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Ramalingam

Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 21, 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 - Jun 16, 2024Hindi
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I am 34 , with a salary of 1.82 lakh take home, I have 7.5 L investment in indian stock market, 3.5 L in US , 1 lakh worth gold coin and digital gold, 30k crypto and 2.5 L in MF , LIC - 27k / year for last 10 year. My problem is emis. I have a home loan emi- 17k(18Lakh remaining ), top up - 6.5k (7 lakhs remaining), personal loan - 21k ( 11 lakhs) , car loan 11 k (5.6 L remaining ). I have a daughter of 8 months and my wife is a govt employee. My household expenses are around 50k. And Health insurance expenses are around 5k ( including my parents) . Kindly suggest should i close my position in any stock market and close the personal or car loans

Ans: Managing your finances with a high income and multiple loans can be challenging. Let's dive into a detailed plan to improve your financial situation, focusing on debt management and better investment strategies.

Assessing Your Current Financial Situation
Income and Investments

You have a good monthly salary of Rs 1.82 lakh take-home. Your investments are diversified in stocks, mutual funds, gold, and cryptocurrency.

Loans and EMIs

Your major concern is the EMI burden. Here are your current liabilities:

Home loan: Rs 17k EMI (Rs 18 lakh remaining)
Top-up loan: Rs 6.5k EMI (Rs 7 lakh remaining)
Personal loan: Rs 21k EMI (Rs 11 lakh remaining)
Car loan: Rs 11k EMI (Rs 5.6 lakh remaining)
Expenses

Your household expenses are Rs 50k monthly. Health insurance expenses are Rs 5k monthly, covering your entire family.

Financial Strategy
Prioritizing Debt Repayment

High-interest loans should be paid off first. Personal loans typically have higher interest rates than home and car loans. Let's focus on reducing your personal loan.

Investment Assessment
Stocks and Cryptocurrency

You have Rs 7.5 lakh in the Indian stock market, Rs 3.5 lakh in US stocks, Rs 30k in crypto, and Rs 1 lakh in gold.

Mutual Funds

You have Rs 2.5 lakh in mutual funds.

Steps to Improve Financial Health
1. Prioritize Debt Repayment

a. Personal Loan

This loan has the highest EMI and possibly the highest interest rate. Use your available funds to reduce or pay off this loan first.

b. Car Loan

Next, focus on your car loan. Paying this off will free up Rs 11k monthly, which can be redirected to other financial goals.

2. Reassess Investments

a. Cryptocurrency

Crypto is highly volatile and unregulated. It’s better to reduce exposure here. Consider reinvesting in safer options like mutual funds.

b. Stocks

If you have high-performing stocks, consider selling a portion to pay off debt. Balance your portfolio with mutual funds for stability.

Managing Investments
1. Diversify and Secure Investments

a. Mutual Funds

Mutual funds provide diversified exposure and professional management. Invest in funds through a certified financial planner (CFP) for better guidance.

b. Gold

Gold is a good hedge against inflation. Keep your investment but avoid adding more.

Financial Planning for Future
1. Emergency Fund

Ensure you have 6-12 months of expenses in a liquid account. This will cover any unforeseen expenses.

2. Child's Future

Start an investment plan for your daughter's education and future needs. Systematic Investment Plans (SIPs) in mutual funds are ideal.

Detailed Plan
1. Liquidate Non-Essential Investments

Sell off cryptocurrency and a portion of stocks to raise funds.

2. Pay Off High-Interest Loans

Use the raised funds to pay off the personal loan first. This will reduce your EMI burden significantly.

3. Reduce EMI Burden

After paying off the personal loan, focus on the car loan. This will further free up your monthly cash flow.

4. Rebalance Investments

Invest the remaining funds in mutual funds. This will provide a balanced portfolio and steady returns.

Professional Guidance
1. Certified Financial Planner (CFP)

Consulting a CFP will help you create a detailed financial plan. They can guide you on the best mutual funds and investment strategies.

2. Regular Reviews

Regularly review your financial plan with your CFP. Adjust investments based on market conditions and financial goals.

Financial Discipline
1. Budgeting

Create a monthly budget to track expenses and savings. Stick to it to avoid unnecessary expenditures.

2. Saving

Aim to save at least 20-30% of your income. Automate savings to ensure consistency.

Final Insights
Managing loans and investments simultaneously can be challenging but achievable. Focus on reducing high-interest loans first. Rebalance your investments to ensure safety and growth. Consult a Certified Financial Planner for personalized advice and regular reviews.

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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Mutual Funds, Financial Planning Expert - Answered on May 08, 2024

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Iam 40yrs old with 1.6lakhs take home with house wife and 3 yr old baby girl. Below is my current financial condition: 1. Taken Home loan for 35 lakhs for apartment worth of 55lakhs in 2022 with emi requirement of 41k for 11yrs (iam paying monthly 45k and one extra 45k emi yearly) 2. Took Gold loan of 11lakhs in 2022(paying from mar2024 onwards monthly 35k) for apartment purpose 3. Holding 2440 sqft land costs 25lakhs in 2021 now it is 35lakhs planned for baby girl marriage 4. 5lakhs emergency fund in FD 5. 6 lakhs FD for SBI life smart wealthbuilder plan purpose for next 6yrly premium payment, 6. Equity 5lakhs invested now mkt value 8lakhs, 7. Mf 8lakhs now 11lakhs (monthly 20k for 10 different funds with 1k stepup yearly) 8. EPF 20lakhs not withdrawn from beginning for retirement plan 9. Ssy 1.2lakhs for baby girl education (monthly 6k) 10. Ppf 50k for baby girl education (monthly 3k) 11. Nps 4.9lakhs now 6lakhs (monthly 12k from company deduction and 50k annually from my side) 12. Holding agriculture land 1acre 7lakhs near hometown purchased in 2018 now it is same price no increase... Holding bcoz I like to have agriculture land... 13. Holding Gold coins 50gms purchasing when there is Amazon offers.. for baby girl ornaments purpose 14. Term insurance 1crore for me and 50lakhs for my wife purchased in 2022 15. Health insurance 20lakhs with premium 60k for 3yrs purchase in 2022... Monthly 1.6lakhs take home spending as below: 1. 45k home loan emi (annually 45k as one extra emi) 2. 30k mf sip ( 3k each for 10 funds - quant infra, quant smallcap, quant elss, 360 one focused, canara robeco smallcap, canara robeco emerging, mirae largecap, pgim flexicap, parag elss, ICICI prudential technology fund) 3. 35k gold loan prepayment 4. 35k home maintenance expenses 5. 10k ssy and ppf 6. 5k apartment maintenance 7. 45k LIc premium annual requirement 8. 40k term loan premium annual requirement taken 1crore for me and 50lakhs for my wife total to 40k premium 9. 30k annually for bike insurance, services and other maintenance 10. 1.3lakhs for baby girl school fees from this year 50% already paid 50% to be paid in oct 2024 11. 60k premium for health insurance once for 3 years purchased in 2022... I have few ask sir: 1. Want to buy 13 to 15Lakhs car.. when to buy with my financial condition and I have no down payment free cash now 2. Should I change my financial saving/investment please suggest as I am not having any free cashflow post the monthly commitment 3. Want to generate 2nd source of income suggest plz which is good to have it 4. Want to become financial freedom by next 10years so what I need to do for it and plan better...
Ans: You've provided a detailed overview of your current financial situation, which is a great starting point for planning your future financial goals. Let's address your queries one by one:
1. Car Purchase Timing: Given your existing financial commitments, it's important to evaluate whether purchasing a car fits within your budget without compromising your other financial goals. Since you mentioned that you don't have any free cash for a down payment, consider saving up for the down payment first before making the purchase. Additionally, assess whether you can afford the additional monthly expenses associated with car ownership, such as fuel, insurance, and maintenance.
2. Review of Financial Savings/Investments: With your current financial commitments and no free cash flow, it's essential to reassess your savings and investment strategies. Look for opportunities to optimize your portfolio by prioritizing goals and reallocating resources accordingly. Consider reviewing your MF SIPs and other investments to ensure they align with your financial objectives and risk tolerance. Consolidating or reallocating investments may help streamline your financial plan and maximize returns.
3. Generating a Second Source of Income: Exploring avenues for generating additional income can provide financial stability and accelerate your journey towards financial freedom. Consider options such as freelancing, part-time consulting, rental income from property, or starting a side business based on your skills and interests. Evaluate each opportunity carefully to ensure it complements your current lifestyle and commitments.
4. Achieving Financial Freedom in 10 Years: To achieve financial freedom within the next decade, focus on building a robust financial plan centered around your long-term goals. Consider steps such as:
• Increasing savings and investments: Aim to boost your savings rate and channel funds towards high-yield investment options to accelerate wealth accumulation.
• Debt management: Prioritize debt repayment to reduce financial burdens and free up cash flow for investments.
• Diversification: Diversify your investment portfolio across asset classes to mitigate risk and optimize returns.
• Continuous learning: Stay informed about personal finance concepts and investment strategies to make informed decisions and adapt to changing market conditions.
• Regular review: Periodically review your financial plan to track progress, make necessary adjustments, and stay on course towards your goals.
Overall, achieving financial freedom requires discipline, strategic planning, and a long-term perspective. By making informed decisions, optimizing resources, and staying committed to your financial goals, you can work towards building a secure and prosperous future for yourself and your family. Consider consulting with a Certified Financial Planner (CFP) to receive personalized guidance tailored to your specific financial circumstances and aspirations.

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Ramalingam

Ramalingam Kalirajan  |6986 Answers  |Ask -

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

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Hi Sir, I am 38 year old currently working in an MNC company with income of 1.80 lakhs per month. However, I am having debts close to 1.3cr with most of my monthly income going towards EMI. I have property worth 1.6cr in which I am living in. Off late I am struggling managing my finances. I have 2 kids (10yr/8yr) old. Should I continue to pay EMIs & wait for them to end after 10 years or just sell the property to start off fresh. Your suggestions will be of great help.
Ans: It's understandable to feel overwhelmed by financial burdens, but with careful planning, we can work towards a brighter financial future. Let's evaluate your situation and explore potential solutions.

Acknowledging Your Challenges
Facing a significant debt burden while managing a family and household expenses can indeed be stressful. However, taking proactive steps now can alleviate financial strain in the long run.

Assessing Your Options
Continuing EMIs
Continuing to pay EMIs on your existing loans may seem like a daunting task, especially with a substantial portion of your income allocated towards debt repayment. While it ensures you retain ownership of your property, it prolongs your financial stress and limits your ability to build wealth elsewhere.

Selling the Property
Selling your property to settle debts and start afresh is a viable option worth considering. It provides immediate relief from the burden of EMIs and allows you to redirect funds towards debt reduction and building financial security for your family's future.

Analyzing the Pros and Cons
Continuing EMIs:
Pros: Retain ownership of the property, potentially benefiting from future appreciation.
Cons: Continued financial strain, limited flexibility in managing other financial goals, prolonged debt repayment.
Selling the Property:
Pros: Immediate debt relief, opportunity to start anew with reduced financial obligations, potential to invest surplus funds for wealth creation.
Cons: Loss of ownership of the property, potential impact on family's living arrangements, need for careful planning to maximize proceeds from the sale.
Considering Family Needs
Education and Future Planning
As a parent, securing your children's future education and well-being is paramount. Evaluating how your financial decisions align with their long-term needs is crucial in making informed choices.

Lifestyle and Comfort
Maintaining a comfortable standard of living for your family, especially during their formative years, requires careful financial management. Balancing debt repayment with providing for your family's present needs is essential.

Crafting a Financial Strategy
Consultation with Experts
Seeking guidance from financial professionals, including Certified Financial Planners, can provide valuable insights and personalized recommendations tailored to your specific circumstances.

Creating a Financial Plan
Developing a comprehensive financial plan that prioritizes debt reduction, savings, and investment goals can pave the way towards financial freedom and stability.

Conclusion
In conclusion, whether to continue paying EMIs or sell the property requires a thorough assessment of your financial goals, obligations, and family needs. By weighing the pros and cons and seeking expert advice, you can make an informed decision that sets you on the path towards financial well-being.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 27, 2024

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Money
Sir, I am 34 years govt job employees. My salary is 45k/m. I am under debt of 30L. 15L PL+15L on relatives. I have no any assets. I have two child they are 8 &4years. My emi goes to 60k/m. I am unable to manage it. I loose all my money into the share mkt in2020-2023. What I do
Ans: Evaluating Your Financial Situation
You are currently facing significant financial challenges. With a salary of Rs 45,000 per month and debts totaling Rs 30 lakhs, your situation is stressful. Your monthly EMI payments amount to Rs 60,000, which is more than your monthly income. This indicates a serious cash flow problem that needs immediate attention.

Understanding Your Debt
You have Rs 15 lakhs in personal loans and another Rs 15 lakhs owed to relatives. Both these debts need to be managed effectively. Personal loans often come with high interest rates, which can exacerbate your financial stress.

Immediate Steps to Manage Debt
Your primary goal should be to reduce your monthly EMI burden. Here are some steps you can consider:

Debt Consolidation: Look into consolidating your debts into a single loan with a lower interest rate. This can reduce your overall EMI.

Loan Restructuring: Contact your bank to discuss the possibility of restructuring your loan. This might involve extending the loan tenure to reduce monthly payments.

Negotiating with Creditors: Talk to your relatives about possibly renegotiating the repayment terms. They might be willing to extend the repayment period or reduce the interest.

Expense Management
Cutting down on unnecessary expenses is crucial. Here are some ways to manage your expenses better:

Create a Budget: Track your income and expenses meticulously. Identify areas where you can cut costs.

Reduce Discretionary Spending: Limit spending on non-essential items and focus on basic necessities.

Seek Support: Government employees often have access to support systems and financial counseling. Utilize these resources.

Generating Additional Income
Finding ways to supplement your income can provide relief. Consider the following:

Part-time Work: Look for part-time or freelance work that you can manage alongside your job.

Utilize Skills: Use any skills or hobbies to generate additional income. For instance, tutoring, freelancing, or consulting.

Building a Financial Safety Net
Once you stabilize your debt situation, focus on building a small emergency fund. This will provide a cushion against future financial shocks. Start with a small amount and gradually increase it as your situation improves.

Investing Cautiously
Given your past experience with the stock market, it is important to approach investments cautiously:

Avoid High-Risk Investments: Stay away from high-risk investments like direct stock market trading for now.

Consider Safe Options: Look into safer investment options such as fixed deposits or recurring deposits, which provide stability.

Actively Managed Funds: If you decide to invest in mutual funds, consider actively managed funds. These are managed by professionals who can help navigate market volatility.

The Importance of Financial Planning
A Certified Financial Planner (CFP) can help you create a structured financial plan. They can provide tailored advice based on your current financial situation and long-term goals.

Benefits of Professional Guidance
Working with a CFP can offer several advantages:

Personalized Advice: Receive investment advice tailored to your risk tolerance and financial goals.

Strategic Planning: Benefit from a structured plan that balances debt repayment with savings and investments.

Regular Monitoring: Continuous monitoring and adjustment of your financial plan to stay on track.

Creating a Sustainable Financial Plan
A comprehensive financial plan should address:

Debt Management: Prioritize debt repayment and create a clear plan to eliminate debt.

Emergency Fund: Build an emergency fund to cover 3-6 months of living expenses.

Education Planning: Start small savings for your children’s education to avoid large financial burdens later.

Retirement Planning: Begin saving for retirement, even with small contributions, to ensure long-term security.

Conclusion
Your financial situation is challenging, but with a structured approach, it can be managed. Focus on reducing debt, managing expenses, and slowly building a financial safety net. Consider professional guidance to create a balanced and sustainable financial plan. With patience and discipline, you can improve your financial health.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Anu Krishna  |1281 Answers  |Ask -

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Help me!!! 1.I'm starting new "work" on my own(challenging for me) but my mind says quit it, be quite & do nothing. I myself don't know that wether the result of work will be +ive or uncompleted like alws. 2. My mind has become like order seeker type, when someone orders me, I do those things with dedicated(but sad from inside) manner. But when myself will try something different(which i fear, but necessary) then. "I QUITS IT" & sometimes I don't even start. 3. I'm like stuck no clue what/whom I want to do in life, I'm in cllg(1 yr) doing (CSE) ,. 4. I want to do/try (sports,talking girls,study,stocks,coding..) many things, but myself, my thoughts(overthinker), R like just be in the place where u are[confused,po*n,think about past/future(being billio..re,olympics..), girl (that u liked & never talked), abusive/beating self,.. sometimes feels like end life, but don't hv courage for that also.. 5. I tried self help books, spirituality, god, self affirmation, writing... & thay affected me(sometimes) but for only some time, then again that devil me comes up &these things never get completed. As no one in my family knows about all these, so that's Y ,I hv to fight/loose/try again, the battles with myself.
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If in the past you have had the urge to QUIT, how is this time going to be different? This is not to discourage you from taking up 'new work' but pointing out that there is some amount of work that you need to put to clear the mind out of blockages.
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- What comes first to the mind when you start something new?
Also, focus on one thing at a time; study and go deep into it...what's this thing with work? I don't understand. When the mind is unsettled, take one thing/activity, pursue it and finish it. It could simply be studying for Year 1 of your college...just only do that...once your mind is trained in completing an activity, you can add another one the next year along with studying and then pursue both...it could be some sport and studying...then the next year, you could add a third activity. This is called 'training the mind in discipline'. Discipline will make sure that you start and finish things...So, go slow and do one thing at a time.

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Drop in: www.unfear.io
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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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