Seeking Advice: Can a Graduate with 50% in English Literature Find Part-time Work and Study Abroad?

Ans: I appreciate the clarity with which you've shared your financial picture. You are in a strong financial position, and it's great that you're looking ahead to structure a clear retirement plan and address short-term goals.

Let’s break down your situation and give you a comprehensive approach that covers all angles. This will include suggestions on your house purchase, marriage expenses, retirement planning, and investments, all tailored to help you achieve your goals.

Short-Term Goals: House Purchase and Marriage
House Purchase (3-4 Years): Rs 1.5 - 2 Crore
You have mentioned wanting to purchase a house in the next 3 to 4 years with a budget of Rs 1.5 to 2 crores. Given that this is a significant investment, here’s what I suggest:

Gradual Investment in Debt-Oriented Funds: Since the goal is relatively short-term, you should not allocate this entire sum to equity markets, as they can be volatile. You can gradually invest in debt mutual funds or balanced funds, which offer moderate returns with lower risk compared to equity. This will help your savings grow without exposing them to significant market risk.

Systematic Transfer Plans (STP): You can park your money in liquid or ultra-short-term funds initially. Over time, you can gradually transfer these funds into equity-oriented hybrid funds through an STP. This will ensure that your funds grow but with reduced exposure to market volatility. Avoid lump sum investments in equity at the moment, especially since the market is at an all-time high.

Down Payment Planning: Keep in mind that for a house purchase, you'll need to have 20-25% of the property cost ready as a down payment. You can allocate a portion of your Rs 72 lakh in savings and your Rs 2.3 crore in FDs towards this goal. However, avoid putting this entire amount in equities right away.

Marriage (1 Year): Rs 20-25 Lakhs
Since you need this amount within a year, I would suggest keeping this fund in ultra-safe investment options.

Use Short-Term Debt Funds: For such short-term goals, stick to debt-oriented mutual funds or fixed maturity plans (FMPs). These funds offer safety and predictability, ensuring that you don't lose capital while getting slightly better returns than a savings account or fixed deposit.

Liquid Funds: Another option is to park your funds in liquid mutual funds. These are relatively safer than equity mutual funds and still provide slightly better returns than a traditional savings account.

Allocate the required Rs 20-25 lakhs from your current savings and park it in one of these low-risk options. This ensures that you have the funds readily available without worrying about market movements.

Long-Term Goal: Retirement at 46 Years
Current Lifestyle and Future Expenses
You aim to retire in 10 years at the age of 46. Your current monthly expenses are Rs 1.5 lakh, which will increase due to inflation. Considering 8-9% inflation, your monthly expenses at retirement could be around Rs 3-4 lakhs.

It’s essential to create a plan that ensures you have enough to cover these expenses for at least 40-50 years post-retirement. Even though you plan to work after retirement, having a solid retirement corpus is crucial to maintaining your lifestyle.

Investment Strategy for Retirement
Continue with Equity Mutual Funds: You are already investing Rs 1.75 lakh per month in equity mutual funds through SIPs, which is a smart move. Equity investments are essential for long-term wealth creation, and the SIP route helps mitigate market volatility by averaging your costs. Continue with this strategy for the next 9-10 years to maximize the power of compounding.

Equity Allocation in Mutual Funds: Considering your goal of retiring early, it is crucial to keep a significant portion of your investments in equity. Equity mutual funds are a great way to ensure long-term growth, especially in large-cap, mid-cap, and small-cap funds. These funds have the potential to offer higher returns, but they also come with higher risk. Since you have a 10-year horizon, this risk is manageable.

Regular vs. Direct Funds: While you may come across direct funds that offer lower expense ratios, I suggest sticking with regular funds through a Certified Financial Planner (CFP). A CFP adds value with expert advice, portfolio rebalancing, and timely strategy adjustments. Direct funds lack this advisory support, which could lead to uninformed decisions during volatile market phases.

Gradually Shift to Safer Instruments Closer to Retirement: As you approach your retirement age, say 2-3 years before retirement, you should start gradually reducing your equity exposure and move toward safer debt funds or balanced hybrid funds. This ensures that your corpus is protected from market downturns just when you need it most.

Create a Withdrawal Plan: Once you retire, having a strategy for withdrawing funds from your investments is vital. You can adopt a systematic withdrawal plan (SWP) from your mutual funds, which provides you with a steady income. SWP ensures regular withdrawals while your investments continue to grow, thanks to the remaining balance in your equity funds.

Fixed Deposits and Savings Account
Concerns About Investing Lumpsum in Equity
You have a significant amount (Rs 2.30 crore in FDs and Rs 72 lakh in a savings account) that you want to move into equity mutual funds but are hesitant due to the current market highs. Your caution is valid, and I suggest the following:

Systematic Transfer Plan (STP): Instead of making a lumpsum investment, consider moving your money into a liquid fund or short-term debt fund. From there, you can initiate an STP to gradually transfer money into equity mutual funds. This will help you avoid the risk of entering the market at a high point and allows you to spread out your investments over time.

Asset Allocation: Ensure that you maintain a balanced asset allocation between equity and debt. Given your goals and risk profile, a 60:40 allocation between equity and debt may work well. The equity portion will provide the growth you need, while the debt portion will offer stability and liquidity.

Gradual Equity Exposure: Avoid rushing into equities all at once, especially when markets are at record highs. Use the STP strategy to slowly increase your equity exposure. This will allow you to take advantage of any potential corrections while still benefiting from long-term market growth.

Inflation and Life Expectancy
Your concern about inflation is valid. At 8-9% inflation, your current expenses will more than double over the next 9-10 years. Planning for a long retirement (till age 100) means that your investments must continue to grow and outpace inflation even after you stop working full-time.

Hedging Against Inflation:
Equity Investments: Equities are one of the best inflation hedges available. By maintaining a significant portion of your portfolio in equity mutual funds, you ensure that your investments grow faster than inflation over the long term.

Balanced and Hybrid Funds: For moderate risk and inflation-adjusted returns, balanced and hybrid funds provide a combination of equity and debt. This mix offers both growth and protection, making it an ideal solution for long-term retirement planning.

Healthcare and Emergency Fund: Given the long life expectancy, healthcare expenses could rise significantly. Make sure you have adequate health insurance coverage and a separate emergency fund. You should also regularly review and increase your health insurance cover to account for rising medical costs.

Action Plan for Next Steps
To summarize, here is a step-by-step plan tailored to your goals:

House Purchase: Allocate funds to short-term debt funds or FMPs and gradually build the corpus required for the down payment.

Marriage Fund: Keep Rs 20-25 lakh in liquid funds or ultra-short-term debt funds for the upcoming expense.

Equity Investments: Continue your SIPs but use STP for any lumpsum investments from your FDs or savings account to avoid market highs.

Retirement Corpus: Maintain equity exposure for the next 7-8 years, gradually shifting to safer debt instruments as you approach retirement.

Inflation Protection: Keep a strong focus on equity to hedge against inflation and ensure your corpus lasts for the long term.

Health and Emergency Fund: Ensure you have a robust health insurance plan and a liquid emergency fund for unforeseen expenses.

Finally
You are in a great financial position to achieve your goals. By taking a structured and disciplined approach, you can ensure that your retirement is financially secure, your short-term goals are met, and your investments continue to grow.

Stay focused on maintaining a balanced portfolio, and don’t let market highs or lows dictate your decisions. A long-term strategy with periodic reviews will ensure that you stay on track for a comfortable retirement and achieve all your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Dear ,

It is really disappointing for any one to have nill work experience since 2019 though I personally don't believe . Low CGP doesn't become an impediment for any one which will not allow any job or engagement for ant graduate engineer . Getting a job depends upon your sincere desire and efforts ,not entirely on your cgp. A mechnical Engineer can easily join as site incharge for any mechnical project company . Can get into Techno commercial like Sales Engineer's job in B2B companies who keep on looking for smart engineers . Even Engineering service providers like Automobile company, Industrial products mfg companies as GT then in their Production , Operations or maintenance deptt. If not any thing you can join any FMCD company in their sales & Service dept so for me you can get numerous jobs but of course you need to try for it.

Ans: The CSE (Artificial Intelligence and Machine Learning) program your son is pursuing at Techno India University, Kolkata, offers a strong future as AI and ML are rapidly growing fields.
Top recruiting companies for the AI/ML branch would include TCS, Cognizant, Accenture, Wipro, Capgemini, and HCL.

Ans: Yes, you can pursue. To get into an MSc Mathematics program at IITs, you will need to qualify in IIT JAM.

Ans: Presidency University, Bengaluru

Ans: EEE graduates from BITS Goa generally see good placement records.

Ans: Many organizations are there as listed below. For application procedures and timelines see websites.
Indian Council of Medical Research (ICMR)
Council of Scientific and Industrial Research (CSIR) - Institutes
Biotechnology Industry Research Assistance Council (BIRAC)
Department of Biotechnology (DBT) - Govt. of India
National Institute of Immunology (NII), New Delhi
etc.

Ans: He can do DS from IIT Madras. He may learn Quantum Computing, Artificial Intelligence (AI) in Physics, Nanotechnology from site like NPTEL. It's free.

Ans: Go for CSE Data Science at RNSIT (Rama Nagappa Shetty Institute of Technology)