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Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 11, 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
Asked by Anonymous - Dec 12, 2023Hindi
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I am 20 years old and i am investing 5000 rs per month through sip , but i want to increase when i have so how much should i invest per month through sip to make 50 cr easily

Ans: To reach a substantial goal like 50 crores, you'll need a strategic approach to your investments. Since you're starting early at 20, you have the advantage of time. Focus on investing consistently over the long term, increasing your SIP amount gradually as your income grows. Choose diversified equity funds that align with your risk tolerance and long-term goals. Regularly review your portfolio's performance and make adjustments as needed. With disciplined investing and patience, you can work towards achieving your ambitious financial goal. Consulting a financial advisor can provide personalized guidance tailored to your needs and goals.
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  |7101 Answers  |Ask -

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

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Sir I am already investing in sip for an amount of 15000 ..it is almost a year ...my aim is 1cr in 6 years...how much should I addon.... kindly advice
Ans: It's great to hear about your commitment to SIP investments and your ambitious goal of reaching Rs. 1 crore in 6 years. Let's delve into a comprehensive strategy to help you achieve this milestone.

Evaluating Your Current Investment Strategy
SIP Performance and Goals
Your current SIP investment of Rs. 15,000 per month is a solid start towards your financial goal. To assess your progress and plan for future additions, it's crucial to consider the following aspects:

Investment Duration: You've been investing for nearly a year, which provides a foundational period to evaluate performance.

Target Amount: Aim for Rs. 1 crore in 6 years. This equates to a compounded annual growth rate (CAGR) target that needs careful planning.

Assessing Additional Investment Requirements
Calculating Required Monthly Additions
To estimate how much more you need to invest monthly to achieve Rs. 1 crore in 6 years, consider:

Target Return: Evaluate the expected annual return from your current SIPs. Typically, equity investments aim for higher returns but carry associated risks.

Compounding Benefits: Early and regular investments benefit from compounding, enhancing growth over time.

Strategic Adjustments for Goal Achievement
Increasing SIP Contributions
To bridge the gap towards your target:

Monthly Addition: Calculate the additional monthly SIP amount required based on your current investment's performance and target timeframe.

Risk Assessment: Assess your risk tolerance. If comfortable, consider increasing SIP contributions gradually to align with your goal.

Diversification and Risk Management
Portfolio Diversification
Diversifying your investments helps manage risk and optimize returns:

Asset Allocation: Balance investments across different types of mutual funds to mitigate volatility and enhance portfolio stability.

Regular Review: Periodically review and rebalance your portfolio to align with changing market conditions and financial goals.

Long-Term Wealth Creation Strategies
Planning Beyond SIPs
While SIPs form a core part of your wealth creation strategy, explore complementary avenues:

Systematic Transfer Plans (STP): Consider transferring funds from liquid investments to equity-oriented funds systematically to benefit from market opportunities.

Tax Planning: Optimize tax-saving opportunities through eligible investments like ELSS funds within the equity segment.

Final Insights
Achieving a target of Rs. 1 crore in 6 years requires disciplined investing, regular monitoring, and strategic adjustments. With continued dedication to SIPs and prudent financial planning, you're on track to realize your financial aspirations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 13, 2024

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Dear sir Now I am 37 years old working in banking sector my monthly salary is 45 k and my wife's take home is 20 k I have one personal loan emi around 24k already I am having SIP with 2.5 k every month now I need to plan for more how much I need to invest in SIP if I want to reach 30 L in next 5 years
Ans: First, let’s appreciate your commitment to securing your financial future. Your combined monthly income is Rs. 65,000, and you already invest Rs. 2,500 monthly in a SIP. With a personal loan EMI of Rs. 24,000, your current financial situation requires careful planning.

Setting Your Financial Goal

Your goal is to accumulate Rs. 30 lakhs in the next five years. This goal is both realistic and achievable with disciplined investing. But before we determine the required SIP amount, we need to consider some factors like your current savings, expenses, and loan commitments.

Evaluating Your Current Savings and Expenses

After accounting for your EMI, you have Rs. 41,000 left. From this, we must also subtract your living expenses, existing SIP, and other financial commitments. Your disposable income after expenses will determine how much more you can invest.

Let’s assume that your monthly expenses (excluding the EMI and current SIP) are around Rs. 20,000. This leaves you with Rs. 21,000 that you can potentially allocate towards additional SIPs and other financial goals.

Calculating the SIP Required to Achieve Your Goal

Given your target of Rs. 30 lakhs in five years, you will need to invest a substantial amount monthly. To provide a rough estimate:

Current SIP: Your current Rs. 2,500 SIP is a good start, but it might not be enough to reach your goal of Rs. 30 lakhs.

Additional SIP Required: To achieve Rs. 30 lakhs in five years, you will need to invest more. Given an assumed average return rate of 12% per annum, you might need to invest around Rs. 35,000 monthly. However, the exact amount can vary based on market performance.

You can adjust the SIP amount based on your comfort and financial situation.

Balancing Loan Repayment and Investments

Balancing between loan repayment and investments is crucial. Your loan EMI is already a significant part of your income. If possible, consider prepaying part of your loan to reduce the EMI burden. This could free up more funds for SIPs.

If prepaying is not an option, focus on maintaining a healthy balance between loan repayment and investments.

Assessing the Need for Insurance

Since you have a personal loan, it’s wise to ensure you have adequate life insurance. A term insurance policy can secure your family’s financial future if something unfortunate happens. Additionally, health insurance is essential to avoid unexpected medical expenses.

Ensure your insurance coverage is adequate to protect your financial goals.

Importance of Regular Monitoring and Adjustment

Regularly monitoring your investments is key. Market conditions can change, and so can your financial situation. Reviewing your SIPs and overall financial plan annually will help you stay on track to achieve your goal.

Regular adjustments may be necessary to ensure your investments are aligned with your financial goals.

Why Actively Managed Funds Are Preferable

While index funds are popular, they may not be ideal for aggressive goals. Actively managed funds, where expert fund managers make strategic decisions, can potentially offer better returns. This can be beneficial, especially when trying to achieve a specific financial target.

Actively managed funds provide flexibility and the potential for higher returns.

Final Insights

Achieving Rs. 30 lakhs in five years is possible with disciplined investing. Consider increasing your monthly SIP, balancing it with your loan repayment, and ensuring you have adequate insurance coverage. Regular monitoring and adjustments are also crucial. With a careful approach, your financial goal can be achieved.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
T S Khurana

T S Khurana   |197 Answers  |Ask -

Tax Expert - Answered on Nov 23, 2024

Asked by Anonymous - May 11, 2024Hindi
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Can you please suggest on capital gains as per Indian taxation laws arising in the below two queries : 1) property purchased with joint ownership, me and my wife’s name in 2015 at a cost of 64,80,000, housing improvements done for the cost of 1000000 and brokerages of 200000 paid and sold the same property at 10000000 in Dec 2023? 2) 87% of the proceeds got from the deal i.e 8700000, have been reinvested to pay 25% amount in purchasing another joint ownership property in Dec 2023, 3) I have invested in another under construction property in Nov 2023 by taking housing loan, which is on me and my wife’s name worth 1.4 cr, here the primary applicant is me only while wife is just made a Co applicant in the builder buyer agreement and also on the housing loan . So what are the LTCG tax liabilities arising from the above 3 scenarios for FY 2023-2024 and FY 2024-2025. I intend to sale off the property acquired in (2) by Dec 2024 and use that proceeds to close the housing loan for the property acquired in (3), will this sale of property be inviting any tax liabilities if the complete proceeds received from the sale of the property in (2) would be utilised to close the housing loan taken in Nov 2023 for the property in (3) ? Since in FY 23-24, I would be claiming the LTCG from the sale proceeds of 1) invested in the purchase of property in 2), and I intend to sale off this property in Dec 2024, will the LTCG claim be forfeited on the property sale in (1), should I hold this property at least for further 1 year so that sale of this property in 2) will not invite STCG?
Ans: (A). Let's first talk about F/Y 2023-24 :
You jointly sold a Property during the year for Rs.76.80 lakhs (64.80+10.00+2.00), & sold the same for Rs.100.00 lakhs.
You have jointly also purchased Property No.3 (I suppose it is Residential only), for Rs.140.00 lakhs.
You should avail exemption u/s-54 & file your ITR accordingly. Please disclose all details about sale & purchase in your ITR.
02. Now coming to the F/Y 2024-25 :
You intend to Sell Property No.2, which was acquired in 2023-24. Any Gain on Sale of it would be Short Term capital Gains & taxed accordingly.
Alternatively, you may hold this sale of property no.2 (for 2 years from its purchase) & avoid STCG
You are free to utilize the sale proceeds in a way you like, including paying off your housing Loan.
Please note to avail exemption u/s 54 only from investment in property no.3 & not 2.
Most welcome for any further clarifications. Thanks.

...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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