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Nikunj Saraf  | Answer  |Ask -

Mutual Funds Expert - Answered on Nov 29, 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
Kirti Question by Kirti on Nov 29, 2022Hindi
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I am 27 years old and had started investing in MFs and other instruments for retirement from last year. I currently invest in the following:

1. Axis Bluechip- 4000

2. Canara Robeco Equity tax saver- 3000

3. HDFC Index Nifty 50- 5000

4. Parag Parikh Flexicap- 3000

5. Axis Small cap- 4000

6. Quant Absolute- 2750 

7. Tata Digital India Fund- 2200

8. ICICI Prudential nasdaq 100 Index Fund- 3000

9. PPF- 1.5 lakh annually 

10. NPS- 50 k annually 

Please advice whether I should discard, change or add any funds to my portfolio. I want to plan for an early retirement at the age of 40 and aiming for a corpus of 5 crore. Please advice on the monthly sip amount to achieve the same and appropriate funds. Thank you! 

Ans: Hi Kirti. I would advice few changes in your portfolio; reconsider your schemes in Axis and Parag Parikh AMC. To achieve a corpus of 5 Cr till your early retirement age, you may increase the sip to 1.13 lakh. Try adding your sip annually if 1.13 lakh aren’t possible.

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  |7220 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 11, 2024

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I am 42 years salaried person investing in MF through SIP from 2014 current corpus is 37 Lakhs in MF. My Current SIP's amount is rs 22000 PM as follows- 1. Nippon Small cap - 2000, 2. Mahindra manulife midcap fund - 7000, Mahindra Manulife Small cap - 4000, PGIM Midcap opportunities Fund - 3000, Quant Flexicap fund - 6000. SIP increasing every year by 5% to 10% No Home loan, term insurance 55 lakhs, medi-claim 10 lakhs, PF & VPF accumulation Rs 16 lakhs. I want to create a good corpus of Rs 6 - 7crore for retirement at 58 years of age. Please suggest if any change required in investment amount or funds.
Ans: It's commendable that you've been consistently investing in mutual funds through SIPs for several years, laying a strong foundation for your retirement. Let's evaluate your current investment strategy and make adjustments to align with your retirement goal.

Your portfolio reflects a diversified mix of small-cap, mid-cap, and flexi-cap funds, which offer growth potential over the long term. However, given your goal of building a substantial corpus for retirement, we may need to reassess your asset allocation and make some adjustments.

Firstly, let's review your SIP amounts and consider increasing them gradually to accelerate wealth accumulation. Since your SIPs increase by 5% to 10% annually, this incremental growth can boost your investment corpus significantly over time.

Consider reallocating some of your SIP amounts to funds with a proven track record of consistent performance and lower volatility. While small-cap and mid-cap funds can offer higher returns, they also come with increased risk. Diversifying across large-cap funds or balanced funds can provide stability to your portfolio.

Moreover, review your overall asset allocation to ensure it remains aligned with your risk tolerance and investment objectives. While equity investments offer growth potential, it's essential to balance them with fixed-income securities like debt funds or PPF to mitigate risk.

Given your age and retirement horizon, periodically reassess your investment strategy and make necessary adjustments to stay on track towards your goal. Consider consulting with a Certified Financial Planner to develop a personalized retirement plan tailored to your needs and aspirations.

In conclusion, by fine-tuning your investment strategy, increasing your SIP amounts, and maintaining a disciplined approach, you can work towards achieving your retirement goal of building a corpus of Rs 6 - 7 crores by the age of 58.

Best Regards,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |7220 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 10, 2024

Asked by Anonymous - Oct 09, 2024Hindi
Money
I am 43 Years Old and have started MF SIP in the following 05 Funds, ICICI Bluechip Fund 10K, HDFC Felxi Cap - 10K, HDFC - Nifty 50 Fund 10K, TATA Small Cap 10k & Tata Mid cap growth k, Total 50k SIP, the objective is to accumulate corpus for my retirement at age 60. Please advise if the portfolio..Thanks
Ans: Your existing portfolio comprises a mix of large-cap, flexi-cap, small-cap, and mid-cap mutual funds. The objective you have outlined is to accumulate a retirement corpus by age 60, which is commendable.

The combination of different categories of funds in your portfolio indicates a balanced approach. You are ensuring exposure to both large-cap stability and the high growth potential of mid-cap and small-cap segments. However, there are certain areas that could use refinement to maximize your long-term returns, especially considering your goal of retirement.

Let’s break down the elements of your portfolio.

Large-Cap Fund Allocation
Large-cap funds typically invest in well-established companies with a strong market presence. They offer stability and moderate returns, particularly in volatile markets. In your portfolio, Rs. 10,000 is allocated to large-cap funds.

Benefits of large-cap funds:

Provides a cushion during market downturns.
Typically less volatile compared to mid and small-cap funds.
Potential concerns:

Growth potential is limited compared to mid and small-cap funds.
Over time, returns may lag behind other aggressive investments.
Given your long investment horizon of 17 years, while large-cap funds add stability, relying too much on them may limit your growth. A review of your exposure after every 3-5 years is suggested.

Flexi-Cap Fund Allocation
Flexi-cap funds give fund managers the freedom to invest across market capitalizations (large, mid, and small caps). Your allocation of Rs. 10,000 here is a good move because it offers diversification and reduces risk by spreading investments across companies of varying sizes.

Benefits of flexi-cap funds:

Flexibility to navigate across market caps, based on market conditions.
Potential to capture higher growth in mid and small caps while maintaining large-cap stability.
Potential concerns:

Performance is highly dependent on the fund manager’s expertise.
Not immune to market risks during extreme volatility.
Your flexi-cap exposure is solid, but it should be evaluated periodically to ensure it’s aligned with your evolving risk tolerance.

Small-Cap and Mid-Cap Fund Allocation
Small-cap and mid-cap funds, with a total allocation of Rs. 20,000 in your portfolio, are aimed at high-growth potential. These funds can significantly boost your returns over the long term.

Benefits of small and mid-cap funds:

Higher growth potential compared to large-cap funds.
Suitable for long-term investors who can weather short-term volatility.
Potential concerns:

Higher volatility and risk.
Performance can be erratic during market downturns.
Given your long-term horizon, the inclusion of small-cap and mid-cap funds is a positive. However, these funds should be monitored closely. You may want to reduce exposure to them as you near retirement and opt for more stable investments.

Nifty 50 Fund Allocation
Though you mentioned an investment in a Nifty 50-based fund, it is crucial to understand that index funds, including Nifty 50 funds, are passively managed. This means they replicate the index and offer no scope for the fund manager’s expertise to outperform the market.

Drawbacks of index funds:

They follow the market and do not aim to outperform.
In volatile or bearish markets, they offer no downside protection.
Actively managed funds can provide better risk-adjusted returns over the long term.
Given these disadvantages, actively managed funds in the same category may offer more growth potential and better risk management. Consider reallocating some portion of this investment towards actively managed funds for improved performance.

Regular Funds vs. Direct Funds
Investing in regular funds through a Certified Financial Planner (CFP) is a wise decision. While direct funds might seem attractive due to lower expense ratios, regular funds offer several advantages.

Benefits of regular funds:

You get ongoing professional advice and portfolio reviews from a CFP.
A CFP can help in strategic fund selection, rebalancing, and tax planning.
The marginally higher expense ratio is justified by better service and support.
Disadvantages of direct funds:

Lack of personalized guidance and strategy.
Risk of making uninformed investment decisions.
More time-consuming, as you have to track and manage everything on your own.
In the long run, investing in regular funds through a Certified Financial Planner will likely lead to better returns and effective risk management.

Tax Considerations
It's important to keep in mind the tax implications of mutual fund investments. Here’s a brief overview based on the latest rules:

Long-term capital gains (LTCG) from equity mutual funds exceeding Rs. 1.25 lakh are taxed at 12.5%.
Short-term capital gains (STCG) are taxed at 20% for equity mutual funds.
You should plan your withdrawals or systematic withdrawal plans (SWP) closer to retirement to minimize tax liabilities. A CFP can guide you on when to redeem units to maximize tax efficiency.

Review and Monitoring
Mutual funds require periodic reviews. You should evaluate your portfolio every 2-3 years to ensure it aligns with your risk tolerance, financial goals, and market conditions. A Certified Financial Planner can help you reassess your investments and suggest necessary adjustments to keep you on track for retirement.

Key aspects to review:

Fund performance relative to peers.
Sectoral allocation to avoid over-concentration.
Rebalancing across market capitalizations based on market cycles.
Risk and Reward Balance
Your current portfolio shows a balanced approach between stability (large and flexi-cap funds) and growth (small and mid-cap funds). However, small and mid-cap funds can be volatile, and their allocation should be adjusted as you get closer to retirement. As you reach your 50s, shifting towards more conservative options, such as large-cap or balanced funds, would reduce risk without sacrificing too much on returns.

Inflation and Retirement
Given that you aim to retire at 60, it's important to account for inflation. Your retirement corpus needs to be sufficient to maintain your lifestyle in the face of rising prices.

Consider the following:

Increase your SIP contributions periodically to combat inflation.
Keep some portion of your retirement portfolio in growth-oriented funds even post-retirement to counter inflation.
Emergency Fund and Insurance
Since your focus is on retirement, ensure you have an adequate emergency fund. This will protect your investments from any unexpected expenses and avoid unnecessary withdrawals. A general guideline is to have 6-12 months of expenses in liquid assets or savings accounts.

Also, check your insurance coverage. If you don’t have a pure term insurance plan, it's advisable to get one to protect your family from any unforeseen financial burdens. Health insurance is equally crucial to avoid dipping into your retirement funds during medical emergencies.

Final Insights
Your current SIP portfolio is well-rounded and has a mix of stability and growth potential. However, it’s important to:

Reassess your Nifty 50 fund and consider shifting towards actively managed large-cap funds.
Regularly review your portfolio with a Certified Financial Planner to adjust your allocations based on market conditions and your retirement goals.
Ensure you have an adequate emergency fund and the necessary insurance coverage to safeguard your retirement savings.
Remember, consistency and periodic reviews will ensure you meet your retirement goals effectively while minimizing risks.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7220 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 07, 2024

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Sir, I had booked a property in 2016 and made a payment of approx Rs. 27,00,000/- through savings and home loan availed. Since the property is not yet delivered, I have asked for refund and the builder is ready to make the payment of approx Rs. 30,00,000/-. This amount includes the EMI and interest payment made upto 2021 wherein I had closed the loan availed. Kindly advise as to 1) whether I will have to pay any tax? 2) whether I can transfer the amount to my spouse 3) whether I will be subjected to any Income Tax payment or otherwise
Ans: The refund you receive is considered a capital transaction. Whether it is taxable depends on specific factors. Below is a detailed analysis:

1. Taxability of Refund Received
Principal Amount Paid:
The principal amount refunded is not taxable. This is because it is your own money returned.

Interest Paid by the Builder:
Any interest or additional amount refunded is taxable. It will be considered "Income from Other Sources."

Loan EMIs Paid:
Refund of EMIs made towards loan repayment may include interest and principal components. The interest portion refunded could be taxable as per tax rules.

Cost Indexation Benefit:
Since you booked the property for investment, any capital gain or loss may apply. This depends on how the tax department views the refund transaction.

2. Possibility of Transferring the Amount to Your Spouse
Gifting to Spouse:
You can transfer the amount to your spouse without immediate tax implications. Gifts to a spouse are exempt under the Income Tax Act.

Clubbed Income Rule:
However, if your spouse invests this amount and earns income, it will be clubbed with your taxable income. You will have to pay tax on the income generated from such investments.

Using a Joint Account:
Alternatively, consider using a joint account for better transparency and tracking of funds.

Steps for Managing Tax Liability
Evaluate Refund Break-Up
Ask the builder for a detailed breakup of the refund amount.
This should include the principal amount, interest, and EMI refund details.
Tax on Interest Component
The interest portion will be taxed under "Income from Other Sources."
Include this amount while filing your income tax return (ITR).
Utilise Capital Gains Exemptions (If Applicable)
If the refund amount results in capital gains, you can reinvest in certain tax-saving bonds under Section 54EC.
Alternatively, reinvesting in another residential property could provide tax exemption under Section 54F.
Keep Documentation Ready
Maintain all records of payments made to the builder and the refund received.
This will be helpful in case of any scrutiny or queries from the Income Tax Department.
Recommendations for the Refund Amount
Do Not Invest Entirely in Fixed Deposits
Fixed deposits offer low returns, which may not beat inflation in the long term.
Consider growth-oriented investments like mutual funds for better returns.
Explore Mutual Funds for Better Returns
Invest part of the amount in diversified mutual funds for wealth creation.
Actively managed funds outperform passive options over the long term.
Consult a Certified Financial Planner to align investments with your goals.
Maintain Liquidity for Immediate Needs
Keep a portion of the refund in a liquid or short-term debt fund.
This ensures funds are readily available for short-term needs.
Final Insights
The principal portion of the refund is not taxable.
Interest and EMI refunds may attract tax under specific conditions.
Transferring the amount to your spouse is possible but involves clubbing rules.
Diversify investments into mutual funds for long-term benefits.
Maintain proper documentation to handle tax implications smoothly.
Seek personalised guidance from a Certified Financial Planner to optimise the utilisation of this refund.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7220 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 07, 2024

Money
I am 30 yr old what if I invest a lumpsum amount in nifty 50 Index fund in every deep for 15yrs. Suggest me Is this a right or wrong the advantages or disadvantages.
Ans: Your decision to invest in a Nifty 50 Index Fund is worth analysing. While the idea sounds simple, there are important considerations to ensure this approach aligns with your financial goals.

Advantages of Investing in a Nifty 50 Index Fund
1. Simplicity in Investing

Index funds are easy to understand and invest in.
They replicate the performance of the Nifty 50 index.
2. Low Expense Ratio

Index funds have lower management costs compared to actively managed funds.
These savings add up over time, improving net returns.
3. Diversification Across Top Companies

Investing in a Nifty 50 fund gives exposure to 50 large-cap companies.
These companies are leaders across various industries.
4. Long-Term Growth Potential

Historically, the Nifty 50 has delivered inflation-beating returns over the long term.
Staying invested for 15 years allows you to benefit from compounding.
5. Market Transparency

Index funds are transparent.
You can track the portfolio as it mirrors the Nifty 50.
6. Consistency in Performance

Nifty 50 funds are less volatile than mid- or small-cap funds.
This makes them more suitable for risk-averse investors.
Disadvantages of Relying Solely on Nifty 50 Index Fund
1. Lack of Flexibility

Index funds only follow the market.
They cannot outperform the index as actively managed funds aim to do.
2. No Downside Protection

Index funds do not have risk management strategies during market downturns.
Your investment will fall as much as the index does.
3. Dependence on Market Conditions

Nifty 50 performance depends heavily on market trends and economic conditions.
Prolonged market stagnation can delay your financial goals.
4. Concentration Risk

The Nifty 50 index has a high weightage to a few sectors like IT and finance.
This may lead to limited diversification benefits.
5. Tax Implications

Long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%.
Short-term gains are taxed at 20%.
Why Consider Actively Managed Funds?
1. Better Returns Potential

Active fund managers aim to outperform the index.
This gives you an edge during market highs and lows.
2. Tailored Portfolio Allocation

Actively managed funds adjust to market conditions.
This helps reduce risks during downturns.
3. Diversification Beyond Large-Caps

Active funds provide exposure to mid- and small-cap companies.
This enhances overall portfolio returns.
4. Tax Efficiency with Professional Guidance

Investments made through a Certified Financial Planner and mutual fund distributors (MFDs) ensure better tax optimisation.
MFDs help identify funds with high potential for growth and lower tax burdens.
Suggested Strategy for 15-Year Investment
1. Avoid Timing the Market

Investing during market dips may be difficult to time accurately.
Consider a systematic transfer plan (STP) for better risk management.
2. Blend Index Funds with Active Funds

Allocate a portion of your funds to actively managed equity funds.
This will complement the performance of your index fund investments.
3. Sectoral and Thematic Funds for Growth

Explore funds focused on high-growth sectors like technology or healthcare.
These can outperform traditional index funds over the long term.
4. Include Global Equity Funds

Global funds provide exposure to international markets.
This reduces dependence on the Indian economy for returns.
5. Regularly Review Portfolio Performance

Evaluate the performance of your investments at least annually.
Rebalance your portfolio to maintain optimal allocation.
Final Insights
Relying solely on a Nifty 50 Index Fund may not maximise your wealth over 15 years. Combining index funds with actively managed funds, sectoral funds, and international exposure will yield better results. Avoid timing the market; instead, focus on consistent investments and professional advice for higher returns and reduced risks.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7220 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 07, 2024

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Suggest some bonds where I can invest monthly. For a safer returns. And please let me know is indiabonds is a safe platform to invest.
Ans: Investing in bonds monthly is a safe way to grow wealth steadily. However, instead of investing directly in bonds, bond mutual funds offer better options.

Bond mutual funds provide diversification and professional management. They also eliminate the need to worry about individual bond risks like defaults.

Certified Financial Planners (CFPs) recommend investing through mutual fund distributors (MFDs). It simplifies the process and ensures expert guidance.

Challenges of Investing in Direct Bonds
High Minimum Investments: Direct bonds often require larger amounts than bond funds.

Limited Liquidity: Selling bonds before maturity can be challenging and may incur losses.

Complexity in Selection: Choosing the right bond demands market knowledge and regular monitoring.

Interest Rate Risk: Fixed returns may lose value due to inflation or rising rates.

Instead of direct bonds, bond funds provide flexibility and cost-effectiveness.

Why Use an MFD Instead of Online Platforms?
Platforms like IndiainBonds may seem convenient. However, there are drawbacks to investing without personalized guidance:

Limited Advice: Platforms don't offer tailored financial planning.

Transaction Focused: They prioritize transactions, not long-term financial goals.

Hidden Costs: There could be transaction fees or platform charges.

MFDs work alongside Certified Financial Planners to design suitable strategies.

Benefits of Bond Funds over Direct Bonds
Regular Income: Bond funds reinvest payouts, growing your corpus.

Professional Management: Expert fund managers handle portfolios.

Tax Efficiency: Long-term holding of bond funds aligns better with tax rules.

Ease of Investment: SIP options allow monthly investments with smaller amounts.

Diversification: Bond funds spread risks across multiple bonds.

New Tax Rules for Bond Fund Investments
Long-term gains from bond funds are taxed per your income slab.

Short-term gains are also taxed as per your slab.

Discuss taxation strategies with a Certified Financial Planner to maximize post-tax returns.

How to Structure Monthly Bond Fund Investments
Determine Investment Goals: Know the purpose of your investment.

Assess Risk Appetite: Select bond funds matching your risk level.

Choose the Right Fund: Opt for funds managed by reputed firms.

Monitor Performance: Review returns regularly with your CFP.

Start Systematic Investments: Use SIP to invest monthly.

Ensure Liquidity: Check for easy redemption features if needed.

Final Insights
Direct bonds may not suit all investors. Bond funds are simpler and safer alternatives.

Certified Financial Planners can offer holistic advice tailored to your needs. Invest through MFDs for consistent returns and better support.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Anu

Anu Krishna  |1369 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Dec 07, 2024

Asked by Anonymous - Dec 06, 2024Hindi
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Hello Ma'am. I hope you are doing well. I am not willing to disclose my name. I hail from a nuclear family comprising my parents and myself. I am 28. I was hesitating at first but I am suffering from severe mental agony. The cause of this is my father. My father is extremely volatile, getting aggressive and verbally violent in the smallest and most random of issues. I am an extremely peace loving person as my job as a teacher is demanding. My mother is very demure and prefers to do things hus way to maintain peace in the house. Whenever aggravated situations like this arise, and I have a debate or argument with my father, I generally keep my voice calm but hands and legs tremble and I have palpitations. I lose my semblance and become unable to place my opinions. When I see my father like this, I feel scared to the core. I start remembering the violent childhood beatings that I used to get for not able to cope with studies. I respect him but have realised that my love for him is long gone. The words that he spews verbally, add to my scar and trauma. My mother asks me to remain silent and let him calm down on his own. But the words scar me. I am increasingly becoming distant from my father. I am at a phase in life where I am earning but am not stable. Moreover I worry for my mother as I love her dearly. Can you suggest me how to cope with such a difficult situation? I am earnestly looking forward to your suggestions. Regards MR
Ans: Dear Anonymous,
There's little that you can do to change the dynamics of the relationship between your mother and father. Your mother chooses to be submissive and your father has also got used to being the decision maker and things work between them. So leave it at that.
Now, when it comes to you; you have a choice of going through it or doing something about it. You are 28; so what if you are not earning well...maybe stepping out of home will help you re-think and move to something better that lets you earn better as well. At times in life, strong decisions like these are life-changing and they must be made. Is this going to change the relationship between you and your father? No, it wont; but at least you have a chance at a life that you can build for yourself. It's time you grew into your own skin and at this moment if you don't do that for yourself, the rest of your life you will be playing the role of a victim and blaming your father for things not going well for you. You have a choice!

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

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Ramalingam

Ramalingam Kalirajan  |7220 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 07, 2024

Money
I am 50 years. I have 20 K sip in Nippon large cap, 10 K in Nippon multicap and 5 K in HDFC Midcap opportunity fund. I have 5 L corpus in DSP small cap and 2 L in HDFC hybrid equity fund and 4 L in Axis Blue chip. Are my SIP OK or a change is needed? Should I redeem non sip funds and put in the three funds where SIP is there. Or should I redeem and put in FD? Please guide
Ans: Your portfolio demonstrates a disciplined approach to wealth building through SIPs and lump sum investments. The diversification across different fund categories is commendable, which is crucial for risk management. Let us carefully evaluate your current investments to determine if changes are necessary.

Analysis of Existing SIPs
Large-Cap Fund: Rs. 20,000 SIP
Large-cap funds provide stability with steady growth potential.
Returns may be consistent but not aggressive compared to mid or small-cap funds.
This fund is suitable for long-term goals and risk-averse investors.
Multicap Fund: Rs. 10,000 SIP
Multicap funds offer flexibility across market capitalizations.
They balance risk and reward well, diversifying across sectors.
This category suits medium-to-long-term goals with moderate risk appetite.
Midcap Fund: Rs. 5,000 SIP
Midcap funds are ideal for higher growth potential with increased volatility.
They can generate better returns during market uptrends.
This allocation aligns well for wealth creation over 8–10 years.
Evaluation of Lump Sum Investments
DSP Small Cap Fund: Rs. 5 Lakhs
Small-cap funds carry higher risk but can deliver substantial long-term growth.
The current allocation of Rs. 5 Lakhs is slightly concentrated in this high-risk segment.
HDFC Hybrid Equity Fund: Rs. 2 Lakhs
Hybrid equity funds offer a balanced mix of equity and debt.
They are suited for investors with a moderate risk profile seeking stability.
This allocation provides a cushion against market volatility.
Axis Bluechip Fund: Rs. 4 Lakhs
Bluechip funds focus on financially strong, large-cap companies.
They ensure consistent returns with relatively low risk.
Your allocation here complements the large-cap SIP strategy.
Suggestions for Portfolio Rebalancing
Retain SIPs in Large-Cap, Multicap, and Midcap Funds:
The existing SIPs in these funds are well-placed for diversification and growth. No changes are required.

Do Not Redeem Lump Sum Funds to Invest in SIPs:
Redeeming funds like DSP Small Cap or HDFC Hybrid Equity to reinvest in current SIP funds may reduce portfolio diversity.

Avoid Fixed Deposits for Redeemed Amounts:
Fixed deposits offer low returns and do not beat inflation over the long term. They are not ideal for growth-oriented investors.

Recommendations for Lump Sum Funds
DSP Small Cap Fund

Retain this allocation if you have a high-risk appetite and a horizon of 8–10 years.
Monitor the fund’s performance annually to ensure consistency.
HDFC Hybrid Equity Fund

Retain this allocation for moderate risk coverage.
This fund adds a balanced approach to your portfolio.
Axis Bluechip Fund

Retain this allocation as it aligns with your large-cap SIP strategy.
It ensures stability during market corrections.
Additional Recommendations
Diversify Further:
Add an international mutual fund to gain exposure to global markets. This reduces dependency on the Indian economy.

Review Portfolio Annually:
Assess the performance of funds regularly with the help of a Certified Financial Planner. Replace consistently underperforming funds.

Tax Efficiency:
Mutual fund taxation is critical for your returns. Keep track of long-term capital gains (LTCG) and short-term capital gains (STCG) rules:

LTCG above Rs. 1.25 lakh is taxed at 12.5%.
STCG is taxed at 20%.
Key Takeaways
Your SIPs are well-aligned with diversified categories. Continue them without changes.
Avoid putting lump sum amounts in fixed deposits, as mutual funds offer better inflation-beating returns.
Maintain current lump sum investments, as they contribute to portfolio diversification.
Consider including international mutual funds for broader exposure.
Monitor and rebalance your portfolio with expert guidance annually.
Finally

Your portfolio reflects a solid foundation for long-term wealth creation. By maintaining diversification and monitoring fund performance, you can achieve your financial goals effectively.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7220 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 07, 2024

Asked by Anonymous - Dec 05, 2024Hindi
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My wife is given some money every month for house hold expenses ,she also received some money from her son. She saved some money and invests in Mutual funds and also in equality. She has started filling income tax returns.,even though her income is less than 3 lac. As money invested is also out of funds given by me. Is there any liability of tax on me.
Ans: Understanding Tax Implications for Gifts and Investments
1. No Tax on Money Given to Your Wife

Money transferred to your wife for household expenses or gifts is not taxable.
Gifts given to your wife are exempt under Section 56(2) of the Income Tax Act if given without consideration.
2. Clubbing of Income Rules

Income earned from the money you gave to your wife could be taxable under your name.
As per Section 64(1)(iv) of the Income Tax Act, any income earned by your wife from assets funded by you will be clubbed with your income.
3. Taxation on Income from Investments

Dividend Income or Interest Income: If your wife earns interest or dividends from the investments made using your funds, this income will be added to your taxable income.
Capital Gains from Investments: Income from the sale of mutual funds or equities (capital gains) is taxed in her name since it's her investment decision. It will not be clubbed with your income.
4. Money Received from Son

Any money your wife receives from her son is exempt under the Income Tax Act as it is considered a gift from a relative.
Income generated from such funds (e.g., interest, dividends) will be taxed in her hands.
5. Filing of Income Tax Returns by Your Wife

Filing returns is a good practice, even if her income is below the taxable threshold.
This ensures her financial independence and tracks her income and investments systematically.
What Should You Do?
1. Maintain Proper Documentation

Keep records of the money transferred to your wife. This helps establish the source of funds.
Document the funds received by your wife from her son.
2. Separate Accounts for Clarity

Encourage your wife to maintain a separate bank account for her investments.
This will ensure transparency and clarity in case of future tax assessments.
3. Monitor Clubbing Provisions

Regularly review investment income to check if it’s liable for clubbing.
Capital gains are not clubbed, so your wife can continue her equity and mutual fund investments.
4. Seek Professional Guidance

Consult a Certified Financial Planner or a Chartered Accountant.
They can help you structure investments and income to minimise tax liabilities.
Final Insights
There is no direct tax liability on you for money gifted to your wife. However, income from such funds may get clubbed with your income as per tax laws. By planning investments and maintaining proper records, you can manage tax compliance efficiently.

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

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Anu

Anu Krishna  |1369 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Dec 07, 2024

Asked by Anonymous - Dec 06, 2024Hindi
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Relationship
Dear Anu, I have a family member who constantly criticizes my choices and invades my personal space. While I love them immensely, as the eldest child of the family, I also feel suffocated. How do I set boundaries without feeling like I’m being disrespectful? Sometimes, I question if I’m the one being too sensitive. Could you help me figure this out?
Ans: Dear Anonymous,
When you say criticizes your choices and invades your personal space, they are two different things...
You can't do much when people criticize your choices. If the choice you have made is wise for you, ignore what people say and move on. Choices on food, clothes, etc are so personal...
But if it concerns any important decisions of life, I would suggest that you take a moment and understand why that person is criticizing your choice; is the criticism part of how they show care? While it's very easy to criticize someone who criticizes you, always know the space they come from. Some people do not know how to show care and do it through authority and imposition which of course is never pleasant.
When it comes to invading your personal space, I am unable to imagine what that means in your case as it is too generalized. Anyway, if it feels uncomfortable, draw a boundary and make sure that you do not allow them to violate it. Initially, they will talk of you being very disrespectful, but stay on course and sooner than later they will get used to a newer way of interacting with you.

On whether you are being too sensitive: that's why I found your post very generalized. A few instances could have painted a better picture and also tell you whether your reaction is necessary or is the other person actually prying too much.

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

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Milind

Milind Vadjikar  |753 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Dec 07, 2024

Asked by Anonymous - Dec 07, 2024Hindi
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Money
I’m 50 year old professional considering early retirement.. My current investments stand like this 50L in PF, 52L in NPS and another 50 lakhs in FD.. I hv a rent income of 20k and staying in own house.. my plan is investing 40 Lakhs from FD in to SWP withdrawing 40K per month. Balance 10L kept as Emergency fund Keep the NPS invested till I’m 60 later I can buy Annuity from that Is it good option to keep 52L that is in PF for next 3 years (till it earns interest) then I will consider to invest either in SWP or any other mutual funds Pls suggest any corrections needed to this? My monthly expenses will be around 50-60 k that can be met with above arrangement now and later considering inflation
Ans: Hello;

To generate 40 K monthly income from 40 L fund you will have to do SWP at the rate of 12% which is unsustainable and not prudent.

Because an year of negative and/or flat returns in the market will erode the value of your corpus significantly.

Golden rule for SWP in retirement is that the source fund should be a hybrid fund with low allocation to equity and the SWP rate should not be more than 3-3.5%.

If you are keen to retire now you will have to withdraw the EPF so total corpus will be around 1 Cr.

A 3.5% SWP will yield you a monthly income of around 29.2 K.

Add your rental income of 20 K to this and your total monthly income comes to around 49.2 K.

If you do not wish to utilise your EPF now then you may have to continue working for atleast 5 years more.

Alternatively you may buy an immediate annuity for your corpus of 1 Cr and considering 6% annuity rate it may fetch you a monthly income of around 50 K but the flip side it is not indexed to inflation.

If you are confident of being able to top-up annuity income at 5, 10,15 year interval to match up with inflation then this can be a good option.

Best wishes;

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Ramalingam

Ramalingam Kalirajan  |7220 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 07, 2024

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Money
I am 65 year age retired and have no pension. I have made investment in few govt schemes and get some regular income by way of interest but due to inflation and low interest rates scenario emerging pl suggest basket of investment to get regular monthly income of Rs 50000 . I have handsome amount in ppf account which is about to mature
Ans: Your situation reflects prudent planning with investments in government schemes and a maturing PPF. However, inflation and low interest rates demand a diversified strategy for consistent and inflation-adjusted income.

Steps to Achieve Rs. 50,000 Monthly Income
1. Reassess Your Current Investments

Evaluate the performance of your government schemes and compare their returns.
Retain investments offering guaranteed and steady income, like Senior Citizen Savings Scheme (SCSS) or Post Office Monthly Income Scheme (POMIS).
Redeploy funds from low-yield investments to more productive avenues.
2. Utilise the Maturing PPF

PPF offers tax-free corpus. Use this to create a diversified portfolio for stable income and growth.
Split the PPF corpus into equity mutual funds and safer debt instruments.
3. Diversify with Debt and Hybrid Funds

Invest in conservative hybrid funds to generate regular income and protect capital.
Include short-term and medium-term debt funds for steady returns, which are higher than fixed deposits.
4. Set Up a Systematic Withdrawal Plan (SWP)

Use equity or hybrid mutual funds to set up SWPs.
An SWP ensures a steady monthly income while your capital continues to grow.
5. Consider Dividend-Yielding Funds

Dividend-paying mutual funds offer periodic cash flow and potential for capital appreciation.
6. Fixed Income Instruments for Safety

SCSS: Offers assured returns and is tailor-made for senior citizens. Invest up to Rs. 30 lakh as a couple.
POMIS: Provides reliable income for smaller investments.
7. Include Tax-Free Bonds

Invest in high-quality tax-free bonds for steady, tax-efficient interest.
Creating the Income Plan
To achieve Rs. 50,000 per month:

Allocate a portion of funds to safer options like SCSS, POMIS, and tax-free bonds for stability.
Use equity and hybrid funds for growth and inflation protection.
Combine these with SWPs for regular income.
Tax Planning
Interest from SCSS and POMIS is taxable, so invest carefully.
Equity mutual funds have tax-efficient withdrawal options.
Debt funds offer indexation benefits for long-term investments.
Emergency and Health Fund
Keep at least 12 months of expenses in a liquid fund for emergencies.
Maintain your health insurance to handle rising medical costs.
Final Insight

A mix of secure instruments, mutual funds, and systematic withdrawals can comfortably generate Rs. 50,000 monthly income. Periodically review your plan with a Certified Financial Planner to adapt to changing needs and market conditions.

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

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Shalini

Shalini Singh  |140 Answers  |Ask -

Dating Coach - Answered on Dec 07, 2024

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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