Home > Career > Question
Need Expert Advice?Our Gurus Can Help
Chocko

Chocko Valliappa  |237 Answers  |Ask -

Tech Entrepreneur, Educationist - Answered on May 09, 2024

Chocko Valliappa is the founder and CEO of Vee Technologies, a global IT services company; HireMee, a talent assessment and talent management start-up; and vice chairman of The Sona Group of education institutions.
A fourth-generation entrepreneur, Valliappa is a member of Confederation of Indian Industry, Nasscom, Entrepreneurs Organization and Young Presidents’ Organization.
He was honoured by the YPO with their Global Social Impact award in 2018.
An alumnus of Christ College, Bangalore, Valliappa holds a degree in textile technology and management from the South India Textile Research Association. His advanced research in the Czech Republic led to the creation of innovative polyester spinning machinery.... more
Babita Question by Babita on Apr 25, 2024Hindi
Listen
Career

Hello Sir I am name is Babita Garg.I am 38 yrs old .I am MBA with finance and marketing.I was a senior branch manger in HDFC Bank .I have banking experience of 15 yr with salary of Rs 1 lac .But due to death of my mother in law ,I have left my job before 7 months for take care of my kids and family. Now I want to do some online business flexible which I can manage as per my time availability.Can you help me some online business,so that I can earn handsome amount?

Ans: I suggest that you look at the option of getting back Banking industry to best use your experience. And engage one or more helping hands to look after children, handle kitchen etc. Online business with casual working hours at home are not likey to bring the same results as working in an office.
Career

You may like to see similar questions and answers below

Latest Questions
Ramalingam

Ramalingam Kalirajan  |2896 Answers  |Ask -

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

Asked by Anonymous - May 18, 2024Hindi
Money
I intend to retire in next 10 years. I have a daughter who is in class 2. I have a FDs and share portfolio of 35 laks, PF+Gratuity plus nps is about 50 lakhs. I am 40 years old. I own a house currently ( with housing loan o/s Rs. 27 lakh). I want a crore for my child education, and my current expenses are about 65k a month.
Ans: Planning for a Secure Retirement and Child's Education
Understanding Your Current Financial Situation
Firstly, congratulations on your proactive approach to financial planning. Your current assets include fixed deposits and a share portfolio worth ?35 lakhs, and PF, gratuity, and NPS totaling ?50 lakhs. You also own a house with an outstanding loan of ?27 lakhs. Your monthly expenses are ?65,000, and you aim to retire in the next 10 years. Additionally, you want to secure ?1 crore for your child's education.

Your dedication to planning for both your retirement and your child's future is commendable. It's not easy to balance current expenses while planning for significant future needs, and your foresight is truly impressive.

Setting Clear Financial Goals
Retirement Corpus
To retire comfortably in 10 years, you need a clear understanding of your retirement corpus requirements. This will depend on your expected expenses post-retirement, adjusted for inflation. Your current expenses are ?65,000 per month, which will likely increase over time. It is crucial to ensure that your retirement corpus can sustain these expenses for the duration of your retirement.

Child's Education Fund
You aim to accumulate ?1 crore for your child's education. This goal requires disciplined investing and leveraging the power of compounding. Considering the rising cost of education, starting early is beneficial.

Evaluating Your Current Investments
Fixed Deposits
Fixed deposits offer safety but typically provide lower returns compared to other investment options. Given your goals, it might be beneficial to diversify some of these funds into higher-yielding investments.

Share Portfolio
A share portfolio can provide significant returns, but it also comes with higher risk. Ensuring a balanced approach by diversifying across different asset classes can help mitigate risk.

PF, Gratuity, and NPS
These are excellent long-term investments providing stability and returns. They should remain a core part of your retirement planning due to their benefits and relatively lower risk.

Assessing and Managing Debt
Your housing loan of ?27 lakhs is a significant liability. Prioritizing its repayment can free up resources and reduce financial stress. However, it's essential to balance loan repayment with investment to ensure you are still on track to meet your goals.

Recommended Investment Strategy
Diversified Portfolio
Building a diversified portfolio is crucial. This includes a mix of equity, debt, and other investment options. Equity can provide higher returns, essential for your long-term goals, while debt instruments offer stability.

Systematic Investment Plan (SIP)
Investing through SIPs in mutual funds is a disciplined approach to wealth creation. It allows you to invest regularly and benefit from rupee cost averaging, which can mitigate market volatility.

Actively Managed Funds
Actively managed funds, guided by experienced fund managers, can outperform index funds over the long term. They can adapt to market conditions and potentially provide better returns. Unlike direct funds, investing through a certified financial planner (CFP) ensures you receive professional guidance tailored to your needs.

Creating a Financial Plan
Emergency Fund
Maintaining an emergency fund equivalent to 6-12 months of expenses is crucial. This fund should be easily accessible and can be kept in a liquid fund.

Child's Education
Invest in child-specific mutual funds or diversified equity funds with a long-term horizon. These investments should be geared towards achieving the ?1 crore goal for your child's education.

Retirement Corpus
Calculate the corpus needed to sustain your post-retirement expenses, adjusted for inflation. Based on this, create a mix of equity and debt investments to accumulate the required amount.

Debt Management
Aim to repay your housing loan within the next few years while balancing your investment goals. This approach ensures you reduce liabilities while still growing your wealth.

Regular Review and Adjustment
Financial planning is not a one-time activity. Regularly review your investments and goals, and make adjustments as necessary. Market conditions, personal circumstances, and financial goals can change, and your investment strategy should adapt accordingly.

Professional Guidance
Consulting a Certified Financial Planner (CFP) is invaluable. A CFP can provide personalized advice, help you navigate complex financial decisions, and ensure your investment strategy aligns with your goals.

Conclusion
You are on the right path with your current investments and clear financial goals. By diversifying your portfolio, leveraging SIPs, and seeking professional guidance, you can achieve both your retirement and child’s education goals. Balancing debt repayment with investment is crucial to ensure a secure financial future.

Embarking on this journey with discipline and regular reviews will help you stay on track. Your dedication and proactive approach are truly commendable. Let’s work together to secure your financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2896 Answers  |Ask -

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

Money
Hi Sir, I am starter & want to invest some funds in mutual funds... Pls advise how to invest it through SIP or Direct buy
Ans: Planning for a Secure Retirement and Child's Education
Understanding Your Current Financial Situation
Firstly, congratulations on your proactive approach to financial planning. Your current assets include fixed deposits and a share portfolio worth ?35 lakhs, and PF, gratuity, and NPS totaling ?50 lakhs. You also own a house with an outstanding loan of ?27 lakhs. Your monthly expenses are ?65,000, and you aim to retire in the next 10 years. Additionally, you want to secure ?1 crore for your child's education.

Your dedication to planning for both your retirement and your child's future is commendable. It's not easy to balance current expenses while planning for significant future needs, and your foresight is truly impressive.

Setting Clear Financial Goals
Retirement Corpus
To retire comfortably in 10 years, you need a clear understanding of your retirement corpus requirements. This will depend on your expected expenses post-retirement, adjusted for inflation. Your current expenses are ?65,000 per month, which will likely increase over time. It is crucial to ensure that your retirement corpus can sustain these expenses for the duration of your retirement.

Child's Education Fund
You aim to accumulate ?1 crore for your child's education. This goal requires disciplined investing and leveraging the power of compounding. Considering the rising cost of education, starting early is beneficial.

Evaluating Your Current Investments
Fixed Deposits
Fixed deposits offer safety but typically provide lower returns compared to other investment options. Given your goals, it might be beneficial to diversify some of these funds into higher-yielding investments.

Share Portfolio
A share portfolio can provide significant returns, but it also comes with higher risk. Ensuring a balanced approach by diversifying across different asset classes can help mitigate risk.

PF, Gratuity, and NPS
These are excellent long-term investments providing stability and returns. They should remain a core part of your retirement planning due to their benefits and relatively lower risk.

Assessing and Managing Debt
Your housing loan of ?27 lakhs is a significant liability. Prioritizing its repayment can free up resources and reduce financial stress. However, it's essential to balance loan repayment with investment to ensure you are still on track to meet your goals.

Recommended Investment Strategy
Diversified Portfolio
Building a diversified portfolio is crucial. This includes a mix of equity, debt, and other investment options. Equity can provide higher returns, essential for your long-term goals, while debt instruments offer stability.

Systematic Investment Plan (SIP)
Investing through SIPs in mutual funds is a disciplined approach to wealth creation. It allows you to invest regularly and benefit from rupee cost averaging, which can mitigate market volatility.

Actively Managed Funds
Actively managed funds, guided by experienced fund managers, can outperform index funds over the long term. They can adapt to market conditions and potentially provide better returns. Unlike direct funds, investing through a certified financial planner (CFP) ensures you receive professional guidance tailored to your needs.

Creating a Financial Plan
Emergency Fund
Maintaining an emergency fund equivalent to 6-12 months of expenses is crucial. This fund should be easily accessible and can be kept in a liquid fund.

Child's Education
Invest in child-specific mutual funds or diversified equity funds with a long-term horizon. These investments should be geared towards achieving the ?1 crore goal for your child's education.

Retirement Corpus
Calculate the corpus needed to sustain your post-retirement expenses, adjusted for inflation. Based on this, create a mix of equity and debt investments to accumulate the required amount.

Debt Management
Aim to repay your housing loan within the next few years while balancing your investment goals. This approach ensures you reduce liabilities while still growing your wealth.

Regular Review and Adjustment
Financial planning is not a one-time activity. Regularly review your investments and goals, and make adjustments as necessary. Market conditions, personal circumstances, and financial goals can change, and your investment strategy should adapt accordingly.

Professional Guidance
Consulting a Certified Financial Planner (CFP) is invaluable. A CFP can provide personalized advice, help you navigate complex financial decisions, and ensure your investment strategy aligns with your goals.

Conclusion
You are on the right path with your current investments and clear financial goals. By diversifying your portfolio, leveraging SIPs, and seeking professional guidance, you can achieve both your retirement and child’s education goals. Balancing debt repayment with investment is crucial to ensure a secure financial future.

Embarking on this journey with discipline and regular reviews will help you stay on track. Your dedication and proactive approach are truly commendable. Let’s work together to secure your financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2896 Answers  |Ask -

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

Listen
Money
I am planning to Invest in NFO (HDFC Manufacturing Fund). And plan to invest for 2 years the same amount. And after that every year increase by 10% to 15%. How good is this Investment plan. Please advise.
Ans: Your interest in investing in the HDFC Manufacturing Fund New Fund Offer (NFO) is commendable. It’s crucial to evaluate such investments carefully, especially when considering sectoral funds and NFOs. Let’s explore the potential downsides of NFOs and sectoral funds and understand why you might want to consider other options.

Firstly, your proactive approach to increasing your investment amount annually by 10% to 15% is excellent. This strategy reflects a commitment to growing your wealth systematically.

Understanding NFOs
Lack of Performance History
One of the primary disadvantages of investing in NFOs is the lack of a performance track record. Unlike established funds, NFOs do not have historical data to demonstrate how they perform across different market cycles. This makes it challenging to gauge their potential for future returns.

Marketing Hype
NFOs are often heavily marketed, creating a sense of urgency and excitement. However, this hype can overshadow the fund’s actual investment strategy and potential risks. Investors might get swayed by marketing campaigns without fully understanding the implications of their investment.

Initial Costs
NFOs sometimes come with initial costs, such as entry loads, which can eat into your returns. Established funds often have lower expense ratios and no entry loads, making them more cost-effective in the long run.

Disadvantages of Sectoral Funds
High Risk and Volatility
Sectoral funds, like the HDFC Manufacturing Fund, focus on a specific industry. This concentration can lead to high risk and volatility. If the manufacturing sector faces a downturn, your entire investment could be adversely affected. Diversification is limited, increasing the impact of sector-specific risks.

Lack of Diversification
Sectoral funds do not offer the broad diversification found in multi-cap or flexi-cap funds. Investing heavily in one sector means your portfolio is not protected against risks in that particular sector. Diversified funds spread investments across various sectors, reducing overall risk.

Economic Cycles Impact
Sectoral funds are highly sensitive to economic cycles. The manufacturing sector, for example, can be significantly affected by economic downturns, changes in government policies, and global market conditions. This sensitivity can lead to unpredictable returns.

Evaluating Your Investment Strategy
Investment Horizon
Given your plan to invest for two years and then increase your investment annually, it’s essential to align your strategy with your financial goals and risk tolerance. Sectoral funds are generally more suitable for experienced investors with a higher risk appetite and a longer investment horizon.

Consider Diversified Funds
Instead of sectoral funds, consider investing in diversified equity funds. These funds spread your investment across various sectors and companies, providing better risk management and potentially more stable returns. Diversified funds can include large-cap, mid-cap, and small-cap stocks, offering a balanced approach.

Professional Guidance
Seek advice from a Certified Financial Planner (CFP) to ensure your investment strategy aligns with your long-term financial goals. A CFP can provide personalized recommendations based on your risk profile and investment objectives.

Conclusion
Investing in NFOs and sectoral funds comes with significant risks due to the lack of performance history, high volatility, and limited diversification. Instead, consider diversified equity funds for a more balanced and stable investment approach. Your proactive strategy of increasing investment annually is commendable, and with the right guidance, you can achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2896 Answers  |Ask -

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

Listen
Money
hi Sir, I want to investment in mutual funds through SIP or direct. pls advise
Ans: Your interest in mutual funds for systematic investment plans (SIPs) is a smart move towards financial stability. Let's explore the benefits of regular funds and the drawbacks of direct funds to help you make an informed decision.

Firstly, I commend you for taking proactive steps towards managing your finances. Your willingness to seek advice demonstrates a commitment to long-term financial success.

Benefits of Regular Funds
Professional Guidance
Regular funds offer the advantage of professional guidance from a Certified Financial Planner (CFP). This expertise can be invaluable in selecting the right funds tailored to your financial goals and risk tolerance.

Regular Monitoring
Investing through regular funds ensures your portfolio is regularly monitored and rebalanced by professionals. This helps in adapting to market changes and optimizing returns.

Simplified Process
With regular funds, the investment process is simplified. A CFP helps manage documentation, track performance, and make necessary adjustments, saving you time and effort.

Tailored Advice
A CFP provides tailored advice based on your financial situation and goals. This personalized approach helps in selecting the best funds and strategies for your specific needs.

Drawbacks of Direct Funds
Lack of Professional Guidance
Investing in direct funds means managing your investments without professional help. This can be challenging, especially if you lack financial expertise or time to monitor your investments closely.

Increased Risk
Without professional guidance, the risk of making uninformed decisions increases. This can lead to poor fund selection, inadequate diversification, and suboptimal returns.

Complexity
Managing direct funds requires a good understanding of market trends, fund performance, and economic indicators. This complexity can be overwhelming and may result in missed opportunities or mistakes.

Time-Consuming
Monitoring and rebalancing your portfolio in direct funds can be time-consuming. Without professional support, you must stay updated on market developments and make timely decisions.

Evaluating Your Options
Regular SIPs
By opting for regular SIPs, you benefit from professional management, regular monitoring, and personalized advice. This helps in building a diversified portfolio aligned with your financial goals.

Active Management
Actively managed funds, typically offered through regular investments, aim to outperform the market. A professional fund manager makes strategic decisions to maximize returns, offering an advantage over passive index funds.

Cost Consideration
While regular funds may have slightly higher fees than direct funds, the benefits of professional management, expert advice, and peace of mind often outweigh the costs.

Conclusion
Investing through regular mutual funds offers numerous advantages, including professional guidance, regular monitoring, and tailored advice. The drawbacks of direct funds, such as lack of guidance and increased complexity, highlight the value of regular investments managed by a Certified Financial Planner.

I encourage you to consider these benefits and make an informed decision that aligns with your financial goals. Your proactive approach and willingness to seek advice are commendable steps towards achieving financial success.

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x