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Jobless at 46 with Rs.26 Lakhs: How Can I Generate Monthly Income?

Ramalingam

Ramalingam Kalirajan  |6993 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 02, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Raji Question by Raji on Jul 20, 2024Hindi
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Hi I'm 46 I have savings 26 lacks & iam jobless suggest me to get monthly income by investing

Ans: Current Financial Overview
Age: 46 years

Job Status: Unemployed

Savings: Rs 26 lakhs

Financial Goals
Objective: Generate a monthly income through investments
Investment Strategy
Assessing Current Savings
Savings: Rs 26 lakhs

Make the right use of your savings to generate regular income.
Diversify your investments to strike a balance between risk and return.
Creating a Monthly Income
Systematic Withdrawal Plan (SWP):

A systematic withdrawal plan provides for periodical returns from your mutual fund investments.
It provides for regular monthly income.
It is always advisable to opt for actively managed funds for better returns.
On the other hand, avoid index funds because of lower returns and lack of flexibility. Debt Mutual Funds:

Invest a proportion in debt mutual funds for stability. They give comparatively better returns than fixed deposits. Such funds are good for regular income generation with low levels of risk. Balanced Funds:

Invest in balanced funds as they mix equity and debt. They will give growth and stability. Engage a Certified Financial Planner for choosing the funds. Monthly Income Plans (MIPs):

Consider the MIPs, which focus more on generating regular income.
They primarily invest in debt with an exposure to equity as well.
They provide higher returns compared with bank savings accounts
Senior Citizen Savings Scheme:
If eligible, invest in SCSS as the returns from this scheme are safe and regular.
The interest rate is higher compared to other savings
Post Office Monthly Income Scheme:
POMIS schemes should be considered if you want returns that come as a guaranteed monthly income.
It is a safe and secure way of earnings for regular income.
Risk Management
Diversification of Investments:

Invest in a mix of assets classes.
This lowers risk and also guarantees steady returns. Emergency Fund:

Keep an emergency fund which is equivalent to 6-12 months of expenses. Store this in a liquid fund or even a savings account for easy access. Regular Monitoring:

Keep a check on your investment portfolio regularly. Bring changes in your investments as per the market conditions and your needs. Disadvantages of Index Funds Limited Flexibility:

Index funds strictly follow the market index. They cannot alter with the changing market at all. Lower Returns:

These funds can be easily surpassed by the actively managed funds.
A professional fund manager can grab better opportunities for returns.
No Professional Management:

Index funds are not actively managed.
Active funds have professionals making investment decisions for them.
Benefits of Investing Through a CFP
Expert Advice:

A CFP offers customized investment advice.
They assist in selecting the right fund and managing associated risks.
Regular Monitoring:

A CFP continuously monitors your investment portfolio and makes changes as required.
This ensures you achieve your financial goals.
Tax Efficiency:

A CFP advises on tax-saving investment options.
They ensure maximum returns with minimum tax liabilities.
Finally
Generate Regular Income: Generate a regular income stream from your savings.

Diversification of Investments: Diversify across various assets.

Professional Advice: Engage a CFP for custom-made advice.

Review Regularly: Get into the habit of continuous monitoring and reviewing the portfolio.

From the above plan, you will have financial independence and be able to generate regular income.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |6993 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 01, 2024

Asked by Anonymous - Jun 01, 2024Hindi
Money
Helo sir I'm 28 rights now and I have 6 lac liability my monthly income 30k sir plz suggest me a way for investment and short term earning
Ans: Understanding Your Financial Situation
You're doing well by seeking financial advice at 28. Your monthly income of Rs. 30,000 is a good starting point. A liability of Rs. 6 lakhs can seem daunting, but with the right strategy, you can manage it effectively.

Setting Financial Goals
First, let's define your financial goals. Short-term goals could include clearing your Rs. 6 lakhs liability. Long-term goals might involve savings for retirement or a house.

Budgeting Your Income
Create a budget to manage your Rs. 30,000 monthly income. Allocate funds for essential expenses like rent, groceries, and utilities. Ensure you save a portion of your income each month.

Clearing Your Liability
Prioritise clearing your Rs. 6 lakhs liability. High-interest debt can hinder financial progress. Aim to pay more than the minimum amount due each month to reduce the principal faster.

Emergency Fund
Establish an emergency fund. Aim to save at least three to six months' worth of expenses. This fund will act as a safety net during unexpected financial situations.

Investment Options for Short-Term Earnings
For short-term earnings, consider options that offer liquidity and low risk. Fixed deposits and savings accounts with good interest rates are stable choices. These provide moderate returns with low risk.

Actively Managed Funds
Investing in actively managed funds can be beneficial. These funds are managed by experts who aim to outperform the market. They might offer higher returns compared to index funds, which only track the market.

Regular Funds with Certified Financial Planner
Consider regular funds managed through a Certified Financial Planner (CFP). CFPs provide professional guidance and tailored advice, ensuring your investments align with your financial goals.

Diversifying Investments
Diversify your investments to reduce risk. Don't put all your money into one type of investment. Consider a mix of debt and equity funds to balance risk and return.

Short-Term Investment Strategies
For short-term goals, focus on investments that mature in a few years. Look for options with low volatility and stable returns. These investments will help you meet your immediate financial needs.

Regular Review and Adjustment
Regularly review and adjust your investment portfolio. Market conditions change, and your financial goals might evolve. Ensure your investments remain aligned with your objectives.

Benefits of Professional Guidance
Working with a Certified Financial Planner can provide significant benefits. They offer expertise, personalised advice, and help navigate complex financial decisions. Their guidance ensures your investments are well-structured.

Building a Financial Plan
Develop a comprehensive financial plan. Include your income, expenses, liabilities, and investment goals. A well-structured plan will guide your financial decisions and keep you on track.

Importance of Discipline
Financial discipline is key to success. Stick to your budget, avoid unnecessary expenses, and consistently invest. Discipline ensures steady progress towards your financial goals.

Learning and Growing
Educate yourself about personal finance and investment options. Knowledge empowers you to make informed decisions. Stay updated on financial trends and market conditions.

Benefits of Diversification
Diversifying your investments spreads risk. By investing in various assets, you protect yourself from market volatility. A diversified portfolio offers stability and potential for growth.

Evaluating Risk Tolerance
Understand your risk tolerance before investing. Some investments carry higher risk but offer higher returns. Align your investment choices with your comfort level and financial goals.

Tax Implications
Consider the tax implications of your investments. Different investment options have varying tax treatments. Aim to minimise tax liability while maximising returns.

Long-Term Financial Goals
While focusing on short-term goals, keep long-term objectives in mind. Retirement planning should start early. Consistent investments over time will build a substantial corpus for the future.

Balancing Life and Finances
Achieve a balance between enjoying life and managing finances. Allocate funds for leisure and personal growth. A balanced approach ensures financial well-being and personal satisfaction.

Seeking Professional Advice
Consulting a Certified Financial Planner can provide clarity and direction. Their expertise helps navigate financial complexities. Professional advice ensures your financial journey is smooth and successful.

Conclusion
You're on the right track by seeking financial advice at a young age. With a structured plan, disciplined approach, and professional guidance, you can achieve financial stability and growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6993 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 02, 2024

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Hello Sir my age 40 till now i am not having any savings my monthly salary 15000/- can you help me out for investing
Ans: Financial Assessment

Your monthly salary is Rs. 15,000.
You have no savings at age 40.
Starting to save now is very important.

Budgeting

Make a list of all your monthly expenses.
Find areas where you can cut back.
Try to save at least 10% of your income.

Emergency Fund

Start building an emergency fund first.
Aim for 3-6 months of expenses.
Keep this money in a savings account.

Insurance

Get a term life insurance policy.
Health insurance is also very important.
These protect your family from financial troubles.

Small Savings

Start with small, regular savings.
Even Rs. 500-1000 per month can make a difference.
Increase the amount as your income grows.

Investment Options

Mutual funds can be good for long-term growth.
Start with balanced or conservative funds.
Seek guidance from a Certified Financial Planner.

Retirement Planning

It's not too late to start planning for retirement.
Even small amounts invested regularly can grow over time.
Consider PPF or NPS for tax benefits.

Skill Enhancement

Look for ways to increase your income.
Learn new skills that can help you earn more.
This can help you save and invest more.

Debt Management

Avoid taking high-interest loans.
If you have debts, make a plan to pay them off.
Clearing debts is as important as saving.

Regular Review

Check your budget and savings every month.
Adjust your plan as your situation changes.
Stay committed to your financial goals.

Finally

It's great that you want to start saving.
Be patient and consistent with your efforts.
Small steps now can lead to big results later.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |6993 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 08, 2024

Money
Hello Sir, I am now 45+ now and investing through sip since last 5 yrs in 1) 3k in sbi small cap, 2) 4k in axis small cap, 3) 3k in nippon small cap, 4) 4k in mirea asset emerging bluechip, 5) 6k in hdfc mid cap, 6) 4k in kotak flexi cap, 7) 6k in parag parikh flexi cap, 8) 4k in icici pru value discovery. Risk high and tenure 15-20 yrs for asset allocation. Sir is it necessary to change any fund?
Ans: you have built a diverse SIP portfolio with various equity funds. Your disciplined investment over the last five years shows commitment to wealth building. With a high-risk tolerance and a long-term goal of 15-20 years, let’s take an in-depth look at your fund choices. I’ll provide insights to help you optimise this portfolio further.

Strengths of Your Current Portfolio
Good Diversification: Your portfolio includes funds from small-cap, mid-cap, flexi-cap, and value categories. This spread across segments is a strong approach to capture growth across the market.

Discipline in SIPs: Regular SIP contributions show a systematic approach that will help in rupee-cost averaging. It’s a proven method for long-term investors like you.

High-Risk Appetite: You are investing with a long horizon and high risk tolerance. This aligns well with your fund choices, especially in high-risk categories like small-cap and mid-cap.

Reviewing Small-Cap Fund Exposure
Current Allocation: Your portfolio allocates Rs 10,000 per month to small-cap funds. These funds often offer high growth potential but also come with significant volatility.

Growth Potential: Small-cap funds are beneficial in long-term portfolios due to their high potential for growth. Over 15-20 years, they can contribute significantly to wealth creation.

Suggested Changes: With three small-cap funds, there may be a lot of overlap. You might consider consolidating into one or two well-performing small-cap funds. This will simplify tracking and reduce redundancy.

Examining Mid-Cap and Flexi-Cap Fund Allocation
Mid-Cap Fund Benefits: Mid-cap funds bring a blend of growth and moderate stability. Your allocation here balances the aggressive small-cap investments.

Flexi-Cap Fund Role: Flexi-cap funds invest across large-, mid-, and small-cap stocks. This flexibility allows these funds to adjust according to market conditions, adding a layer of adaptability to your portfolio.

Suggested Changes: Your portfolio has multiple flexi-cap funds, which can lead to overlapping investments. It may be beneficial to reduce your holdings to one high-performing flexi-cap fund for better portfolio efficiency.

Value-Oriented Fund’s Contribution
Role in Stability: The value fund in your portfolio targets undervalued stocks, which tend to be more resilient in market downturns. This can provide balance and act as a buffer against volatility.

Long-Term Benefits: A value-oriented fund adds stability, which is essential as your portfolio matures. The approach of investing in undervalued companies often pays off well over time.

Suggested Changes: Keep this fund as it provides a different investment strategy, enhancing overall diversification.

Importance of Actively Managed Funds Over Index Funds
Higher Potential Returns: Actively managed funds can outperform index funds by selecting high-potential stocks and avoiding weaker sectors.

Limitations of Index Funds: Index funds track the market and have limited potential for excess returns. They cannot adjust to economic shifts like active funds can.

Benefit of Advisor Guidance: Regular funds managed with the help of a Certified Financial Planner (CFP) add value. A CFP can guide you on fund selection and rebalancing, which index funds do not offer.

Advantages of Investing Through a Certified Financial Planner
Personalized Advice: A CFP can help you fine-tune your portfolio to better match your goals, risk profile, and timeline. Direct funds lack this support, making regular funds a better choice for most investors.

Portfolio Monitoring: Regular funds with CFP assistance offer ongoing review and monitoring. This is important for a long-term investment strategy.

Support for Future Adjustments: Market conditions and personal goals evolve over time. Having a CFP ensures you have guidance to adjust your investments accordingly.

Tax Implications on Your Equity Mutual Funds
Equity Mutual Fund Taxation: Long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20%.

Tax-Efficient Withdrawals: Consider planning your withdrawals in a tax-efficient way. For a long-term horizon, tax efficiency will contribute significantly to your net returns.

Impact of New Tax Rules: Understanding tax implications can help you plan more efficiently for your post-retirement withdrawals, minimising tax impact on your returns.

Recommendations for Portfolio Optimization
Reduce Fund Overlap: Your portfolio has multiple funds in similar categories. Streamlining these will make the portfolio easier to manage and reduce redundancies.

Consider Asset Rebalancing: Review your portfolio’s asset allocation every two to three years. As you near retirement, adding some low-risk debt or balanced funds could provide stability without sacrificing growth.

Explore the Benefits of Balanced Funds: Over time, a small allocation to balanced funds could help mitigate volatility as you approach retirement age. These funds offer a mix of debt and equity, which balances risk and growth.

Final Insights
Your disciplined approach to SIPs and fund selection shows a strong foundation for future growth. Simplifying your fund categories and reducing overlap can improve efficiency and returns. Working closely with a CFP will ensure that your portfolio remains aligned with your goals over time, providing you with the guidance needed for adjustments as markets evolve.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |6993 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 08, 2024

Money
Sir please review my mutual fund sip portfolio * Axis Mid Cap Fund - Direct Growth = 1000 * ICICI Prudential BHARAT 22 FOF - Direct Plan = 1000 * Mirae Asset Emerging Bluechip Fund - Direct Plan = 1000 * Parag Parikh Flexi Cap Fund - Direct Plan = 1000 * quant Small Cap Fund - Direct Plan Growth = 1000 * SBI Small Cap Fund Direct Growth = 2000 * SBI PSU direct plan growth = 1000 My age is 27 . Looking a long term investment with higher return. Shall I continue this portfolio or any changes required? Kindly give your valuable suggestions . Thank you
Ans: Your portfolio looks well-constructed, with a strong foundation in mid-cap, small-cap, and flexi-cap funds. Each fund you've chosen reflects a strategic approach for growth. Let's evaluate each category and make any necessary suggestions to ensure you achieve the best potential returns over the long term.

Overview of Your Current Portfolio
You’ve diversified well across categories, with each fund serving a unique role. Let’s analyze the strengths and potential improvements in each area of your portfolio.

Mid-Cap Funds
Mid-cap funds, like the one in your portfolio, focus on companies with substantial growth potential but higher risk compared to large-cap companies. Over the long term, these funds often outperform due to their growth-focused nature.

However, consider monitoring this fund periodically. Mid-cap stocks can face higher volatility, which may impact returns if held solely without re-evaluation.

Small-Cap Funds
Small-cap funds are growth-oriented, targeting smaller companies with significant room for expansion. You’ve allocated well to this category, focusing on funds with robust track records.

Due to their volatile nature, however, they can experience sharp swings. A Certified Financial Planner can offer guidance to rebalance if necessary, which could enhance returns and help you avoid undue risk over the long term.

Flexi-Cap Funds
Flexi-cap funds have the flexibility to invest across large, mid, and small-cap companies, making them versatile. This allocation ensures that you have exposure to high-growth stocks while benefiting from the stability of large-cap stocks.

This type of fund aligns well with your long-term goal as it can balance risk across market cycles. Continue with this allocation for stable yet high-growth potential.

Sectoral Funds (Public Sector & PSU Funds)
Sectoral funds focused on PSUs add a thematic angle to your portfolio, providing exposure to government-linked companies. Such funds may perform well during economic growth phases or government-led initiatives but might also experience phases of underperformance.

For long-term investors like you, relying heavily on sectoral funds can add cyclical risk. A diversified equity fund may offer higher long-term growth with less risk than sector-specific investments.

Evaluation of Direct Fund Plans
Sir, investing through direct plans saves on expense ratios, which may seem beneficial at first. However, there are significant drawbacks:

Lack of Advisory Support: Direct plans don't offer professional guidance. Over time, tracking and rebalancing become crucial, and a Certified Financial Planner (CFP) with an MFD (Mutual Fund Distributor) credential ensures optimal management.

Market Cycles and Rebalancing: Without expert oversight, you could miss critical adjustments during volatile market phases, affecting returns. A CFP helps in such rebalancing for better performance.

Tax Implications and Withdrawals: Selling or withdrawing from mutual funds, especially equity funds, incurs tax. Long-term capital gains (LTCG) on equity mutual funds are taxed at 12.5% for gains above Rs 1.25 lakh, while short-term gains (STCG) incur 20%. A regular plan with an MFD provides ongoing tax-efficient strategies.

Opting for regular plans via an MFD with a CFP credential will enable you to maximize returns while accessing insights that make a difference long term.

Suggested Modifications for Higher Returns and Stability
Focus on Balanced Funds Over Sectoral Exposure

To limit risks tied to sectoral funds, consider allocating a portion to balanced or diversified funds. These funds balance equity with stable instruments like debt, reducing volatility and sustaining growth.

Revisit Small and Mid-Cap Allocations

With multiple small-cap and mid-cap funds, consider focusing on one fund in each category. Over-diversification in these can dilute returns and increase tracking requirements. A strategic reallocation could yield more focused, consistent growth.

Consider SIP Step-Up for Long-Term Compounding

An annual SIP step-up, even a small amount, could enhance long-term wealth creation significantly. This adjustment boosts your corpus over time and aligns with your long-term goal of maximizing returns.

Seek Guidance from a Certified Financial Planner

Having a CFP manage your portfolio brings personalized insight into market trends, rebalancing, and tax-efficient strategies. A CFP ensures you capitalize on growth while maintaining balance and tax efficiency.

Key Benefits of Actively Managed Funds Over Index Funds
Sir, I noticed you are not invested in index funds, which is beneficial for your growth objective. Actively managed funds outperform index funds, especially in dynamic market conditions. Here’s why:

Higher Returns Potential: Actively managed funds provide the flexibility to capitalize on changing market opportunities, which index funds lack due to their passive structure.

Adaptive Strategy: Fund managers of actively managed funds adjust to market shifts, providing growth and safety in a fluctuating market.

Downside Protection: During bear markets, actively managed funds can adjust exposure, while index funds simply follow the market downturn. Active management can minimize losses, giving a steadier performance over time.

Final Insights
Sir, you have built a promising portfolio with well-selected funds across categories. A few modifications could ensure a more balanced, growth-oriented, and tax-efficient portfolio. The following adjustments will help you achieve higher returns with sustained stability:

Consider balanced or diversified funds for steadier growth.

Limit mid-cap and small-cap fund overlaps to reduce portfolio complexity.

Use the expertise of a CFP to handle rebalancing, tax efficiency, and market cycle adaptations.

Continue focusing on actively managed funds over index funds, as these provide better long-term value.

Through these steps, you can optimize your portfolio for maximum growth and stability, setting a strong foundation for your long-term investment goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Anu

Anu Krishna  |1287 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 08, 2024

Asked by Anonymous - Nov 07, 2024Hindi
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Relationship
Hi Anu Mam Im 27 yrs old ( married) and 10 yrs old daughter. Im seperated from my husband since 2 yrs due to several reasons like he is drinking and Totally addicted to it. And he is totally dependent and now today also roaming on the roads of some streets of hyd. I belongs to an orthdox family. Now the question is one backward caste man who is married age : 33 he is interested in me and proposed me to a marriage after knowing all my past and saying that he accepts my child too. And the thing is he said a lie to me at first that he is unmarried and even though i had a good impression on him about the way he behaves with me he even treat me in a very polite manner. He says he loves me even though i too had a good impression but the things are the castes and can we both settle down with a marriage can we be happy or he is only trying to convince me to get him a wife to care care of him or only for his parents, he always talks about his own sister and also the office colleagues calls them sister and get emotional about them those who left the office. And he cries a lot which i dont trust on him and the face i see him that was not an real cry that looks like an act which i dont like in him. May he is acting ? Or really loving me, ge cares alot i feel like he is over reacting
Ans: Dear Anonymous,
If you are in doubt, then it's highly likely that he is putting on an act. Go with your intuition and hey hey, you said that he is married and so are you...You do realize that you just can't go ahead and marry while you are already to other people, right?
Focus on what's happening in your life; you obviously have to do something about it...Other relationships can wait!

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...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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