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Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 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
jeyachandran Question by jeyachandran on Apr 28, 2024Hindi
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Hi sir, I am 35 years old unmarried . I earns 40000 per month (very secure job) . I already invested in small cap, mid cap fund mutual funds since march 2020 at the time of market low. Now my corpus is 12.5 lakhs. My current XIRR is 31.7%. Now i planed My monthly SIP is 25000 coming months. How many years i wair to achieve 1 crore corpus.

Ans: Crafting a Path to a 1 Crore Corpus
Achieving a significant financial milestone like a 1 crore corpus is indeed a commendable goal, and your proactive approach towards investing is admirable. Let's delve into a strategic plan to realize this objective:

Assessing Your Current Standing
Your current investment journey reflects a prudent decision to capitalize on market opportunities during the low phase, resulting in a commendable XIRR of 31.7%. This demonstrates your astute investment acumen and the potential for wealth accumulation.

Setting Realistic Expectations
While the allure of a 1 crore corpus is enticing, it's crucial to set realistic expectations considering your current income, investment contributions, and market conditions. With a monthly SIP of 25,000 INR, you're taking significant steps towards your financial goal.

Estimating Time Horizon
Given your current investment trajectory and assuming a moderate growth rate, achieving a 1 crore corpus can be estimated. However, it's essential to consider various factors such as market volatility, economic fluctuations, and personal financial commitments.

Mapping the Journey Ahead
Your commitment to increasing your SIP amount showcases your determination to expedite wealth accumulation. By consistently contributing to your investment portfolio and leveraging market opportunities, you're positioning yourself for long-term financial success.

Monitoring and Adaptation
As a Certified Financial Planner, I recommend maintaining a vigilant eye on your investment portfolio's performance and making necessary adjustments along the way. Regular reviews and portfolio rebalancing ensure alignment with your financial objectives and risk tolerance.

Conclusion
In conclusion, your proactive investment approach, coupled with disciplined savings habits, lays a solid foundation for achieving your financial aspirations. With perseverance, patience, and strategic planning, attaining a 1 crore corpus is within reach.

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  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

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HI I am investing Rs 10000 monthly in SIP from March 2017, when do I expect my corpus to be 1 crore
Ans: Hi Arun,

That's fantastic! Investing Rs. 10,000 monthly since March 2017 shows real dedication! It's tough to give an exact date for your corpus to hit Rs. 1 crore because of two main reasons:

Market Returns: Mutual fund returns go up and down. No one can predict the future.

SIP Duration: I don't know how long you kept up your SIPs after March 2017.

But hey, we can still make an estimate! Here's how:

SIP Calculators: Many websites have SIP calculators. You can enter your investment amount, expected return rate, and investment period. Play around with these to see how long it might take to reach your goal.

Past Performance (not a guarantee): Check the past performance of your mutual funds (on their websites or financial portals). This might give you a clue about how your corpus might have grown. But remember, past performance doesn't guarantee future results.

Some more things to think about:

You're Doing Great! Investing Rs. 10,000 monthly since 2017 is a big accomplishment! You're on track to building a serious nest egg.

Stay Invested for Long Term: The magic of compounding really works best in the long run. Try to stay invested for as long as possible to benefit from market growth.

Talk to a CFP: A Certified Financial Planner (CFP) can create a personalized plan to help you reach your financial goals. They'll consider your risk tolerance, investment horizon, and other financial aspects.

Keep up the excellent work, Arun! By staying on track and maybe getting some professional advice, you can increase your chances of achieving your financial dreams.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

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

Asked by Anonymous - Jul 15, 2024Hindi
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Hi Guys, I am 30 yrs old (Single) salaried employee earning 8LPA. I have recently started SIP in mutual funds investing 5K each in Quant Small Cap, Midcap, Flexi cap, ELSS & Nippon India small cap fund which in total becomes 25K. How many years it will take to become 1 Crore and any other suggestions towards my investment. And Occasionally I do buy some IPO's.
Ans: You are on a strong financial path by investing Rs. 25,000 per month through SIPs across various mutual funds. This shows dedication to building wealth. At 30 years old, your early start will provide a good runway for growth.

Assessing Your Goal
Target Corpus: Rs. 1 Crore

Accumulating Rs. 1 crore is a significant goal. With disciplined investing, it’s achievable.

The time to reach Rs. 1 crore depends on the average annual return of your investments. Typically, equity mutual funds can offer 12-15% returns over the long term.

Investment Horizon

If your SIPs average a return of 12% annually, it would take about 15 years to reach Rs. 1 crore.

With a higher return of 15%, you could achieve this in approximately 13 years.

These are estimates, as actual returns can vary based on market conditions and fund performance.

Evaluating Your Current Portfolio
Fund Selection

Your portfolio is diversified across small-cap, mid-cap, flexi-cap, and ELSS funds. This diversification reduces risk and increases potential returns.

However, investing in two small-cap funds (Quant Small Cap and Nippon India Small Cap) increases exposure to high-risk assets. Small-cap funds can be volatile and may not always deliver consistent returns.

Balancing Risk

Consider balancing your portfolio by reducing exposure to small-cap funds. Reallocate some investments into large-cap or hybrid funds for stability.

Flexi-cap funds offer flexibility by investing across large, mid, and small-cap stocks. This is good for balancing growth and risk.

ELSS funds not only provide tax benefits but also serve as equity investments. They are a smart choice for long-term goals.

Suggested Adjustments
Review Small-Cap Allocation

Small-cap funds offer high growth potential but with high risk. Limit your exposure to small-cap funds to around 20-25% of your total investment.

Consider reallocating a portion from small-cap funds to large-cap or hybrid funds. This will help in stabilizing your portfolio while still offering growth.

Diversify with Large-Cap or Hybrid Funds

Large-cap funds invest in well-established companies. They offer steady returns with lower risk compared to small-cap and mid-cap funds.

Hybrid funds, which invest in both equity and debt, provide a balance between risk and return. They can act as a buffer during market downturns.

Review Your Portfolio Annually

It’s important to review your portfolio annually. Make adjustments based on market performance and changes in your financial goals.

Rebalancing your portfolio ensures that it remains aligned with your risk tolerance and investment horizon.

IPO Investments
Occasional IPO Investments

IPOs can offer good returns, but they come with risks. Not all IPOs perform well post-listing, and some can be volatile.

Invest in IPOs only if you have a good understanding of the company and its growth potential.

Ensure that your IPO investments do not exceed 5-10% of your total portfolio. This limits risk while allowing you to participate in new opportunities.

Long-Term Planning
Staying the Course

Consistency is key. Continue your SIPs regularly, regardless of market conditions. This will help in rupee cost averaging and accumulating wealth over time.

Avoid the temptation to time the market or stop your SIPs during market downturns. The market will have ups and downs, but staying invested is crucial for long-term growth.

Increase SIPs Gradually

As your income grows, consider increasing your SIPs. Even a small increase in your monthly investment can significantly reduce the time needed to reach your Rs. 1 crore goal.

A 5-10% annual increase in your SIPs can help in reaching your target faster without putting too much strain on your finances.

Final Insights
Reaching Rs. 1 crore through disciplined SIPs is achievable with a diversified portfolio. Review your portfolio regularly and consider rebalancing to reduce high-risk exposure. Consistent investing, along with occasional prudent IPO investments, will help you achieve your financial goals. Stay patient and committed to your investment plan, and you will see your wealth grow over time.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 04, 2024

Asked by Anonymous - Aug 21, 2024Hindi
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Hello sir,my name is Karan. I'm 30 years old earning 55k a month. I want a corpus of 1 crore in 10 year how do i achieve that investing in sip. My monthly expense is 20k I'm investing 5k in Motilal Oswal
Ans: You are investing Rs. 10,000 every month in a children's benefit fund. Your goal is to accumulate Rs. 2 crore in 18 years. This is a significant target and needs a well-structured plan.

Understanding Your Investment Strategy
Investing in a mutual fund focused on children's education is a good start. This fund is designed for long-term goals and offers growth potential. However, it’s important to assess if your current investment will meet your target.

Estimating Future Returns
To reach Rs. 2 crore in 18 years, your investment must grow consistently. The rate of return plays a crucial role here. Most equity-focused funds aim for a return of 10-12% annually. However, these returns are not guaranteed and depend on market performance.

Power of Compounding
The concept of compounding is key to reaching your goal. When your returns are reinvested, they generate further returns, leading to exponential growth. Over 18 years, compounding can significantly boost your investment.

Monthly Investment Amount
Currently, you are investing Rs. 10,000 per month. Over 18 years, this equals Rs. 21.6 lakh in total contributions. For this to grow to Rs. 2 crore, your investments need to achieve a high rate of return.

Potential Growth Scenarios
If your investment grows at an average rate of 12% per year, reaching Rs. 2 crore is achievable. However, this assumes consistent growth and no major market downturns. Market fluctuations can impact your returns, so it's essential to stay invested for the long term.

Importance of Diversification
Relying on a single fund may not be enough to meet your goal. Diversifying your investments across different funds can spread risk and potentially enhance returns. Consider adding more funds with different investment strategies to your portfolio.

Actively Managed Funds vs. Index Funds
You’ve chosen a direct plan, which typically has lower expenses but lacks professional guidance. While this may save costs, actively managed funds, with a Certified Financial Planner (CFP) guiding you, can be more beneficial. They allow for strategic decisions to maximize returns, especially in volatile markets.

Why Direct Plans May Not Be Ideal
Direct plans are often chosen for their lower expense ratios. However, they don’t come with the personalized advice that regular plans offer through a CFP. This advice can help you navigate market changes and adjust your investments accordingly. Regular plans might have higher expenses but the professional management can help optimize returns.

Staying Disciplined with SIPs
Your SIPs (Systematic Investment Plans) provide discipline in investing. Regular investments, regardless of market conditions, help you build wealth over time. This approach reduces the impact of market volatility and keeps you on track to meet your goal.

Reviewing Your Investments Regularly
It's crucial to review your portfolio regularly. As you approach your target date, you may need to adjust your investments. Moving some of your funds to safer assets can protect your accumulated wealth.

Consider Inflation
Inflation can erode your purchasing power over time. Even if you reach Rs. 2 crore, the real value might be less than expected due to rising costs. It’s important to factor in inflation while planning your financial goals.

Adjusting Your Investment Strategy
If you find that your current investment plan may fall short, consider increasing your monthly SIP amount. Even a small increase can have a big impact over 18 years due to compounding.

Avoiding Common Investment Mistakes
It’s important to avoid common pitfalls like withdrawing your investments during market downturns. Staying invested and trusting the long-term growth potential of your funds is key to achieving your financial goals.

Final Insights
Reaching Rs. 2 crore in 18 years with a Rs. 10,000 monthly investment is possible, but not guaranteed. It requires a disciplined approach, regular reviews, and possibly an increase in your SIP amount. Working with a Certified Financial Planner can provide you with the guidance needed to navigate market changes and optimize your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Hello Madam, i am 38 year married women, having a 15year 1 kid boy ( but my husband not loving me even he is not talking with me from the last 8 years but we r leaving together due to our son, he fulfilled the need with the responsibilities of our home and our son but as wife he is not talking and even not caring to me ,but before 2 years back one married man come to talk with me he is my official colleague and we both attached a lot with each other after some days he proposed me and said that he is loving me many years ago but he thought that i am very Strick person will not response him, but now he is saying that he wants me as a life partner me also every time he treat me like a wife very much caring and loving nature now i introduce him to my family as a friend and family members also very happy with taking to him, we are from 2 year together is it good or what should i do further?
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You want to get into a relationship with a married man? Will that not complicate your already complicated life?
You certainly deserve to be loved and taken care of BUT do not jump towards a married man...you do understand that his priorities will lie with his first family and this will hurt you again and you will feel neglected AGAIN...

What is he planning with his marriage? Does his wife know about your relationship? Is he going to end his marriage and then marry you? These questions need answers and then you can decide for yourself keeping in mind that you need to take of yourself emotionally in this second association.

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Drop in: www.unfear.io
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Milind

Milind Vadjikar  |426 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

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Dear Sir, My Age is 59 and investment is as follows: Stock market 1.2 Cr MFI 2.0 Cr Expectied pension from 2026 1,4L per month House : own house Loan liability is zero Responsibility: Marriage of two sons who finished PG My question is " above fund sufficient to take over for me and my wife for next 30 year (assuming life expectancy is 90 Years) Regards Srinivasan
Ans: Hello;

You may invest 20 L in Arbitrage type of mutual fund(low risk) earmarked for marriage of your sons.

Also you may invest 3 Cr into equity savings type mutual fund (moderate risk).

After 3 years it may grow into a sum of 3.89 Cr considering modest return of 9%.

I suggest that you redeem this corpus by paying LTCG(~11 L) and buy an immediate annuity for balance corpus of 3.78 Cr from a life insurance company.

I am not recommending you to do an SWP because for your required monthly income SWP rate will have to be 4.5%+ annually and I ran this on an swp calculator which shows depleted corpus of less then 1 Cr after 30 years.

Considering annuity rate of 6% you may expect to receive monthly payment of 1.89 L(pre-tax).

Seek joint annuity for yourself and your spouse with return of purchase price to your nominees.

Some life insurers offer increasing annuity at fixed intervals to account for inflation.

Also if you shop around and negotiate you may get a better annuity rate.

Happy Investing!!

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.

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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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