is only for residential properties. If you sell a residential property, you must reinvest in a residential property to save on capital gains tax.

Other Options to Save Tax

Residential Property: Invest in another residential property within two years.

Construction: Construct a new house within three years.

Capital Gains Bonds: Invest in these bonds within six months of the sale.

Final Insights

To save on capital gains tax, reinvest in a residential property or Capital Gains Bonds. Purchasing a shop will not help in saving tax on capital gains. Consulting a Certified Financial Planner can help you navigate these options efficiently.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5018 Answers  |Ask -

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

Asked by Anonymous - Jul 02, 2024Hindi
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I am 58 years old and draw a monthly pension of 45K. I made a lot of money post taking a VRS 15 years back but spent most of it on my only child travelling and a home worth 5 cr plus. I am covered for medical/heath by CGHS and also a 30 lac private health insurance. I have about 30 lac worth jewellery and a similar amount in my SB account. Please advise what should be my investment plan to ensure a regular monthly income of atleast 30K per month in addition to the pension I get.
Ans: You are 58 years old and receive a monthly pension of Rs 45,000. You have spent a significant amount on your child's education and travel, and own a home worth over Rs 5 crore. You have medical coverage from CGHS and a private health insurance worth Rs 30 lakh. Additionally, you possess jewellery worth Rs 30 lakh and have Rs 30 lakh in your savings bank account. Your goal is to ensure an additional monthly income of at least Rs 30,000.

Evaluating Your Investment Needs
Your primary need is to generate a regular income of Rs 30,000 per month. This should be achieved with minimal risk and high liquidity.

Liquid Funds
Liquid funds are suitable for very short-term investments. They invest in high-quality, short-term securities. These funds offer safety and liquidity, making them ideal for maintaining emergency funds.

Safety: Invests in high-quality securities.
Liquidity: Easy access to funds.
Ultra-Short Duration Funds
Ultra-short duration funds are suitable for a horizon of 6 months to 1 year. They offer slightly higher returns compared to liquid funds while maintaining a low level of risk.

Higher Returns: Better than liquid funds.
Low Risk: Invests in low-risk instruments.
Short Duration Funds
Short duration funds are suitable for an investment horizon of 1 to 3 years. These funds invest in debt instruments with short maturities and offer a balance between risk and return.

Moderate Risk: Suitable for short-term goals.
Reasonable Returns: Better than ultra-short funds.
Monthly Income Plans (MIPs)
Monthly Income Plans can provide a regular income. These funds invest in a mix of debt and equity, offering a steady income with potential capital appreciation.

Regular Income: Suitable for monthly income needs.
Balanced Risk: Mix of debt and equity.
Benefits of Actively Managed Funds
Actively managed funds can provide better returns compared to index funds. These funds are managed by professional fund managers who make strategic decisions to outperform the market.

Professional Management: Expert fund managers handle your investments.
Flexibility: Adapt to market changes.
Disadvantages of Index Funds
Index funds track a specific market index, but they may not perform well in all market conditions. They lack active management and can result in average returns.

Average Returns: May not outperform the market.
Lack of Flexibility: Cannot adapt to changes quickly.
Investing Through a Certified Financial Planner
Investing through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) credential offers several benefits. These professionals provide tailored investment strategies and regular portfolio reviews.

Personalized Advice: Tailored to your needs.
Regular Reviews: Ensures your investments stay on track.
Creating a Diversified Portfolio
A diversified portfolio can help reduce risk and enhance returns. Spread your investments across different funds to achieve better stability and growth.

Suggested Allocation
Liquid Funds: Rs 5 lakh for emergency needs.
Ultra-Short Duration Funds: Rs 5 lakh for short-term goals.
Short Duration Funds: Rs 10 lakh for moderate-term goals.
Monthly Income Plans: Rs 10 lakh for regular monthly income.
Tax Efficiency
Ensure that your investments are tax-efficient. Short-term mutual funds are taxed based on your income slab, while long-term capital gains (if held over 3 years) are taxed at 20% with indexation benefits.

Monitoring Your Investments
Regularly review your portfolio to ensure it aligns with your goals. Make adjustments as needed with the help of your CFP.

Final Insights
Your goal of generating an additional monthly income of Rs 30,000 is achievable through a diversified and balanced investment approach. Focus on liquidity, safety, and moderate returns. Leverage the expertise of a Certified Financial Planner for optimal results.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5018 Answers  |Ask -

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

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Hi, I have 13 funds in my portfolio worth of 28 Lakhs. I have been investigating from last 6 years. Wonder if I need to change my funds for better returns. Thank you.
Ans: Portfolio Overview
Managing 13 funds over 6 years is commendable. A Rs. 28 lakh portfolio shows your commitment. Let’s analyze and evaluate for better returns.

Diversification and Overlap
Diversification reduces risk. However, too many funds can lead to overlap.

Diversification:

Ensures your investments are spread across sectors and asset classes.

Reduces risk associated with a single fund or sector.

Overlap:

Too many funds can lead to similar investments.

This dilutes the benefit of diversification.

Evaluate if your funds are truly diversified or if there is overlap.

Performance Evaluation
Assess the performance of your funds.

Historical Performance:

Check the performance over different market cycles.

Compare with benchmark indices.

Consistency:

Look for funds with consistent performance.

Avoid funds with high volatility.

Fund Manager and Expense Ratio
The fund manager's expertise and the expense ratio impact returns.

Fund Manager:

Evaluate the fund manager’s track record.

Consistency and experience matter.

Expense Ratio:

Lower expense ratios can improve net returns.

High expense ratios can eat into your gains.

Portfolio Rebalancing
Regular rebalancing aligns your portfolio with your goals.

Rebalancing:

Adjust your portfolio periodically.

Maintain the desired asset allocation.

Goals and Time Horizon:

Align your investments with your financial goals.

Consider your time horizon and risk tolerance.

Actively Managed vs. Passive Funds
Actively managed funds aim to outperform benchmarks.

Actively Managed Funds:

Fund managers actively select stocks.

Potential for higher returns.

Disadvantages of Index Funds:

Follow a passive investment strategy.

Limited potential for outperforming the market.

Actively managed funds offer better opportunities.

Professional Guidance
Consult a Certified Financial Planner for tailored advice.

Certified Financial Planner:

Provides personalized investment strategies.

Aligns investments with your goals and risk profile.

Review and Adjust:

Regular reviews are essential.

Adjust the portfolio as per market conditions and personal goals.

Final Insights
Having 13 funds may be excessive. Focus on diversification without overlap. Evaluate the performance, expense ratios, and fund manager’s track record. Regularly rebalance your portfolio. Consider the benefits of actively managed funds over index funds. Seek guidance from a Certified Financial Planner for personalized advice. This comprehensive approach ensures your portfolio aligns with your financial goals and market conditions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5018 Answers  |Ask -

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

Asked by Anonymous - Jul 01, 2024Hindi
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I want to invest 20000 monthly, for retirement, child education, house, emergency fund and travel abroad every 3yrs. How to allocate my money wisely to get proper return? I have two children, one 5yr old and one 11 years old. I am 37 yr old.
Ans: Investment Allocation for Future Goals

Understanding Your Goals

You want to invest Rs 20,000 monthly for several goals: retirement, children's education, a house, emergency fund, and travel abroad every three years. This approach is commendable. Let's break down how to allocate this investment wisely to achieve these goals.

Children's Education

Your children's education is a high-priority goal. For your 5-year-old, you have 13 years until college. For your 11-year-old, you have 7 years until college. A mix of balanced and growth-oriented funds can work here. These funds can offer steady returns with manageable risk.

Retirement Planning

You are 37 years old, aiming for a substantial corpus by retirement. Investing in equity mutual funds can offer significant growth over the long term. Diversify across large-cap, mid-cap, and flexi-cap funds. These funds can provide higher returns compared to fixed income options.

Buying a House

Buying a house is a major financial goal. If the goal is long-term (10-15 years), equity funds can help. For short-term (5-7 years), balanced funds can be better. They provide a mix of growth and stability. Avoid direct real estate investments due to high costs and low liquidity.

Emergency Fund

An emergency fund is crucial. Aim to have 6-12 months of expenses in liquid assets. Invest in liquid funds or short-term debt funds. These funds offer quick access to your money with moderate returns.

Travel Abroad

Traveling abroad every three years requires regular saving. You can use recurring deposits or short-term debt funds. These options provide stability and predictable returns. You can reinvest the returns for future trips.

Disadvantages of Index Funds

Index funds track market indices and lack flexibility. They don't outperform the market. Actively managed funds, however, aim to outperform. Skilled fund managers can adjust the portfolio to market conditions. This approach can lead to higher returns.

Regular Funds Over Direct Funds

Direct funds have lower expense ratios but need active management. Regular funds offer professional advice from a Certified Financial Planner. A CFP can help you make informed decisions and adjust investments as needed. This guidance can be invaluable for achieving your goals.

Detailed Allocation Plan

Children's Education: Invest Rs 7,000 monthly in balanced and growth-oriented mutual funds. Split the investment between the two funds. This strategy balances risk and growth.

Retirement Planning: Allocate Rs 6,000 monthly to equity mutual funds. Diversify across large-cap, mid-cap, and flexi-cap funds. This allocation leverages long-term growth potential.

House Purchase: Invest Rs 4,000 monthly in a combination of balanced and equity funds. Adjust the mix based on your time horizon.

Emergency Fund: Save Rs 2,000 monthly in liquid or short-term debt funds. Ensure easy access to funds when needed.

Travel Abroad: Set aside Rs 1,000 monthly in recurring deposits or short-term debt funds. This ensures stable returns and funds availability for trips.

Regular Review and Adjustments

Regularly review your investments. Adjust allocations based on market conditions and changes in goals. A Certified Financial Planner can provide ongoing advice and adjustments. This ensures your investments remain aligned with your goals.

Final Insights

Your diversified approach is smart. It balances growth and stability. Regular reviews and adjustments will keep your investments on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5018 Answers  |Ask -

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

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Sir i want invest Rs 6 lacs in these funds HDFC Div yield fund SBI contra Motilal midcap HDFC LArge and mid cap. Pl advise
Ans: Investment Overview
Investing Rs. 6 lakhs in a diversified portfolio is a great decision. You mentioned a few funds you are considering. Let's discuss each type.

Dividend Yield Funds
Dividend yield funds focus on companies that pay high dividends. They offer regular income and capital appreciation. These funds are less volatile than growth-oriented funds.

Advantages:

Regular income from dividends.

Potential for capital appreciation.

Disadvantages:

Limited growth potential compared to growth funds.

Dividend payments are not guaranteed.

Contra Funds
Contra funds invest in undervalued stocks that are out of favour. They have the potential for high returns.

Advantages:

Potential for high returns from undervalued stocks.

Diversification in the portfolio.

Disadvantages:

Higher risk due to investment in out-of-favour stocks.

Requires patience as it might take time to realize gains.

Midcap Funds
Midcap funds invest in medium-sized companies. They have a balance of risk and return.

Advantages:

Good growth potential.

Diversification between large and small-cap stocks.

Disadvantages:

Higher risk compared to large-cap funds.

Volatility can be higher.

Large and Midcap Funds
These funds invest in both large and mid-sized companies. They offer a balanced approach.

Advantages:

Balanced risk and return profile.

Diversification in the portfolio.

Disadvantages:

Moderate returns compared to purely large-cap or midcap funds.

May not outperform in either large-cap or midcap segments.

Evaluating Your Choices
Considering your choice of funds, a diversified portfolio is being created. Here's a breakdown of what you might expect:

Dividend Yield Fund: Provides regular income and stability.

Contra Fund: Adds potential high returns and diversification.

Midcap Fund: Offers growth potential.

Large and Midcap Fund: Balances risk and return.

Recommendations
Assess Your Risk Tolerance:

Understand your risk tolerance.

Ensure your portfolio matches your comfort with risk.

Diversify Your Portfolio:

Diversify across different types of funds.

Avoid over-concentration in one type.

Regular Monitoring:

Review your portfolio regularly.

Adjust as per market conditions.

Seek Professional Advice:

Consult a Certified Financial Planner for personalized advice.

Ensure your investments align with your financial goals.

Final Insights
Investing Rs. 6 lakhs in a diversified mix of funds can be rewarding. Your choice covers different segments of the market. This diversification can help manage risk and optimize returns. Regular monitoring and professional guidance will further enhance your investment journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5018 Answers  |Ask -

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

Asked by Anonymous - Jun 29, 2024Hindi
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I am 61yrs old i want to invest in mutualfund for a short time suggest me the best fund through which i can invest.
Ans: At 61 years old, your investment goals might include safety and liquidity. It’s vital to choose options that preserve your capital and offer reasonable returns. Short-term investments require a careful approach to avoid market volatility.

Evaluating Investment Timeframe
For short-term investments, consider the timeframe:

Less than 1 year: Choose highly liquid options.
1 to 3 years: Opt for moderate-risk funds.
Over 3 years: Consider funds with balanced risk.
Advantages of Actively Managed Funds
Actively managed funds can offer better returns compared to index funds. These funds:

Are managed by professional fund managers.
Can outperform the market with strategic decisions.
Provide flexibility in changing market conditions.
Disadvantages of Index Funds
Index funds track a specific market index, but they:

Lack active management, leading to average returns.
May not adapt to market changes quickly.
Offer less flexibility in volatile markets.
Choosing Regular Funds Through MFDs
Investing in regular funds through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) credential provides:

Professional guidance.
Regular portfolio reviews.
Tailored investment strategies.
Short-Term Investment Options
Consider these options for short-term mutual funds:

Liquid Funds: Ideal for investments up to 6 months. They invest in high-quality, short-term securities.

Ultra-Short Duration Funds: Suitable for 6 months to 1 year. They offer slightly higher returns than liquid funds.

Short Duration Funds: For 1 to 3 years, these funds invest in debt instruments with short maturities.

Benefits of Investing Through a CFP
A Certified Financial Planner can:

Assess your risk tolerance.
Help in selecting suitable funds.
Offer a comprehensive financial plan.
Provide regular performance reviews.
Mitigating Risks
Short-term investments carry minimal risk, but still consider:

Credit Risk: Ensure the fund invests in high-rated securities.

Interest Rate Risk: Choose funds with shorter durations to minimize impact.

Diversification
Spread your investment across multiple funds to:

Reduce risk.
Enhance returns.
Achieve better stability.
Tax Efficiency
Short-term mutual funds are taxed based on your income slab. Long-term capital gains (if held over 3 years) are taxed at 20% with indexation benefits.

Monitoring Your Investments
Regularly review your portfolio. Make adjustments as needed. Your CFP will provide insights on market trends and fund performance.

Final Insights
Short-term mutual fund investments can be a safe and effective way to grow your wealth. Focus on liquidity, safety, and moderate returns. Choose actively managed funds and leverage the expertise of a Certified Financial Planner for optimal results.

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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