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Ramalingam

Ramalingam Kalirajan  |7163 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 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
Arindam Question by Arindam on May 12, 2024Hindi
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I am 35 years of age and working in a PSU. I have following savings 1. PPF of amount 26L , contributing 1.5L each year. 2. PF around 10L. 3. NPS around 1L ( just started ). 4. FD around 10L. 5. SIP around 45000 each month having total portfolio of around 32L in MF including SIP and lumpsum. Want to increase SIP gradually to 1L per month in next 7 years . I do not have any type of loans. Pls suggest any adjustment in my savings and portfolio if any.

Ans: It's evident that you've been diligent in your savings and investments, which is commendable. Your portfolio reflects a balanced mix of traditional and market-linked instruments, providing stability and growth potential.

Given your age and financial goals, here are some suggestions to optimize your savings and portfolio:

PPF and PF: With a substantial amount in PPF and PF, you're already on track for long-term savings. Since both these instruments offer tax benefits and stable returns, continue contributing to them regularly to maximize their growth potential.

NPS: It's great that you've initiated investments in the National Pension System (NPS). NPS offers a combination of equity, corporate bonds, and government securities, providing diversification to your portfolio. Consider increasing your contributions gradually to build a robust retirement corpus.

FD: While Fixed Deposits provide safety and guaranteed returns, the interest rates may not always beat inflation, leading to erosion of purchasing power over time. Evaluate whether you can allocate a portion of your FD corpus to more growth-oriented instruments like mutual funds for better returns in the long run.

SIPs: Your SIP investments of ?45,000 per month show a commitment to wealth accumulation through equity mutual funds. Increasing the SIP amount gradually to ?1 lakh per month over the next seven years aligns with your goal of enhancing wealth creation. Ensure that you review and adjust your SIPs periodically based on market conditions and your financial goals.

Portfolio Rebalancing: Regularly review your portfolio to ensure it remains aligned with your risk tolerance and financial objectives. Consider rebalancing your portfolio periodically to maintain the desired asset allocation mix and optimize returns.

Emergency Fund: It's essential to have an emergency fund equivalent to 6-12 months of living expenses in a liquid and easily accessible account. If you haven't already, consider setting aside a portion of your savings for this purpose to handle unforeseen expenses without disrupting your long-term investments.

Overall, your savings and investment approach indicate a disciplined approach towards financial planning. By making gradual adjustments and staying committed to your financial goals, you're well-positioned to achieve financial security and prosperity in the years ahead.

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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Ramalingam

Ramalingam Kalirajan  |7163 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2024

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Hello, I have a monthly saving of approximately rs 6000 in nps, rs7000 in pf with the rate of interest of approx 6.9, rs 23000 in SBI small cap mf, rs 16000 in ICICI prudential Blue chip mf, rs 5000 in kotak gold fund mf and rs 3000 in HDFC index s&p BSE sensex mf. I am 31 years old and i would like to know how much should I increase the investment and/ if I need to reallocate my sip to ensure retirement at 50 years old with a monthly expenses of 1lc.
Ans: You're off to a good start with your investments! Given your age and the goal of retiring at 50 with a monthly expense of 1 lakh, you have approximately 19 years to achieve this goal. Here are some suggestions to align your investments with your retirement goal:

Increase SIPs: At 31, you have time on your side. You might want to consider increasing your SIP amounts annually, perhaps by 10-15% to account for inflation and salary increments.
Reallocation:
Equity Allocation: Given your long-term horizon and age, you can afford to have a higher allocation to equities. Consider reallocating more towards equity mutual funds.
Diversification: Ensure you're not overly concentrated in a single asset class. Diversify across large-cap, mid-cap, and small-cap funds to spread the risk.
NPS & PF: NPS and PF are good vehicles for retirement savings, but they are more conservative. You might want to consider taking some risk by increasing your equity exposure through mutual funds to potentially earn higher returns.
Review & Rebalance: Periodically review your portfolio to ensure it aligns with your goals and risk tolerance. Rebalance if necessary to maintain your desired asset allocation.
Emergency Fund: Ensure you have an emergency fund equivalent to 6-12 months of expenses in a liquid and safe instrument.
Consult a Financial Advisor: Given the complexity of retirement planning, it might be beneficial to consult a financial advisor who can provide personalized advice based on your financial situation, goals, and risk tolerance.
Remember, retirement planning is a marathon, not a sprint. Consistency, discipline, and periodic reviews are key to achieving your retirement goals.

..Read more

Ramalingam

Ramalingam Kalirajan  |7163 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 17, 2024

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Hi Sir,I'm 25 years old and earn 28,000 a month. I have SIPs of 2500 each in Tata digital India fund and Axis small cap fund and around 2,75,000 in Savings account. Please suggest me if I should do modification to my current SIPs or increase my SIP amount and what to do with savings in account. My risk appetite is high as I don't have any expenses and can invest aggressively. Any suggestions would be appreciated. Thanks
Ans: Given your age, income, and high risk appetite, you have a great opportunity to invest aggressively for long-term growth. Here's a suggested approach:

Certified Financial Planner (CFP): Consult a CFP to create a personalized financial plan considering your goals, risk tolerance, and time horizon.

Modify or Increase SIPs:

Equity Funds: Since you have a high risk appetite, consider adding more equity funds to your portfolio.
Sectoral Funds: Explore adding sectoral or thematic funds for higher growth potential. However, these funds come with higher risk.
Increase SIP Amount: Gradually increase your SIP amount in existing or new funds to accelerate wealth accumulation.
Savings:

Emergency Fund: Maintain 3-6 months' expenses in a high-interest savings account as an emergency fund.
Invest: Invest a portion of your savings in equity mutual funds or stocks for long-term growth. You can also consider tax-saving ELSS funds to save tax and grow wealth simultaneously.
Review and Adjust:

Regular Review: Regularly review your portfolio with your CFP to ensure it's aligned with your goals and risk appetite.
Adjust SIPs: Make necessary adjustments to your SIPs based on performance, market conditions, and changing goals.
Considering your income and savings, you can aim to increase your SIPs by allocating a higher percentage of your income towards investments. For instance, increasing SIPs to ?5,000 or ?7,000 monthly can accelerate wealth accumulation.

Remember, while investing aggressively can potentially lead to higher returns, it also comes with higher risk. Ensure you're comfortable with the risk associated with your investment choices and consult your CFP for personalized advice.

..Read more

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Nayagam P

Nayagam P P  |3935 Answers  |Ask -

Career Counsellor - Answered on Nov 27, 2024

Ramalingam

Ramalingam Kalirajan  |7163 Answers  |Ask -

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

Asked by Anonymous - Nov 27, 2024Hindi
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Hi, sir I am a an 30 year old (single) engineer working with a MNC in Chennai, unfortunately till this day i haven't had any savings at all for my future (retirement, other short term or long term goals). Currently my take home salary after EPF and parental insurance is 53k ( EPF is about 4900/month - employee+employer) i haven't opted for Corporate NPS but is provided by the company without any additional contribution from company. I have company health insurance policy and have planned to take my own health insurance and term insurance plan. Adding to above I have zero emergency fund with me. How should I proceed with my investments?
Ans: You have taken the first step by recognising the need to plan. It’s essential to appreciate your intention to secure your financial future. Let’s look at how you can proceed to achieve your short-term and long-term goals.

Your current take-home salary is Rs 53,000, and your EPF contribution is Rs 4,900. However, you lack savings, investments, and an emergency fund. Here's a step-by-step strategy:

Build an Emergency Fund
Set aside funds to cover at least six months' expenses.

Start by saving 10-15% of your salary monthly into a high-interest savings account.

Use Recurring Deposits or Liquid Mutual Funds to maintain this fund for emergencies.

Secure Yourself with Insurance
Health insurance: Maintain your company health policy but add a personal health policy. Choose a policy offering a sum insured of Rs 10-15 lakh.

Term insurance: Buy a term plan covering 10-15 times your annual income. Keep the policy simple and avoid investment-linked insurance.

Budget Your Income
Allocate your income carefully for expenses, savings, and investments.

Use the 50-30-20 rule: 50% for needs, 30% for wants, and 20% for savings and investments.

Avoid unnecessary expenses to increase your saving capacity.

Start Investing Gradually
Short-term goals (1-5 years): Invest in debt funds or recurring deposits. Debt mutual funds are good for stable returns.

Long-term goals (5+ years): Invest in equity mutual funds for higher returns. Choose actively managed funds with consistent performance.

Avoid index funds. Actively managed funds have a better potential for higher returns through professional fund management.

Retirement Planning
Utilise the EPF for retirement. Your current contribution will grow over time with compounding.

Consider investing in diversified equity mutual funds for additional retirement savings.

Corporate NPS: You can explore NPS for its tax-saving benefits. However, don’t rely solely on it for retirement.

Tax-Saving Investments
Use Section 80C to save taxes up to Rs 1.5 lakh.

EPF, PPF, ELSS mutual funds, and life insurance premiums can qualify under this section.

Opt for ELSS funds for tax saving and wealth creation.

Review Existing Expenses
Evaluate and minimise unnecessary expenditures.

Avoid loans for discretionary spending like vacations or gadgets.

Advantages of Using a Certified Financial Planner
A CFP can help you plan holistically and ensure you stick to your goals.

They provide tailored strategies, ensuring proper fund allocation and monitoring.

Invest through a Mutual Fund Distributor with CFP credentials to access professional advice.

Key Steps for Discipline
Automate investments through SIPs in mutual funds.

Track your monthly budget and investment progress regularly.

Avoid direct funds. Regular funds offer professional guidance and fund distributor support.

Tax Implications
For equity mutual funds, LTCG above Rs 1.25 lakh attracts 12.5% tax.

STCG on equity funds is taxed at 20%.

Debt fund gains are taxed as per your income slab. Consider these while investing.

Final Insights
You are in the right direction by seeking advice now. Build a solid foundation with savings, insurance, and investments. Take small steps toward financial independence.

Remain consistent with your investments, and review your financial plan annually.

Best Regards,

K. Ramalingam, MBA, CFP,

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

...Read more

Mayank

Mayank Chandel  |1940 Answers  |Ask -

IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Nov 27, 2024

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Hello, i really have a serious issue regarding my studies as i am 24 yrs now and gave NEET 4times and i am still preparing for nxt year 2025 but at the back of my mind i am really tensed what if the same thing repeats in the neet 2025 also like paper leak and all, So now i am confused that should i take a full drop or partial drop. The mental pressure is really hitting hard and also its almost been 4years that i am still 12th pass only and my classmates have already completed their college and some are flight attendant and earning well, So this all things just hits so hard and also the hope in parents eyes as my father is already proud that i studied science so i would definitely become doctor. I wasted a lot of money in pg and coaching (fastrack) and this all things are hitting so hard that i really feel sad and have no ways to go.
Ans: Hi Bhima
I must say you have got perseverance & I appreciate your parent's trust in you. You have already appeared multiple times and you are going to appear again in 2025. By the time you will be 25 years old. They say there is no age to learn. But after getting admission you need another 10 years to practice as a qualified specialist. Make sure you take admission in the next session.

If higher cutoff & high fees of private colleges are an issue for you, then try exploring the MBBS abroad option, I can help with that too. Since NEXT is compulsory for Indian & Foreign graduates too it won't make a difference if you study in India or Abroad.

For time forget all the societal pressure and give your 100% and make your parents proud.

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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