Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Nikunj

Nikunj Saraf  |308 Answers  |Ask -

Mutual Funds Expert - Answered on Nov 14, 2022

Nikunj Saraf has more than five years of experience in financial markets and offers advice about mutual funds. He is vice president at Choice Wealth, a financial institution that offers broking, insurance, loans and government advisory services. Saraf, who is a member of the Institute Of Chartered Accountants of India, has a strong base in financial markets and wealth management.... more
Mahesh Question by Mahesh on Nov 14, 2022Hindi
Listen
Money

I am 24 years old. I would like to create approx Rs 5 cr wealth in next 12 years. Kindly advice how much I will require to invest?I have just started SIPs in following funds (2 months back.)

1. Mirae Asset Large Cap - Rs.2000/- pm
2. Parag Parekh Flexicap - Rs. 2000/-pm

Would like to invest another Rs.7000/pm in SIP. Kindly suggest funds.

Also I will start investing Rs.1.5 lakh in PPF and Rs.50,000/- yearly in NPS effective 01.04.2023.

Ans: Hi Mahesh. It would be a wise idea to reconsider your investment in Parag Parikh AMC. You can start a monthly investment of 1.07 Lakh to create wealth of 5 crores within 12 years with expected return 14% CAGR. In your current vision, you intend to start with a sip of 11k. Hence, I suggest investing in mid, small, large& midcap categories. You may also refer to the following funds for your portfolio creation-

  • Quant Flexi cap Fund
  • Canara Robeco Emerging Equities Fund
  • Nippon India Growth Fund
  • SBI Small Cap Fund
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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 2024

Asked by Anonymous - Apr 14, 2024Hindi
Listen
Money
Hi I am 42 currently I did SIP of 20k from last 3 years each 1. ELSS each 1k are 1.Axis long term equity 2.mirai asset 3.canara robeco 3.invesco India 4.parag parikh 2.Midcap funds - White Ock 1k 2.Invesco India multi cap fund 1k 3. Thematic fund - 1 Franklin India apportunity fund 5k 4. Multi asset allocation fund - Tata multi asset opp fund 5k 5. Flexi cap fund - 1.kotak multi asset allocator 1k 2.HDFC flexi cap fund 1k 6. Dynamic Asset allocator - Edelweiss balanced Adv 1k 7. Large & Mid cap - Axis growth apportunity fund 1k 8. Small cap fund - Nippon India 1k Suggest me I want invest another 5k
Ans: It's great to see your diversified investment approach through SIPs across various mutual fund categories. Considering your existing portfolio, here's a suggestion for investing an additional 5k:

Given your current allocation, you might want to consider adding to a category where you have relatively lower exposure. Since you already have investments in ELSS, Midcap, Thematic, Multi-Asset Allocation, Flexi Cap, Dynamic Asset Allocator, Large & Mid Cap, and Small Cap funds, you may consider adding to a fund category that complements your existing holdings.

Considering your investment style and the current market scenario, you might want to explore investing in a Balanced Advantage Fund or a Hybrid Equity-Oriented Fund. These funds dynamically allocate between equity and debt instruments based on market conditions, providing a balance of growth potential and downside protection.

Here's a suggested addition to your portfolio:

Balanced Advantage Fund: Invest the additional 5k in a reputable Balanced Advantage Fund that has a proven track record of managing market volatility and delivering consistent returns over the long term.
Ensure you research and select a fund that aligns with your risk tolerance, investment goals, and overall portfolio strategy. Additionally, regularly review your portfolio's performance and make adjustments as necessary to stay on track with your financial objectives.

Always remember to consult with a certified financial planner or investment advisor before making any significant changes to your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Moneywize

Moneywize   |181 Answers  |Ask -

Financial Planner - Answered on Aug 27, 2024

Asked by Anonymous - Aug 25, 2024Hindi
Listen
Money
I have SIPs in following funds (all are direct equity growth fund): 1. HDFC Large and Mid Cap fund -- 8000 2. UTI Fifty Nifty 50 Index -- 8000 3. Motial Oswal Midcap -- 6000 4. Quant Mid Cap -- 6000 5. Nippon India Small Cap -- 10000 6. HDFC Flexi Cap -- 6000 7. Parag Parikh Flexi Cap -- 6000 8. HDFC Balanced Advantage Fund -- 6000 9. ICICI Prudential Multi Asset -- 6000 10. Mirae Asset Large and Mid-Cap 15000 Please let me know the health of my portfolio and please suggest how I can create a fund of Rs 2 crore in the next 12-15 years.
Ans: Analysing Your Investment Portfolio

Overall, your portfolio seems well-diversified across different market caps and fund types. This is a good strategy to manage risk and potentially capture returns from various market segments.

However, there are a few points to consider:

• Overlapping Funds: Some of your funds, especially the flexi cap and large and mid-cap funds, may have overlapping holdings. This might introduce some redundancy in your portfolio.
• Number of Funds: While diversification is important, having too many funds can make it difficult to track and manage your investments. Consider consolidating some funds if possible.
• Risk Tolerance: Ensure that your allocation to small-cap funds aligns with your risk tolerance. Small-cap stocks can be more volatile than large-cap stocks.

Creating a Rs 2 Crore Corpus in 12-15 Years

To achieve your goal of creating a Rs 2 crore corpus in 12-15 years, you'll need to increase your monthly SIP amount or consider other investment options.

Here are some strategies:

• Increase Monthly SIP: If you can afford to increase your monthly SIP amount, that's the most straightforward way to accelerate your goal.
• Consider Lump Sum Investments: If you have any surplus funds, consider making lump sum investments in addition to your SIPs.
• Rebalance Regularly: Review your portfolio periodically and rebalance to ensure it aligns with your risk tolerance and investment goals.
• Explore Other Investment Options: While equity mutual funds are a great way to build wealth, you might also consider other investment options like real estate or alternative investments, depending on your risk tolerance and financial goals.

Increasing Your Monthly SIP:

• Calculate the Required Increase: To determine how much you need to increase your monthly SIP, you can use online financial calculators or consult with a financial advisor. Factors like your current investment amount, expected annual returns, and investment horizon will be considered.
• Assess Your Financial Situation: Evaluate your income, expenses, and savings to determine if increasing your SIP is feasible. Consider setting aside a portion of any salary increases or bonuses for investment.

Making Lump Sum Investments:

• Identify Surplus Funds: Look for any unused funds, such as emergency savings, or one-time windfalls like bonuses or inheritance.
• Consider Market Conditions: While lump sum investments can be a powerful way to accelerate wealth creation, it's important to be mindful of market conditions. Investing when markets are volatile can be risky.

Rebalancing Your Portfolio:

• Determine Rebalancing Frequency: Decide how often you want to review and rebalance your portfolio. This could be quarterly, semi-annually, or annually.
• Use a Systematic Approach: Implement a systematic rebalancing strategy to ensure your asset allocation remains consistent with your risk tolerance and investment goals.

Exploring Other Investment Options:

• Real Estate: Consider investing in real estate through direct property ownership or real estate investment trusts (REITs).
• Alternative Investments: Explore other alternative investments like private equity, venture capital, or hedge funds, but be aware of the associated risks and potential illiquidity.

Remember:

• Consult a Financial Advisor: A financial advisor can provide personalized guidance based on your specific circumstances and help you create a comprehensive investment plan.
• Stay Informed: Keep yourself updated on market trends, economic indicators, and changes in tax laws that could affect your investments.
• Be Patient: Building wealth takes time and discipline. Avoid making impulsive decisions based on short-term market fluctuations.

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 03, 2025

Listen
Money
Dear Sir, I am 47 years old IT professional. My current salary is 1.5 lakhs per month. I have a daughter who just completed her 10th board exam. My corpus is around 1.6Cr FD&PPF; 30 lakhs in MF & stocks; 50 lakhs in EPF. I have no debt and living in my own house. Please suggest if I can plan for retirement
Ans: Your financial position is strong, and planning for retirement at 47 is a smart decision. Below is a detailed 360-degree approach to assess whether you can retire comfortably and how to ensure financial security.

Understanding Your Current Financial Position
Income: Rs 1.5 lakh per month.

Corpus:

Rs 1.6 crore in Fixed Deposits (FD) and Public Provident Fund (PPF).

Rs 30 lakh in mutual funds and stocks.

Rs 50 lakh in Employees' Provident Fund (EPF).

Liabilities: No debts.

Assets: Own house, ensuring no rent or EMI burden.

Family Responsibility:

Daughter has just completed the 10th board exam.

Higher education expenses need to be planned.

Key Considerations Before Retirement
Expected Retirement Age

If you plan to retire early (before 55), corpus sustainability needs careful assessment.

If you work till 60, it will provide a larger financial cushion.

Post-Retirement Expenses

Living expenses, healthcare, travel, and lifestyle costs must be considered.

Inflation will increase future expenses.

Daughter’s Education

Higher education costs are significant.

Corpus should cover both education and retirement without compromise.

Medical Expenses

Health costs increase with age.

A high health insurance cover is essential.

Wealth Growth vs. Safety

A mix of equity and debt investments ensures growth while preserving capital.

Excessive reliance on FDs and PPF may limit long-term wealth accumulation.

Assessing If You Can Retire Comfortably
Current Corpus Size

Rs 2.4 crore (excluding house) is a strong starting point.

But, inflation will reduce its real value over time.

Expected Corpus Growth

Investments in mutual funds and stocks should continue to grow.

PPF and EPF offer stable but lower returns.

Withdrawals Post-Retirement

Sustainable withdrawals should not deplete the corpus too soon.

A balanced investment strategy is required.

Gaps in Planning

Heavy reliance on FDs and PPF may not be ideal.

More equity exposure can ensure inflation-beating returns.

Steps to Strengthen Your Retirement Plan
1. Optimising Investment Strategy
Continue investing in mutual funds with a mix of large-cap, mid-cap, and flexi-cap funds.

Reduce dependence on FDs for long-term needs.

Equity mutual funds help counter inflation and grow wealth.

Avoid index funds as they provide average returns without active management.

Regular funds through a Certified Financial Planner (CFP) offer expert monitoring.

Diversify investments between equity, debt, and fixed-income products.

2. Planning for Daughter’s Education
Higher education costs can be Rs 30-50 lakh in the next 5-7 years.

Separate this goal from your retirement plan.

Increase equity investment to build an education corpus.

Avoid withdrawing from retirement savings for education.

3. Building a Healthcare Safety Net
Health insurance should cover at least Rs 30-50 lakh.

Consider super top-up plans for additional coverage.

Maintain an emergency medical fund to cover non-insured expenses.

Review insurance policies periodically.

4. Creating a Sustainable Withdrawal Plan
Avoid withdrawing a large portion of the corpus in early retirement years.

Keep at least 5 years of expenses in liquid assets.

Equity exposure should reduce gradually as retirement progresses.

Use dividends and interest income before selling assets.

Final Insights
Retirement is possible, but adjustments are needed for long-term security.

Continue investing aggressively for the next few years.

Ensure daughter's education is planned separately.

Review investments and insurance regularly.

Keep flexibility in withdrawal strategy post-retirement.

A structured plan will ensure a financially secure and comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 03, 2025

Asked by Anonymous - Apr 03, 2025Hindi
Listen
Money
My employer offers a salary sacrifice scheme for pension contributions, but I don't fully understand how it works. What are the potential advantages and disadvantages of joining such a scheme, and how does it affect my take-home pay and long-term financial planning?
Ans: A salary sacrifice scheme for pension contributions allows you to give up a portion of your salary in exchange for increased employer contributions to your pension. It has tax and National Insurance (NI) advantages but also some potential drawbacks.

How Salary Sacrifice for Pension Works
You agree to reduce your gross salary by a chosen amount.

Your employer contributes this amount directly to your pension.

Since your taxable salary is lower, you pay less income tax and NI.

Your employer also saves on NI and may pass on some or all of this saving to your pension.

Advantages
1. Tax and NI Savings
You don’t pay income tax or NI on the sacrificed amount.

Your employer saves on NI (currently 13.8%) and may increase your pension with these savings.

2. Higher Pension Contributions
Since more money goes into your pension, your retirement corpus grows faster.

Compounding over time enhances long-term wealth.

3. Increased Take-Home Pay
Although you sacrifice part of your salary, the NI savings may offset some of the reduction.

Depending on employer policies, your net pay may not drop significantly.

4. Potential Employer Matching
Some employers pass their NI savings into your pension, increasing your total contributions.

Disadvantages
1. Reduced Gross Salary
A lower salary means reduced future pay rises if they are percentage-based.

Life cover, sick pay, and redundancy pay linked to salary may be affected.

2. Lower Borrowing Capacity
Mortgage applications consider salary; a lower reported income might reduce borrowing potential.

3. Impact on State Benefits
If salary drops below certain thresholds, statutory benefits like maternity pay and state pension could be affected.

4. Restricted Access to Pension
The extra pension savings cannot be accessed before retirement (except under specific conditions).

Effect on Take-Home Pay
Your net pay will be slightly lower, but less than the actual amount sacrificed.

The tax and NI savings cushion the impact.

If your employer adds their NI savings, your total retirement savings increase.

Effect on Long-Term Financial Planning
Your pension fund grows faster, improving retirement security.

Short-term disposable income is slightly reduced, so budget planning is important.

Consider how the reduced salary affects other financial goals like buying a house or saving for education.

Should You Opt for It?
If employer NI savings are passed to your pension, it’s highly beneficial.

If you are close to lower tax bands or state benefit thresholds, assess the impact.

If you plan to apply for a mortgage, check how it affects your eligibility.

A Certified Financial Planner (CFP) can help assess your personal situation before making a decision.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 03, 2025

Asked by Anonymous - Apr 03, 2025Hindi
Listen
Money
Hi Sir , Greetings of the day!! hope you are doing well !! I want to do a savings of 50 lacs in as much less time span as possible because I want to buy a property in Gurgaon. My monthly salary is 1 lac 11k and I am currently investing 10k in mutual fund monthly and 50k in nps yearly. Can you please guide me how can I save 50 lacs and in how much time ?
Ans: Your goal of saving Rs 50 lakh for a property in Gurgaon is ambitious but achievable with the right strategy. Below is a structured approach to help you reach your target in the shortest possible time.

Understanding Your Current Financial Position
Your monthly salary is Rs 1.11 lakh.

You invest Rs 10,000 per month in mutual funds.

Your annual NPS contribution is Rs 50,000.

You haven't mentioned any liabilities or existing savings. If you have any ongoing EMIs or debts, they should be factored in.

Key Considerations for Achieving Rs 50 Lakh Target
The speed of reaching Rs 50 lakh depends on savings rate and returns.

High savings rate is the most reliable way to accumulate wealth.

Investment returns are uncertain and depend on market conditions.

A balanced approach is necessary to ensure stability and growth.

Increasing Your Savings Rate
Currently, you are investing Rs 10,000 per month.

If you can increase it to Rs 50,000 per month, you will reach Rs 50 lakh faster.

Cutting discretionary expenses will free up more money for investments.

Consider reducing unnecessary spending on dining out, luxury items, and vacations.

Redirect bonuses, incentives, or salary hikes towards savings.

Choosing the Right Investment Instruments
Mutual Funds for Growth
Actively managed equity mutual funds can generate better returns than fixed deposits.

A mix of large-cap, mid-cap, and small-cap funds can balance risk and reward.

Mid-cap and small-cap funds have higher growth potential but also higher volatility.

Avoid index funds as they provide average returns and lack active risk management.

Debt Investments for Stability
Fixed deposits, debt mutual funds, and PPF provide stability.

These should be used for short-term parking rather than long-term growth.

Debt mutual funds are taxed based on your income tax slab.

Avoid locking too much money in low-return instruments.

Balancing Risk and Return
Investing entirely in equity mutual funds can generate high returns but comes with volatility.

A mix of 80% equity and 20% debt can provide stability.

As your target nears, shift more funds towards safer instruments.

Avoid speculation and high-risk investments like cryptocurrency.

Role of NPS in Your Goal
NPS is good for retirement but not ideal for short-term goals.

Partial withdrawal is allowed only under specific conditions.

Do not rely on NPS for your property purchase.

Managing Tax Efficiency
Equity mutual fund LTCG above Rs 1.25 lakh is taxed at 12.5%.

Short-term capital gains (STCG) are taxed at 20%.

Debt mutual fund gains are taxed as per your income slab.

Investing in tax-efficient instruments will maximize returns.

Estimating the Timeframe
If you invest Rs 50,000 per month, you can accumulate Rs 50 lakh in about 7-8 years with moderate returns.

If you invest Rs 75,000 per month, you can reach Rs 50 lakh in about 5 years.

The faster you increase your savings, the sooner you will achieve your goal.

Final Insights
Increase your monthly investment to at least Rs 50,000.

Focus on actively managed equity mutual funds.

Keep a small portion in debt for stability.

Avoid unnecessary expenses and invest salary increments.

Do not depend on NPS for this goal.

Monitor and adjust your portfolio as needed.

Stay disciplined and patient to achieve your target.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Dr Dipankar

Dr Dipankar Dutta  |1092 Answers  |Ask -

Tech Careers and Skill Development Expert - Answered on Apr 03, 2025

Dr Dipankar

Dr Dipankar Dutta  |1092 Answers  |Ask -

Tech Careers and Skill Development Expert - Answered on Apr 03, 2025

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x