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**Earning 1 Lakh Salary: How Best to Split and Invest Safely?**

Milind

Milind Vadjikar  |977 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Dec 04, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
ABCD Question by ABCD on Dec 04, 2024Hindi
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I'm earning salary 1 Lac. Best way to split and invest this safe and secure?

Ans: Hello;

You may invest the investible surplus of your salary into PPF, NPS (100% G option), NSCs, KVPs as safe and secure investments.

Although they don't have a default risk being GOI schemes, they have interest rate risk, low return risk.

Seek advice from an investment advisor or a certified financial planner if you need help.

Happy Investing;
X: @mars_invest
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  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 24, 2024

Asked by Anonymous - Apr 24, 2024Hindi
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I am 52 years old and want to retire now. I have about 5 crore in FD/EPF/PPF and 1 crore in stock/mf (70:30) i wouoe need 2 lac per month . Please advise where should i put money tp get 2 lac per month income
Ans: Congratulations on reaching the milestone of retirement! With your financial prudence and diligent savings, you've laid a solid foundation for this new chapter of life. Now, the focus shifts towards generating a steady income stream to sustain your lifestyle comfortably.

Given your retirement corpus of 6 crores, you're in a favorable position to achieve your income goal of 2 lakhs per month. To generate this income, a Certified Financial Planner would likely recommend a balanced approach that combines both growth and stability.

Here's a suggested strategy:

Investment Allocation: With a conservative approach in mind, consider allocating a portion of your corpus towards stable income-generating instruments such as Senior Citizen Savings Scheme (SCSS), Post Office Monthly Income Scheme (POMIS), or immediate annuity plans. These options provide regular income with relatively low risk.
Systematic Withdrawals: Utilize a systematic withdrawal plan from your FDs, EPF, and PPF to ensure a steady flow of income. You can set up monthly withdrawals that align with your income requirements while keeping the remaining corpus invested for growth.
Dividend-Paying Stocks and Mutual Funds: Allocate a portion of your equity portfolio towards dividend-paying stocks and mutual funds. This can provide a supplementary income stream while also offering the potential for capital appreciation over the long term.
Diversification: Maintain a diversified portfolio across asset classes to mitigate risk and capture opportunities for growth. Regularly review and rebalance your portfolio to ensure alignment with your income needs and risk tolerance.
Professional Advice: Consider consulting with a Certified Financial Planner who can assess your specific financial situation, goals, and risk appetite to tailor a comprehensive retirement income strategy that suits your needs.
By adopting a balanced approach and leveraging a combination of stable income sources and growth-oriented investments, you can potentially generate a sustainable income of 2 lakhs per month in retirement while safeguarding your financial security for the years ahead.

..Read more

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 05, 2024

Asked by Anonymous - Jun 05, 2024Hindi
Money
Hi dev, i earn 1,44 000 per month. I am 33 years old, Around 18000 per month my money goes into LIC jeevan labh yojana. Remaining i give around 40k to my parents as a help monthly. If i cut 10000 as monthly expenditure, how should i invest around 70k per month to get maximum returns.How should be the split.Please suggests SIPs to invest in.
Ans: Earning Rs. 1,44,000 per month is commendable. Your monthly commitments include Rs. 18,000 for LIC Jeevan Labh Yojana, Rs. 40,000 to help your parents, and Rs. 10,000 for personal expenses. After these, you have Rs. 70,000 left for investments. It's great that you’re focusing on maximizing returns. Your commitment to family is admirable and reflects a responsible mindset. Let's discuss a suitable investment strategy for you.

Understanding the Investment Landscape
Investing Rs. 70,000 monthly is substantial. We need to allocate it across various instruments to balance risk and return. Mutual funds are excellent for this purpose due to their diverse options, liquidity, and potential for high returns. Mutual funds pool money from various investors to invest in diversified portfolios. This diversification reduces risk and allows professional management.

Categorizing Mutual Funds
Mutual funds can be categorized based on the underlying assets. Here are some categories to consider:

1. Equity Funds
Equity funds invest in stocks. They can be further classified into large-cap, mid-cap, and small-cap funds based on the companies' market capitalization they invest in.

Large-Cap Funds: Invest in large, well-established companies. They are less volatile and offer steady growth.
Mid-Cap Funds: Invest in mid-sized companies with potential for high growth. They are riskier than large-cap funds but can provide higher returns.
Small-Cap Funds: Invest in smaller companies. They are the most volatile but offer the highest growth potential.
2. Debt Funds
Debt funds invest in fixed income instruments like bonds and treasury bills. They are less risky than equity funds and provide steady returns.

3. Hybrid Funds
Hybrid funds invest in a mix of equity and debt. They offer a balanced approach, providing growth potential and stability.

Splitting Your Investment
To achieve maximum returns while managing risk, a balanced allocation across different mutual fund categories is advisable. Here’s a suggested split for your Rs. 70,000 monthly investment:

Equity Funds (50% - Rs. 35,000)
Equity funds should form the bulk of your portfolio, given their high return potential. Within equity funds, diversify across large-cap, mid-cap, and small-cap funds.

Large-Cap Funds (20% - Rs. 14,000): These funds are relatively stable and provide moderate returns.
Mid-Cap Funds (15% - Rs. 10,500): These funds have a higher growth potential with moderate risk.
Small-Cap Funds (15% - Rs. 10,500): These funds are high-risk but can offer significant returns.
Debt Funds (30% - Rs. 21,000)
Debt funds provide stability and reduce overall portfolio risk. Allocate around 30% of your investment here.

Short-Term Debt Funds (15% - Rs. 10,500): These funds are less affected by interest rate changes.
Long-Term Debt Funds (15% - Rs. 10,500): These funds offer higher returns but come with interest rate risk.
Hybrid Funds (20% - Rs. 14,000)
Hybrid funds offer a balanced mix of equity and debt. They are suitable for medium-term goals and provide a cushion against market volatility.

Aggressive Hybrid Funds (10% - Rs. 7,000): These funds invest primarily in equity but have a significant debt component.
Conservative Hybrid Funds (10% - Rs. 7,000): These funds have a higher debt component, offering more stability.
Advantages of Mutual Funds
Professional Management
Mutual funds are managed by professional fund managers. They make informed decisions based on research and market analysis. This expertise can significantly enhance your returns.

Diversification
Investing in mutual funds offers diversification, spreading your investment across various assets. This reduces risk, as poor performance in one asset is balanced by better performance in another.

Liquidity
Mutual funds are highly liquid. You can buy and sell mutual fund units on any business day, providing flexibility to access your money when needed.

Compounding
Mutual funds benefit from the power of compounding. Reinvesting your returns allows your investment to grow exponentially over time.

Risk Assessment
While mutual funds offer high returns, they come with risks. Here are some key points to consider:

Market Risk
Equity funds are subject to market risk. The value of your investment can fluctuate with market conditions. However, long-term investment in equity funds usually mitigates this risk.

Interest Rate Risk
Debt funds are affected by changes in interest rates. Rising interest rates can reduce the value of existing bonds in a debt fund's portfolio. Short-term debt funds are less affected by this risk.

Credit Risk
Debt funds also face credit risk, the risk of default by issuers of the bonds they hold. Investing in high-quality debt funds can reduce this risk.

Evaluating the Disadvantages of Index Funds
While index funds are popular, they have some drawbacks compared to actively managed funds. Index funds track a specific index and cannot outperform the market. In contrast, actively managed funds aim to beat the market through strategic investments. Fund managers of actively managed funds use their expertise to select high-potential stocks, offering better returns.

Benefits of Investing Through Certified Financial Planners
Investing through a Certified Financial Planner (CFP) has advantages over direct investments. CFPs provide personalized advice based on your financial goals, risk tolerance, and investment horizon. They help you select the right mutual funds, monitor your investments, and make adjustments as needed. Their expertise ensures your investments are aligned with your financial goals.


Your disciplined approach to financial management is commendable. Allocating funds for family support and future investments shows foresight and responsibility. Your commitment to making the most of your income is inspiring and deserves appreciation.


Balancing financial obligations while planning for the future is challenging. Your efforts to secure a strong financial foundation for yourself and your family reflect a deep sense of responsibility. It's clear you care about providing for your loved ones while also striving for personal financial growth.

Final Insights
Investing Rs. 70,000 per month in a diversified portfolio of mutual funds is a smart move. By balancing equity, debt, and hybrid funds, you can maximize returns while managing risk. Remember to review your investments regularly and adjust based on performance and changing financial goals.

Your proactive approach to financial planning sets a strong example. With careful management and the right investments, you can achieve significant financial growth and security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

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Hi I have 15 lacs and need to invest which will give me steady monthly income
Ans: You have Rs. 15 lakh and seek steady monthly income. Let’s explore the best options for your needs.

Benefits of Systematic Withdrawal Plans (SWPs)
Regular Income: SWPs provide steady cash flow.
Capital Protection: Keeps your principal relatively safe.
Tax Efficiency: Better tax benefits compared to fixed deposits.
Advantages of Actively Managed Funds in SWPs
Expert Management: Funds managed by professionals.
Better Returns: Potential for higher returns compared to index funds.
Flexibility: Adjust investments based on market conditions.
Disadvantages of Direct Funds
No Guidance: Lack of professional advice.
Higher Risk: More risk due to lack of management.
Complexity: Requires significant time and knowledge.
Benefits of Investing Through MFD with CFP Credential
Expert Advice: Helps in making informed decisions.
Regular Monitoring: Keeps investments on track.
Customized Portfolio: Tailored to your goals and risk profile.
Investment Strategy for Steady Monthly Income
Step 1: Allocate Funds to a Balanced Portfolio
Equity Funds: For growth potential.
Debt Funds: For stability and lower risk.
Hybrid Funds: Combine equity and debt for balanced growth.
Step 2: Set Up Systematic Withdrawal Plan (SWP)
SWP Mechanism: Withdraw a fixed amount monthly.
Start with Small Amount: Ensure sustainability of the corpus.
Step 3: Regular Monitoring and Adjustments
Quarterly Review: Check fund performance.
Rebalance Annually: Adjust the portfolio to maintain balance.
Step 4: Tax Efficiency
Long-Term Capital Gains: Lower tax rate compared to short-term.
Tax-Free Withdrawals: Certain portions of withdrawals can be tax-free.
Estimated Monthly Income
Assuming a conservative return of 8%, you can withdraw a fixed monthly amount while keeping your principal relatively intact. This could provide a stable income stream while also potentially growing your investment.

Health and Emergency Fund
Maintain a Buffer
Emergency Fund: Keep at least 6 months of expenses.
Health Coverage: Ensure adequate insurance to cover unexpected medical expenses.
Final Insights
To achieve steady monthly income:

Invest Rs. 15 lakh in a balanced portfolio.
Use a Systematic Withdrawal Plan (SWP) for regular income.
Seek professional advice for customized planning.
Monitor and adjust your investments regularly.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 04, 2024

Asked by Anonymous - Nov 02, 2024Hindi
Money
I am 53 self employed businesses man earning 5 lakh per month with no liabilities for future so tell me 4 lakh mutula fund and 1 lakh stock per month .
Ans: I commend your steady income and clear focus on building wealth. Your high monthly surplus, with Rs. 4 lakh for mutual funds and Rs. 1 lakh for stocks, offers ample opportunities. Let’s structure a detailed plan to make the most of this.

 
 

Strategic Approach for Mutual Fund Investments
Investing Rs. 4 lakh monthly across diverse mutual funds can ensure growth and stability. With a long-term perspective, let’s target funds with varied asset classes and investment styles.

 
 

Allocation Across Fund Categories

To build a robust portfolio, balance between growth-oriented and stable funds:

 

Large-Cap Funds: Allocate about 30% of your monthly amount. Large-cap funds focus on well-established companies. They offer stability with steady growth potential.
 

Flexi-Cap Funds: Consider investing 25% here. Flexi-cap funds adjust across different market caps. They provide flexibility, helping you capture market opportunities.
 

Mid-Cap and Small-Cap Funds: Allocate 25% towards mid-cap and small-cap funds. These funds come with growth potential but carry higher risk. A mix of both can add significant value in the long term.
 

Balanced Advantage or Hybrid Funds: Assign around 20%. Hybrid funds offer a balanced approach, mixing equity and debt. This smoothens returns, reducing volatility while preserving growth.
 
 

Advantages of Regular Funds with CFP Guidance
Direct funds might appear cost-efficient. But regular funds offer unique advantages, especially when working with an MFD under CFP supervision:

 

Ongoing Guidance: Regular funds allow you to leverage expert advice. A CFP regularly reviews market conditions and rebalances as needed.
 

Efficient Portfolio Adjustments: Fund managers have the flexibility to make adjustments to protect returns. Direct funds lack this oversight.
 

This structure keeps your investments actively managed and responsive to market changes.

 
 

Disadvantages of Index Funds Compared to Actively Managed Funds
While index funds may sound appealing, they lack the dynamism of actively managed funds. Here’s why actively managed funds are better:

 

Higher Return Potential: Skilled fund managers select stocks carefully. This can lead to better returns than index funds.
 

Market Adjustments: Actively managed funds can adapt to market trends, which index funds cannot.
 

For a high-income, disciplined investor like you, the adaptability of actively managed funds adds value to your wealth-building plan.

 
 

Building a Strong Stock Portfolio
Investing Rs. 1 lakh in stocks monthly can add high growth potential. Stock selection should be based on a diversified approach, ensuring a mix of industries and types.

 

Tips for Constructing a Stock Portfolio:

 

Blue-Chip Stocks: Allocate around 40% to blue-chip stocks. These are stable, high-reputation companies with solid returns.
 

Growth Stocks: Invest about 30% here. Growth stocks represent companies with expansion potential. They may bring volatility but offer high rewards over time.
 

Dividend-Paying Stocks: Put around 20% into companies known for consistent dividends. They provide steady income and stability.
 

Sector-Specific Stocks: Dedicate around 10% to high-growth sectors. Think of sectors like technology, healthcare, or green energy.
 
 

Tax Implications and Planning
Capital gains tax rules impact mutual fund and stock returns. Being tax-efficient helps preserve more of your wealth.

 

Mutual Funds Taxation:

 

Equity Funds: Long-term gains (over Rs. 1.25 lakh) are taxed at 12.5%. Short-term gains are taxed at 20%.
 

Debt Funds: Gains are taxed according to your income tax slab for both short-term and long-term.
 

Stock Taxation:

 

LTCG (for holdings above 1 year): Gains over Rs. 1 lakh are taxed at 10%.

STCG (for holdings under 1 year): Gains are taxed at 15%.

 

Being mindful of these tax policies will help you manage redemptions and withdrawals strategically.

 
 

Regular Portfolio Review for Optimal Performance
With significant monthly contributions, annual reviews are essential. Working with a CFP ensures your portfolio stays aligned with your goals and market conditions.

 

Steps for an Effective Review:

 

Evaluate Fund Performance: Ensure your funds meet performance expectations. Switch funds if they underperform consistently.

Adjust Asset Allocation: As market conditions change, your allocation may need rebalancing. This maintains growth and manages risk.

 

Regular adjustments keep your portfolio resilient and responsive.

 
 

Benefits of SIPs for Consistent Growth
SIP investments offer many advantages, especially with your structured Rs. 4 lakh monthly approach.

 

Rupee Cost Averaging: SIPs average the purchase cost over time, reducing the impact of market volatility.

Disciplined Investment Habit: SIPs automate your investments. This discipline builds wealth consistently, avoiding the need for timing the market.

 
 

Final Insights
Your high surplus allows for a diversified, growth-oriented strategy. By investing in a balanced mix of mutual funds and a well-structured stock portfolio, you create a powerful wealth-building path. Ensure regular monitoring and use a CFP’s insights for optimal results.

 
 

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

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

..Read more

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Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 05, 2025

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Hello Sir, this is Dhiraj DM, I am 48 year's old married with no kids, we have any flat worth 1. 5 cr given on rent around 50 lakhs of equity 20 lacs mutual funds we want to retire in next 3 years,please guide. We live in a metro no liability, we r into Gifting business now want to retire in next 3 years
Ans: Your retirement is just three years away. You have built a strong foundation with real estate, equity, and mutual funds. Now, the goal is to structure your investments for steady income, security, and long-term sustainability.

1. Assessing Your Current Financial Position
Flat Worth Rs. 1.5 Crore: This generates rental income, but liquidity is limited.
Equity Portfolio of Rs. 50 Lakh: Market-linked investments with potential for high returns but volatile.
Mutual Funds of Rs. 20 Lakh: Offers diversification and moderate risk exposure.
No Liabilities: This is a strong advantage for financial freedom.
Gifting Business: If planning to exit, ensure business-related finances are sorted before retirement.
2. Estimating Post-Retirement Income Needs
Calculate expected monthly expenses, including medical, travel, lifestyle, and emergency costs.
Factor in inflation, as expenses will rise over time.
Consider long-term costs such as medical care and home maintenance.
3. Structuring Retirement Income
Rental Income as a Fixed Source
Your flat generates rental income, which helps with stability.
Consider reinvesting this income for further growth.
Portfolio Rebalancing for Stability
Equity exposure is beneficial but risky close to retirement.
Shift some funds to low-risk instruments for safety.
Keep some allocation to equity to combat inflation.
Maintaining Liquidity for Emergencies
Create an emergency fund of at least 2 years' expenses in liquid assets.
Avoid relying solely on investments that require selling in volatile markets.
4. Health and Insurance Planning
Ensure comprehensive health insurance for both of you, at least Rs. 15-20 lakh coverage.
If you hold any old insurance policies with low returns, consider restructuring them.
Create a separate healthcare fund for long-term medical expenses.
5. Tax Efficiency in Retirement
Structure withdrawals smartly to reduce tax burden on capital gains.
Use tax-free instruments where applicable.
Rental income is taxable, so deduct maintenance expenses to lower tax outgo.
6. Planning Investments for Retirement Income
Avoid complete reliance on fixed-income instruments, as they may not beat inflation.
A mix of mutual funds, debt instruments, and systematic withdrawal plans (SWP) will ensure steady cash flow.
Keep some investments growth-oriented to sustain wealth over decades.
7. Estate and Legacy Planning
Prepare a clear will to ensure smooth asset transfer.
If you plan to donate or support causes, structure funds accordingly.
Finally
Ensure liquidity and stability in your investments.
Reduce risk in equity but keep exposure for growth.
Maintain a dedicated healthcare fund and strong insurance coverage.
Structure investments to minimise taxes and ensure steady income.
Plan legacy and succession to avoid future complications.
Would you like a detailed plan on how to allocate your investments for steady retirement income?

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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