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Harsh

Harsh Bharwani  |70 Answers  |Ask -

Entrepreneurship Expert - Answered on Oct 19, 2023

Harsh Bharwani is a fourth generation entrepreneur.
As CEO and managing director, he leads the international business and employability initiatives at the computer networking institute, Jetking Infotrain Limited.
After graduating from Delhi University, Bharwani joined the family business in 2010 and set up operations in the US and Vietnam.
He has trained over three lakh students in employability, confidence and key life skills.... more
HARISH Question by HARISH on Jul 20, 2023Hindi
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sir This is Harish from bangalore, I am planning to take franchisee of 12 years old tourist and travels Agency. which is doing confirmed departure service. please suggest is it fine to take it. and please share your view on tourism business

Ans: Regulations and Licensing: Familiarize yourself with the legal and regulatory requirements for operating a travel agency in your area. Ensure you have the necessary licenses and permits.

Industry Trends: Stay updated on the latest trends in the travel and tourism industry. Factors such as changing consumer preferences, travel restrictions, and global events can have a significant impact on your business.

Marketing and Promotion: Consider how you will market and promote your franchise. Effective marketing strategies can help attract customers and build a loyal client base.

Financial Investment: Calculate the initial investment required to start the franchise and ensure you have adequate capital to cover startup costs and sustain the business until it becomes profitable.

Training and Support: Verify the training and ongoing support provided by the franchisor. Proper training can help you run the business more efficiently.

Regarding the tourism business in general, it can be a rewarding industry with several advantages:

Diverse Customer Base: Tourism caters to a wide range of travelers, including leisure tourists, business travelers, and adventure seekers, providing opportunities for various niche markets.

Seasonal Opportunities: Depending on your location, you may have seasonal peaks in tourism, allowing you to maximize revenue during peak seasons.

Travel Trends: As people increasingly prioritize experiences and travel, there is potential for growth in the industry.

International Exposure: The tourism industry can provide exposure to international markets, allowing you to work with travelers from around the world.

However, it's important to be aware of the challenges in the tourism industry, such as:

Seasonal Variability: Many tourism businesses experience fluctuations in demand based on seasons or external factors like weather conditions or economic downturns.

Competition: The tourism industry is highly competitive, and you'll need effective marketing strategies to stand out.

Regulatory Compliance: Navigating regulations and compliance requirements in the travel industry can be complex.

External Factors: The industry can be susceptible to external factors like natural disasters, political instability, or health crises, which can impact travel patterns.

In conclusion, taking a franchise of an established travel agency can be a viable business opportunity, but it requires careful planning, due diligence, and a strong understanding of the tourism industry. Assess your own skills, resources, and commitment before making a decision, and seek professional advice if needed to ensure you make an informed choice.
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Ramalingam

Ramalingam Kalirajan  |7628 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 24, 2025

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Hello, I want a monthly withdrawal of 2lakh through SWP. Give me the amounts and expect ROI for various instruments that I should use. Also what factor to consider as I would be able to invest those amount lets say after a year.
Ans: To achieve a sustainable monthly withdrawal of Rs. 2 lakh (Rs. 24 lakh annually), we need to identify the right mix of investments and expected returns. Let us create a detailed framework.

1. Factors to Consider Before Investing
Time Horizon: You plan to start investing after a year. This delay impacts your compounding benefit, but planning ahead mitigates it.

Expected Rate of Return (ROI): Different instruments offer varied returns. Diversification ensures both growth and stability.

Withdrawal Feasibility: Sustainable withdrawals depend on balancing withdrawals with corpus growth.

Inflation Impact: Investments must generate returns above inflation to preserve corpus value.

Risk Appetite: Choose instruments aligning with your comfort towards volatility.

Tax Efficiency: Optimise your withdrawals and investments for better post-tax returns.

2. Expected ROI for Investment Options
Here is the expected ROI and rationale for different asset classes:

Actively Managed Equity Mutual Funds

Allocation: 50% of the corpus
Expected ROI: 12% annually
Rationale: These funds provide high returns and help beat inflation over the long term.
Debt Mutual Funds

Allocation: 30% of the corpus
Expected ROI: 7% annually
Rationale: These offer stability with moderate returns and are suitable for regular withdrawals.
Fixed-Income Instruments (e.g., FDs, SGBs)

Allocation: 15% of the corpus
Expected ROI: 6-7.5% annually
Rationale: Secure returns with no market risk. Ideal for stability.
Liquid Mutual Funds

Allocation: 5% of the corpus
Expected ROI: 4-5% annually
Rationale: Quick access for emergencies or interim cash flow needs.
3. Corpus Required for Rs. 2 Lakh Monthly Withdrawal
Corpus Based on ROI
At 8% ROI: A corpus of Rs. 3 crore is required.
At 9% ROI: A corpus of Rs. 2.66 crore is required.
At 10% ROI: A corpus of Rs. 2.4 crore is required.
The corpus requirement reduces with higher returns but increases risk exposure.

Building the Corpus Over One Year
If the funds are idle for a year, invest them in liquid mutual funds temporarily. These yield 4-5% with low risk.
Use Systematic Transfer Plans (STPs) to gradually move funds into equity and debt over 12-18 months.
4. Investment Plan for SWP
Equity Mutual Funds (50% Allocation)
Allocate Rs. 1.5 crore to equity funds.
Delay SWP for at least three years to allow growth.
Equity funds ensure high long-term returns, reducing inflation's impact.
Debt Mutual Funds (30% Allocation)
Allocate Rs. 90 lakh to debt funds.
Start SWP immediately from this portion.
These funds provide stable returns and low volatility.
Fixed-Income Instruments (15% Allocation)
Allocate Rs. 45 lakh to secure instruments like FDs or Sovereign Gold Bonds.
Use these funds for stability and emergencies.
Liquid Mutual Funds (5% Allocation)
Allocate Rs. 15 lakh to liquid funds.
Use these funds for interim liquidity needs and to manage cash flow gaps.
5. Steps for Efficient Withdrawal
Start withdrawals from debt and liquid funds first. Let equity funds grow for 3-5 years.
Monitor returns annually to adjust the withdrawal rate or asset allocation.
Keep a buffer of 1-2 years' expenses in liquid funds for emergencies.
Review the tax efficiency of your withdrawals and rebalance your portfolio every year.
Final Insights
A well-diversified portfolio ensures stable withdrawals of Rs. 2 lakh monthly. Focus on equity for growth, debt for stability, and liquid funds for emergencies. Starting the plan early and monitoring it regularly will ensure financial independence.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...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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