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Ramalingam Kalirajan |8259 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 15, 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 - Apr 04, 2024Hindi

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Hi I am 34 year old.. monthly salary of 90k as of now.. considering inflation how much amount of money should I invest..

Ans: It's great to see you taking proactive steps towards securing your financial future at the young age of 34. Let's dive into crafting a tailored investment plan to help you navigate the impact of inflation and achieve your financial goals.

Understanding the Impact of Inflation:

Inflation erodes the purchasing power of money over time, making it essential to invest wisely to beat inflation and grow your wealth.

Assessing Your Current Financial Situation:

With a monthly salary of 90k, you're in a good position to allocate a portion of your income towards investments. However, it's crucial to strike a balance between investing for the future and meeting your present financial needs.

Setting Realistic Investment Goals:

Before determining how much to invest, it's essential to define your financial goals, whether it's saving for retirement, buying a home, or funding your children's education. Setting clear and achievable goals will guide your investment strategy.

Analyzing Investment Options:

Considering your age and income, investing in a mix of equity and debt instruments can help you achieve your financial objectives while managing risk.

Exploring Equity Investments:

Equity investments offer the potential for higher returns over the long term, helping you beat inflation and grow your wealth. While they come with higher volatility, investing in quality stocks or equity mutual funds can help you build a diversified portfolio and harness the power of compounding.

Understanding the Disadvantages of Index Funds:

Index funds aim to replicate the performance of a specific market index, offering low costs and broad market exposure. However, they may limit potential returns compared to actively managed funds, which have the flexibility to outperform the market through strategic stock selection and timing.

Highlighting the Benefits of Actively Managed Funds:

Actively managed funds are run by professional fund managers who actively research and select investments to outperform the market. These funds offer the potential for higher returns and can adapt to changing market conditions, making them suitable for investors seeking growth and capital appreciation.

Exploring Debt Instruments:

Debt investments provide stability and steady income, making them ideal for balancing the risk in your portfolio. Options like fixed deposits, bonds, or debt mutual funds can offer predictable returns while preserving capital.

Setting Aside Emergency Funds:

Before investing, ensure you have an emergency fund equivalent to at least six months' worth of expenses. This fund acts as a financial safety net, providing liquidity in case of unexpected expenses or job loss.

Seeking Professional Guidance:

As a Certified Financial Planner, I'm here to provide personalized advice and guidance tailored to your financial goals and risk tolerance. Together, we can develop a comprehensive investment plan that aligns with your objectives and helps you navigate the impact of inflation.

In Conclusion:

By investing a portion of your income in a diversified portfolio of equity and debt instruments, you can beat inflation, grow your wealth, and achieve your financial goals over the long term. Remember to regularly review and adjust your investment strategy based on changing market conditions and life circumstances.

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.