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Ramalingam

Ramalingam Kalirajan  |7629 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 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 - May 01, 2024Hindi
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I have 200000 how invest for 10 years for retirement plan

Ans: It's wonderful that you're planning for your retirement. With Rs. 2,00,000 for a 10-year horizon, strategic allocation is vital.

Considering your timeframe, you can afford a slightly more aggressive approach, focusing on equity-oriented investments. However, it's crucial to balance risk with potential returns.

Diversification is key. Allocating funds across different asset classes like equity, debt, and possibly gold can help mitigate risks associated with market volatility.

As a Certified Financial Planner, I recommend a systematic investment approach, perhaps through SIPs, to benefit from rupee cost averaging and compounding over time.

Avoiding direct investment routes and opting for regular funds through a Certified Financial Planner can provide professional guidance and mitigate risks associated with DIY investing.

While actively managed funds may have slightly higher expenses compared to index funds, they offer the potential for better returns through active portfolio management and selection of high-quality securities.

Remember to review your portfolio periodically to ensure it aligns with your evolving financial goals and risk tolerance.

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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Asked by Anonymous - Feb 10, 2024Hindi
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Iam 62. How to invest 10 million for regular income
Ans: Investing 10 million (1 crore) for regular income at 62 requires a balance between generating income and preserving capital. Here's a general approach:

Fixed Deposits and Bonds: Allocate a portion to fixed deposits or bonds. While they offer lower returns, they provide stability and regular interest income.
Senior Citizen Savings Scheme (SCSS): This is a good avenue for regular income, especially designed for seniors, offering quarterly interest payouts.
Annuity Plans: Consider purchasing an immediate annuity plan from an insurance company. This turns your lump sum into a regular income stream.
Dividend Paying Stocks: Invest a portion in blue-chip dividend-paying stocks or mutual funds that focus on dividend yield. This can provide both capital appreciation and regular dividend income.
Debt Mutual Funds: Opt for debt mutual funds with a track record of stable returns. They offer better tax efficiency than fixed deposits if held for more than three years.
Real Estate Investment Trusts (REITs): REITs can be an option to diversify and earn rental income without the hassle of owning physical property.
Systematic Withdrawal Plans (SWP): If investing in mutual funds, opt for SWP where you can redeem a fixed amount periodically, providing a regular income while the principal remains invested.
It's crucial to diversify across these options based on your risk tolerance, income needs, and financial goals. Consulting a financial advisor can help tailor this strategy to your specific needs.

..Read more

Ramalingam

Ramalingam Kalirajan  |7629 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 2024

Asked by Anonymous - May 15, 2024Hindi
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How to invest 1500000/00 for retirement plan
Ans: Crafting a Retirement Investment Plan
Understanding Your Goal
Congratulations on taking the important step of planning for your retirement! With ?15,00,000 to invest, you're on the right track to secure your financial future.

Assessing Your Risk Profile
Before investing, it's crucial to understand your risk tolerance. Are you comfortable with higher risk for potentially higher returns, or do you prefer a more conservative approach?

Tailoring Your Investment Strategy
Equity Investments
Consider allocating a portion of your investment to equity funds. These offer the potential for high returns over the long term but come with higher volatility.

Diversified Mutual Funds
Diversified mutual funds spread your investment across various sectors, reducing risk while still providing growth opportunities.

Debt Investments
Investing in debt instruments such as bonds or fixed deposits offers stability and regular income. These are ideal for those with a lower risk tolerance.

Building a Balanced Portfolio
Asset Allocation
Distribute your investment across different asset classes to reduce risk. A balanced mix of equity and debt ensures steady growth while mitigating volatility.

Periodic Review
Regularly review your portfolio to ensure it aligns with your goals and risk tolerance. Adjustments may be needed over time to maintain balance.

Considering Tax Efficiency
Tax-Saving Investments
Explore options such as Equity Linked Savings Schemes (ELSS) or Public Provident Fund (PPF) to maximize tax benefits while saving for retirement.

Long-Term Capital Gains
Invest in instruments with favorable tax treatment on long-term gains, minimizing tax liabilities and maximizing returns.

Seeking Professional Guidance
Certified Financial Planner (CFP)
Consulting a CFP can provide personalized advice tailored to your financial situation and goals. They can help optimize your investment strategy for retirement.

Mutual Fund Distributor (MFD)
Investing through an MFD with CFP credentials ensures expert management of your portfolio, maximizing returns while minimizing risk.

Avoiding Common Pitfalls
Impulsive Decisions
Avoid making investment decisions based on emotions or short-term market fluctuations. Stay focused on your long-term goals.

Overlooking Inflation
Factor in inflation while planning for retirement. Invest in assets that offer returns above the inflation rate to maintain purchasing power.

Conclusion
Investing ?15,00,000 for retirement requires careful consideration of your risk profile, investment goals, and tax implications. By building a balanced portfolio, seeking professional guidance, and staying disciplined, you can achieve your retirement goals with confidence.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7629 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 24, 2025

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Hello, I want a monthly withdrawal of 2lakh through SWP. Give me the amounts and expect ROI for various instruments that I should use. Also what factor to consider as I would be able to invest those amount lets say after a year.
Ans: To achieve a sustainable monthly withdrawal of Rs. 2 lakh (Rs. 24 lakh annually), we need to identify the right mix of investments and expected returns. Let us create a detailed framework.

1. Factors to Consider Before Investing
Time Horizon: You plan to start investing after a year. This delay impacts your compounding benefit, but planning ahead mitigates it.

Expected Rate of Return (ROI): Different instruments offer varied returns. Diversification ensures both growth and stability.

Withdrawal Feasibility: Sustainable withdrawals depend on balancing withdrawals with corpus growth.

Inflation Impact: Investments must generate returns above inflation to preserve corpus value.

Risk Appetite: Choose instruments aligning with your comfort towards volatility.

Tax Efficiency: Optimise your withdrawals and investments for better post-tax returns.

2. Expected ROI for Investment Options
Here is the expected ROI and rationale for different asset classes:

Actively Managed Equity Mutual Funds

Allocation: 50% of the corpus
Expected ROI: 12% annually
Rationale: These funds provide high returns and help beat inflation over the long term.
Debt Mutual Funds

Allocation: 30% of the corpus
Expected ROI: 7% annually
Rationale: These offer stability with moderate returns and are suitable for regular withdrawals.
Fixed-Income Instruments (e.g., FDs, SGBs)

Allocation: 15% of the corpus
Expected ROI: 6-7.5% annually
Rationale: Secure returns with no market risk. Ideal for stability.
Liquid Mutual Funds

Allocation: 5% of the corpus
Expected ROI: 4-5% annually
Rationale: Quick access for emergencies or interim cash flow needs.
3. Corpus Required for Rs. 2 Lakh Monthly Withdrawal
Corpus Based on ROI
At 8% ROI: A corpus of Rs. 3 crore is required.
At 9% ROI: A corpus of Rs. 2.66 crore is required.
At 10% ROI: A corpus of Rs. 2.4 crore is required.
The corpus requirement reduces with higher returns but increases risk exposure.

Building the Corpus Over One Year
If the funds are idle for a year, invest them in liquid mutual funds temporarily. These yield 4-5% with low risk.
Use Systematic Transfer Plans (STPs) to gradually move funds into equity and debt over 12-18 months.
4. Investment Plan for SWP
Equity Mutual Funds (50% Allocation)
Allocate Rs. 1.5 crore to equity funds.
Delay SWP for at least three years to allow growth.
Equity funds ensure high long-term returns, reducing inflation's impact.
Debt Mutual Funds (30% Allocation)
Allocate Rs. 90 lakh to debt funds.
Start SWP immediately from this portion.
These funds provide stable returns and low volatility.
Fixed-Income Instruments (15% Allocation)
Allocate Rs. 45 lakh to secure instruments like FDs or Sovereign Gold Bonds.
Use these funds for stability and emergencies.
Liquid Mutual Funds (5% Allocation)
Allocate Rs. 15 lakh to liquid funds.
Use these funds for interim liquidity needs and to manage cash flow gaps.
5. Steps for Efficient Withdrawal
Start withdrawals from debt and liquid funds first. Let equity funds grow for 3-5 years.
Monitor returns annually to adjust the withdrawal rate or asset allocation.
Keep a buffer of 1-2 years' expenses in liquid funds for emergencies.
Review the tax efficiency of your withdrawals and rebalance your portfolio every year.
Final Insights
A well-diversified portfolio ensures stable withdrawals of Rs. 2 lakh monthly. Focus on equity for growth, debt for stability, and liquid funds for emergencies. Starting the plan early and monitoring it regularly will ensure financial independence.

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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