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Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 11, 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
Chirosunder Question by Chirosunder on Apr 26, 2024Hindi
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I am 36 years old. i want to invest rs. 7500 per month for 12 years to get per month rs. 20 thousand as a pension scheme. can you give me a suggestion where should i invest?

Ans: Your aspiration for a pension scheme is commendable, and it's wise to plan for your future financial security at an early age. Considering your age and investment horizon of 12 years, let's explore suitable options to achieve your goal.

Given your preference for a monthly pension of Rs. 20,000, you would need to accumulate a significant corpus over the investment period to ensure a sustainable income stream post-retirement.

While traditional pension plans and annuities offer guaranteed income, they may not provide optimal returns considering inflation and taxation. Additionally, they often lack flexibility and liquidity.

Instead, you may consider investing in a combination of mutual funds and other growth-oriented assets to build a substantial corpus over time. Equity-oriented mutual funds have historically delivered higher returns compared to traditional investment avenues, making them suitable for long-term wealth creation.

You can allocate a portion of your monthly investment towards equity mutual funds, which offer the potential for capital appreciation over the long term. To mitigate risk, diversify your portfolio across large-cap, mid-cap, and multi-cap funds based on your risk tolerance and investment objectives.

Simultaneously, consider investing in debt mutual funds or fixed-income instruments to provide stability and generate regular income post-retirement. These investments can serve as a source of passive income to supplement your pension.

Moreover, systematic investment planning (SIP) allows you to invest a fixed amount regularly, ensuring discipline and consistency in your investment approach. By staying invested over the long term and leveraging the power of compounding, you can potentially achieve your desired pension goal.

However, it's crucial to periodically review your investment strategy and make necessary adjustments based on changing market conditions and your evolving financial goals.

In conclusion, by adopting a diversified investment approach tailored to your risk profile and investment horizon, you can work towards realizing your goal of a monthly pension of Rs. 20,000. Consider consulting with a Certified Financial Planner for personalized advice and guidance to optimize your investment strategy.

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  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 2024

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I am 35 and have a monthly income of 50000 and my savings are zero and all my commitment are cleared. I am ready to invest 12000 per month for the next 25 years. Can u please suggest how and where to invest.
Ans: At 35, with a monthly income of Rs. 50,000 and no current savings, you have a great opportunity to start building your financial future. Investing Rs. 12,000 per month over the next 25 years can help you achieve significant wealth. Here’s a detailed plan to guide your investments.

Investment Strategy
1. Diversified Portfolio:

Equity Mutual Funds: These funds have the potential for high returns over the long term.
Debt Mutual Funds: These funds provide stability and lower risk.
Gold: A small portion in gold can act as a hedge against inflation.
Fixed Deposits: While they offer lower returns, they add safety to your portfolio.
2. Systematic Investment Plan (SIP):

SIPs help in disciplined investing.
They average out market volatility over time.
Investing Rs. 12,000 monthly through SIPs will ensure regular and consistent investments.
Recommended Allocation
Equity Mutual Funds:

Allocate 60% of your investment to equity mutual funds.
This equals Rs. 7,200 per month.
Choose a mix of large-cap, mid-cap, and small-cap funds for diversification.
Debt Mutual Funds:

Allocate 20% to debt mutual funds.
This equals Rs. 2,400 per month.
These funds provide stability and reduce overall portfolio risk.
Gold:

Allocate 10% to gold.
This equals Rs. 1,200 per month.
Invest through gold bonds or gold ETFs.
Fixed Deposits:

Allocate 10% to fixed deposits.
This equals Rs. 1,200 per month.
This provides a safety net and liquidity.
Step-by-Step Plan
1. Start with Emergency Fund:

Build an emergency fund to cover 6 months of expenses.
Use your fixed deposit allocation to build this fund initially.
2. Begin SIPs:

Set up SIPs for equity mutual funds, debt mutual funds, and gold.
Automate your investments to ensure consistency.
3. Review and Adjust:

Review your portfolio every six months.
Adjust your allocations based on performance and market conditions.
4. Increase Investment Over Time:

Aim to increase your monthly investment by 5-10% annually.
This helps in countering inflation and increasing wealth.
Choosing the Right Funds
Equity Mutual Funds:

Look for funds with a consistent track record.
Choose funds managed by experienced fund managers.
Diversify across different sectors and market capitalizations.
Debt Mutual Funds:

Opt for funds with lower credit risk.
Look for funds that invest in high-quality debt instruments.
Consider funds with a good track record of stable returns.
Gold Investments:

Prefer sovereign gold bonds for better returns.
Gold ETFs offer liquidity and ease of investment.
Additional Tips
1. Tax Planning:

Utilize tax-saving mutual funds (ELSS) for tax benefits.
ELSS funds have a lock-in period of three years but offer tax deductions.
2. Financial Discipline:

Avoid withdrawing from your investments prematurely.
Stick to your investment plan regardless of market fluctuations.
3. Knowledge and Awareness:

Stay informed about market trends and financial news.
Consider consulting a Certified Financial Planner for personalized advice.
Final Insights
Starting your investment journey at 35 with a disciplined approach can yield significant returns over 25 years. Diversify your portfolio across equity, debt, gold, and fixed deposits to balance risk and reward. Regularly review and adjust your investments to stay on track with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 22, 2025

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sir my monthly income is approx 50000 expense around 35000 can invest 10000 per month my age is 39 F can invest till 10 years for minimum dont have any specific goals just want to have a decent amount at the time of retirement no loan or liability as of now kindly advise with specific MF /Shares /LIC where to invest
Ans: At 39, you have no loans or liabilities.

Monthly income is Rs. 50,000, with Rs. 10,000 available for investment.

You aim to build a retirement corpus over 10 years.

Recommended Savings and Investments
Equity Mutual Funds
Allocate 60% of your Rs. 10,000 to equity mutual funds.

Equity mutual funds provide long-term growth and inflation-beating returns.

Invest through SIPs for disciplined and consistent investments.

Actively managed funds offer higher returns than index funds over the long term.

Hybrid Mutual Funds
Allocate 20% of your investment to hybrid mutual funds.

These funds offer a mix of equity and debt for moderate growth.

They reduce the risk of market volatility.

Debt Mutual Funds
Allocate 10% to debt mutual funds for stability and short-term needs.

Debt funds are safer than equity and provide consistent returns.

Use these for medium-term goals or emergencies.

Public Provident Fund (PPF)
Invest 10% of your monthly amount in PPF.

PPF offers tax-free returns and secure long-term growth.

It is an excellent addition to equity and debt investments.

Importance of Regular Reviews
Review your portfolio every year to track performance.

Adjust investments based on market conditions and life changes.

Rebalance to maintain the right mix of equity and debt.

Build an Emergency Fund
Save 3-6 months of expenses in a liquid fund or savings account.

This protects you from financial stress during emergencies.

Health and Life Insurance
Ensure adequate health insurance for yourself.

Get a term life insurance policy if you have dependents.

Avoid Common Pitfalls
Do not invest in real estate for retirement planning.

Avoid index funds and ETFs due to their lack of active management.

Stay away from ULIPs or investment-cum-insurance products.

Tax Planning for Investments
Use tax-saving instruments under Section 80C, like PPF or ELSS.

Track the new tax rules for mutual fund capital gains.

Consult a Certified Financial Planner for personalised tax advice.

Finally
Start a SIP of Rs. 10,000 across equity, hybrid, and debt mutual funds.

Add PPF for tax-free and stable returns.

Review your plan yearly and increase SIPs as income grows.

Focus on disciplined savings and diversification for a secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 12, 2025

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investing 10 lakhs in Mutual Funds: what fund option should I consider for 3 Years?
Ans: Investing for three years requires balancing returns and safety. Your choice should depend on risk tolerance, taxation, and liquidity needs.

Key Factors to Consider
A three-year horizon is short for equity investments.
Volatility in equities can impact returns if markets decline near redemption.
Debt funds provide stability but may have lower returns than equity funds.
Hybrid funds balance risk and returns better than pure equity or debt funds.
Taxation on mutual funds should be considered before making a choice.
Investment Options Based on Risk Profile
For Conservative Investors
Capital safety is a priority for conservative investors.
Debt mutual funds are suitable due to lower risk.
Short-duration and corporate bond funds offer better returns than fixed deposits.
Dynamic bond funds can work if comfortable with some interest rate risk.
Returns may be lower, but capital protection is higher.
For Moderate Investors
A mix of debt and equity is ideal.
Hybrid funds help balance stability and growth.
Aggressive hybrid funds invest around 65% in equity and 35% in debt.
Conservative hybrid funds invest more in debt and less in equity.
These funds can generate better returns than pure debt funds.
For Aggressive Investors
Equity funds can provide higher returns but come with risk.
Large-cap or flexi-cap funds are better than mid-cap or small-cap for three years.
Equity savings funds reduce risk by holding debt and arbitrage components.
Investors should be ready for short-term volatility in equity investments.
A systematic withdrawal plan (SWP) after three years can help manage risks.
Mutual Fund Taxation for 3-Year Investment
Equity fund LTCG above Rs. 1.25 lakh is taxed at 12.5%.
Equity STCG is taxed at 20%.
Debt funds are taxed as per the investor’s income tax slab.
Hybrid funds taxation depends on their equity component.
Investors in high tax brackets may prefer equity-oriented funds for tax efficiency.
Regular Funds vs Direct Funds
Regular funds provide Certified Financial Planner (CFP) support and expert guidance.
Direct funds may appear cheaper but lack personalized financial advice.
Market conditions change, and professional guidance helps navigate investments.
Investors often make emotional decisions, which a CFP helps avoid.
Long-term returns may be higher with proper advisory support.
Actively Managed Funds vs Index Funds
Actively managed funds aim to beat market returns.
Fund managers adjust portfolios based on market conditions.
Index funds simply follow market indices and lack flexibility.
Actively managed funds can protect during market downturns.
A three-year horizon does not favor passive investing due to short-term volatility.
When to Choose a Systematic Investment Plan (SIP)
A lump sum investment is ideal when markets are low.
SIP helps reduce risk in volatile markets.
If investing in equity or hybrid funds, staggered investment through SIP can help.
Debt funds are better suited for lump sum investments.
SWP can be used for gradual withdrawal after three years.
Liquidity and Exit Strategy
Some funds have exit loads if redeemed before a certain period.
Hybrid and debt funds often have lower exit loads than equity funds.
Ensure liquidity by choosing funds with flexible redemption options.
Plan redemptions at least 3-6 months before the end of the investment period.
Final Insights
Debt funds are safer for conservative investors.
Hybrid funds offer a balance of risk and reward.
Equity funds suit aggressive investors but require risk tolerance.
Mutual fund taxation should be considered before investing.
Regular funds with CFP guidance provide better long-term benefits.
Would you like help in selecting specific categories within these options?

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 12, 2025

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Hi Team, I have been investing 5percent of my sip in Nasdaq but now unable to do sip. Could you please let me know whichother mf house are accepting sip for global investment
Ans: It seems you were investing in Nasdaq through a mutual fund SIP but are now unable to continue. You are looking for mutual fund houses that still accept SIPs for global investments.

There are multiple factors to consider before continuing with global investments.

Understanding Restrictions on Global SIPs
Many mutual funds had to pause fresh investments in international schemes.
This was due to regulatory restrictions on overseas investment limits.
Some fund houses have reopened investments, but availability changes frequently.
The acceptance of SIPs depends on whether they have room within the limits.
Mutual Fund Houses Offering Global Investments
Some Indian fund houses continue to accept SIPs for international funds.
They may invest in US markets, European markets, or emerging economies.
Some focus on technology stocks, while others cover broader sectors.
The availability of SIPs can change based on fund house policies.
You should check with the fund house or an expert before investing.
Should You Continue Global Investments?
The US market has given strong returns in the long term.
However, global investing comes with risks like currency fluctuations.
The rupee’s movement against the dollar impacts your returns.
The US market is expensive compared to Indian equities.
Diversification is good, but overexposure to a single market is risky.
Actively Managed Funds vs Index Funds
Many global funds track indices like Nasdaq or S&P 500.
Index funds may seem cost-effective, but they lack flexibility.
Actively managed global funds adjust portfolios based on market conditions.
Professional fund managers help manage risks in different economies.
Actively managed funds can outperform during market downturns.
Evaluating Your Investment Strategy
If you were investing 5% in Nasdaq, consider how it fits your overall plan.
Stopping SIPs should not disrupt your long-term goals.
If you cannot continue, ensure other investments balance your portfolio.
Look for options that align with your risk appetite and investment horizon.
Taxation of Global Mutual Funds
Global equity funds are taxed like debt funds.
There is no benefit of lower taxation like domestic equity funds.
Gains are taxed based on your income tax slab.
If you hold for more than three years, taxation remains the same.
Keep tax efficiency in mind while choosing investment options.
What Should You Do Next?
Check with mutual fund houses about SIP availability in global schemes.
If SIP is unavailable, you can still invest through lump sum when the window opens.
Consider balancing global and Indian investments for better diversification.
Review your financial plan to ensure your goals stay on track.
Finally
Investing in global markets can be beneficial, but not without risks.
Active management is preferable over index-based global funds.
Ensure you are aware of taxation before investing.
Focus on a diversified portfolio instead of chasing one market.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 12, 2025

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I HAVE RECIEVED A SUM OF RS 10 LACS FROM FRIEND TO PURCHASE A HOUSE - HE HAS STATED I CAN RETURN MONEY AFTER MY DAUGHTER IS EARNING ENOUGH MONEY TO REPAY . I HAVE NOT BEEN FILING RETURNS SINCE I DONT HAVE TAXABLE INCOME . SHOULD I FILE I T RETURN FOR THIS AMOUNT - UNDER WHICH HEAD OF INCOME WILL I HAVE TO SHOW - SHOULD I MENTION IT AS GIFT OR LOAN
Ans: You have received Rs. 10 lakh from a friend for purchasing a house. The friend has stated that you can return it when your daughter starts earning. Since you have not been filing tax returns, let’s assess whether you should file a return and how to declare this amount.

Is Filing an ITR Necessary?
You don’t have taxable income, so filing is usually not required.
However, Rs. 10 lakh in your account can attract scrutiny.
To avoid future issues, filing an ITR is advisable.
It helps maintain transparency with the tax department.
How to Declare This Amount?
This is not a gift because a gift from a friend is taxable if above Rs. 50,000.
It is best to treat this as a loan.
Loans from friends do not attract tax but should be documented.
Declaring It Under the Right Income Head
A personal loan is not income, so it does not fall under "Income from Other Sources."
It is not taxable, but should be disclosed as "Loan Taken" in the balance sheet section of ITR.
If interest is paid on the loan, that interest will be taxable for the lender.
Steps to Ensure No Future Tax Issues
Keep a written agreement mentioning the loan terms.
The agreement should mention that repayment will be made after your daughter starts earning.
Ideally, the friend should transfer funds through a bank and not in cash.
If the tax department questions the transaction, you can show this agreement.
Final Insights
Filing an ITR is recommended for clarity.
Declare the amount as a loan, not a gift.
Maintain proper documentation to avoid future issues.
Ensure transactions happen through a bank for transparency.


Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 12, 2025

Asked by Anonymous - Feb 02, 2025Hindi
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I am an employee. My company pays my rent amount to my house owners account. the amount is 9000. but my house rent is 4900 and I asked to return the remaining amount to return to me. My house owner is a senior citizen and has 5 houses. remaining houses pay rent in cash. He said I get taxed on the amount so I am deducting the tax amount. I feel he is cheating me in the name of tax. please help me in this issue.
Ans: Your house owner is deducting tax from the extra rent you asked him to return. It is important to assess whether this is a fair deduction or if he is keeping a part of your money unfairly.

Understanding Taxation on Rental Income
Your house owner is a senior citizen and has five rental properties.
He receives rent from other tenants in cash, which may not be reported as income.
The rent he receives from you is directly deposited into his bank account. This means it is officially recorded.
He may be liable to pay tax on this recorded income.
Why Is He Deducting Tax?
If he is filing income tax returns properly, he should pay tax on total rental income.
The tax he pays depends on his total income, including all rental earnings.
If he has no other income, rental income is taxed as per his slab.
If his total taxable income exceeds the exemption limit, tax is applicable.
Assessing If He Is Cheating You
Your employer is paying Rs 9,000 rent, but your actual rent is Rs 4,900.
The extra Rs 4,100 should be returned to you in full.
He is deducting a tax amount before refunding, which raises concerns.
The tax rate he claims to deduct should be verified.
If he is keeping a significant portion, he may be misusing tax as a reason.
Steps to Verify the Tax Deduction
Ask him to provide a written explanation of the tax deduction.
Request a receipt or breakdown of how much tax he is paying on rental income.
Check his income tax return (if he agrees) to see if he is genuinely paying tax.
If he is hesitant, he may be deducting more than required.
What Can You Do?
Ask your employer to pay only Rs 4,900 directly to him instead of Rs 9,000.
If the employer insists on paying Rs 9,000, ask for an official agreement with the owner.
Clarify in the agreement that extra rent paid will be refunded without deductions.
If he refuses, inform him that you will consult a tax expert.
You can also ask him to show proof of tax paid on the deducted amount.
Handling This in a Legal Way
There is no rule that allows a landlord to deduct tax from refunded rent.
Rental income tax is the landlord’s responsibility, not yours.
He should pay tax on his total income, not on your refund.
If he is deducting an unusually high amount, it is unfair.
Alternative Options
Consider renting a different house where the rent payment process is straightforward.
If your employer allows, request them to revise the rent agreement.
Check if your company can provide a direct reimbursement to you instead.
Final Insights
Your landlord is responsible for paying tax on his rental income.
He cannot deduct tax from the amount he is refunding to you.
If he insists on deducting tax, ask for proof and clarification.
If he refuses to return the full extra amount, he may be misusing tax as an excuse.
You can take steps to ensure you receive the rightful refund.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 12, 2025

Asked by Anonymous - Feb 01, 2025Hindi
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I am 30 male. Working in Mumbai in BFSI sector. My in hand salary is 67k. Looking to start investement for retirement. Please suggest if NPS would be good option. If there is any fund which is similar to NPS can suggest as well. Looking to start with 10k as beginning. Also please suggest if the NPS in tier 1 can help in tax saving as well.
Ans: Your decision to start investing early for retirement is excellent. At 30, you have time to build a strong corpus.

Let’s assess if NPS is a good choice.

Understanding NPS for Retirement
NPS is a government-backed retirement scheme.
It invests in equity, corporate bonds, and government securities.
You can choose an active or auto allocation strategy.
Tier 1 NPS is locked until retirement.
60% of maturity value is tax-free. The rest must be used for an annuity.
Tax Benefits of NPS
Contributions under Section 80CCD(1) are part of Rs. 1.5 lakh limit.
Extra Rs. 50,000 deduction is available under Section 80CCD(1B).
Employer contribution is tax-free under Section 80CCD(2).
Annuity payouts after retirement are taxable.
Limitations of NPS
NPS has restrictions on withdrawals before retirement.
Equity exposure is capped at 75%, reducing long-term growth potential.
Returns depend on market conditions and fund manager performance.
40% mandatory annuity purchase reduces liquidity at retirement.
Alternative Investment Options
Mutual funds offer better flexibility and growth potential.
Actively managed equity funds outperform index-based options.
Midcap and flexi-cap funds provide long-term capital appreciation.
Hybrid funds balance risk and return for stability.
Portfolio Strategy for Retirement
A mix of equity and debt ensures a stable corpus.
Invest through SIPs to reduce market timing risks.
Increase allocation as income grows.
Keep a mix of large, mid, and small-cap funds.
Avoid over-reliance on any single investment product.
Final Insights
NPS is good for disciplined retirement savings.
Tax benefits are attractive, but liquidity is limited.
Mutual funds offer better long-term growth and flexibility.
A combination of both can work well for retirement planning.
Increase investment gradually as salary increases.


Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 12, 2025

Asked by Anonymous - Feb 07, 2025Hindi
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I am planning to invest monthly 10,000 in nifty ETF, 10,000Motilal Oswal NASDAQ 100 ETF, 8000 in Axis Midcap fund, 6,000 in Tata small cap Fund, 3,000 in SBI innovation Fund, 3000 in Tata consumer fund, 3,000 in Tata nifty 200 alpha 30 fund and 2,000 in Motilal oswal nifty 500 momentum 50 fund. I am planning to invest for next 25 years for my daughter's education and marriage. My risk appetite is high. Is above strategy or funds are good for maximum return? I am planning to deploy more whenever market corrects and hold investment for 25 years, will it work for maximize portfolio return over long run?
Ans: Your long-term investment plan is well-structured. It is good to see a disciplined approach.

Investing for 25 years can generate significant wealth. But fund selection and strategy must be optimized.

Let’s analyse your portfolio.

Investment Horizon and Risk Appetite
You plan to invest for 25 years. This is ideal for wealth creation.
Your risk appetite is high. This allows you to invest aggressively.
Long-term investing reduces market volatility impact.
Staying invested through market cycles is key.
Issues with ETF Investments
You plan to invest in Nifty and Nasdaq ETFs.
ETFs follow an index and lack active management.
No fund manager works to generate extra returns.
Active funds can outperform during different market cycles.
ETFs do not adjust to changing market conditions.
Expense ratio is low, but returns are also market-linked.
Actively managed funds have delivered better long-term returns in India.
Fund Selection Analysis
Your portfolio has midcap, small-cap, innovation, consumer, and factor-based funds.
Midcap and small-cap funds provide high growth. But they are volatile.
Innovation and sectoral funds focus on specific themes. These funds carry high risk.
Factor-based funds follow a strategy like momentum or alpha. Performance varies in different market conditions.
Portfolio lacks a strong large-cap or flexi-cap fund. These provide stability.
Diversification and Balance
Portfolio is highly tilted towards high-risk funds.
Lack of a flexi-cap fund may impact risk-adjusted returns.
Large-cap funds give stability in market downturns.
A mix of large, mid, and small-cap funds creates a balanced portfolio.
Too many thematic and factor-based funds increase unpredictability.
Market Timing Strategy
Deploying more in corrections can increase returns.
But market corrections are unpredictable.
Staggered investments through SIPs and STPs work better.
Avoid lump sum investments unless valuations are very attractive.
Portfolio Optimisation Recommendations
Reduce exposure to index ETFs. Shift to actively managed large-cap or flexi-cap funds.
Keep midcap and small-cap allocation but balance with a flexi-cap fund.
Reduce allocation to thematic and factor-based funds. These should be only 10-15% of your portfolio.
Ensure a strong large-cap or flexi-cap presence for stability.
Maintain liquidity for market corrections, but do not try to time the market aggressively.
Final Insights
Your investment horizon and discipline are strengths.
Portfolio needs better balance between growth and stability.
Actively managed funds can generate better long-term returns than index ETFs.
Midcap and small-cap exposure should be paired with large-cap stability.
Market timing should be done cautiously to avoid overexposure in corrections.


Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 12, 2025

Asked by Anonymous - Jan 29, 2025Hindi
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I am 26 years old female i just got job with salary 60K monthly i dont have savings i need financial security how can I invest once job start
Ans: You are starting your financial journey at the right time. Your early investments will create long-term security. A structured approach will help you achieve financial freedom.

Below is a complete guide for your financial planning.

Step 1: Build an Emergency Fund
Keep at least 6 months' expenses as a safety net.
Save Rs 1.5 lakhs in a high-interest savings account or liquid fund.
This fund protects you in case of unexpected expenses.
Step 2: Get the Right Insurance
Buy a Rs 1 crore term insurance plan.
Get a Rs 10 lakh health insurance policy.
Choose a separate accidental cover for added protection.
Step 3: Plan Your Expenses and Budget
Track your spending for better financial control.
Save at least 40% of your salary every month.
Keep fixed expenses like rent and EMI within 30% of your income.
Step 4: Start Investing for Wealth Growth
Begin a SIP in actively managed mutual funds.
Avoid index funds as they lack flexibility in market changes.
Invest in a mix of large-cap, mid-cap, and flexi-cap funds.
Step 5: Plan for Tax Savings
Use Section 80C to reduce taxable income.
Invest in PPF or ELSS mutual funds for tax benefits.
Consider NPS for additional deductions under Section 80CCD(1B).
Step 6: Avoid Common Financial Mistakes
Do not buy ULIPs or endowment plans.
Avoid unnecessary credit card debt.
Do not invest all money in fixed deposits.
Step 7: Set Long-Term Financial Goals
Plan for a home purchase after 5-7 years.
Start investing early for retirement.
Increase your SIPs as your salary grows.
Finally
Focus on financial discipline from day one.
Keep a mix of equity and debt investments.
Review your portfolio every 6 months.
If you follow these steps, you will achieve financial security.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7946 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 12, 2025

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I am 42 yrs working in a PSU Bank. Service left is 18 yrs. Corpus is 60 lacs in NPS tier 1 and 2. Wife is housewife. 2 children 11 and 5. Have medical issues. Loan is 1.20 crore with 2 houses worth 4 crore. How much corpus i require if i plan for a premature retirement at 50 yrs. Thank you
Ans: Your goal of retiring at 50 is achievable. But it needs careful planning.

Your current situation has many factors to consider.

Let’s go step by step.

Existing Financial Position
NPS Tier 1 and 2 Corpus: Rs. 60 lakh
Loan Outstanding: Rs. 1.2 crore
House Value: Rs. 4 crore
Wife’s Income: None
Children’s Age: 11 and 5
Service Left: 18 years (Retirement at 60)
Medical Issues: Important to plan for healthcare expenses
Key Challenges in Early Retirement
You will retire at 50 but need income for 40+ years.
Loan repayment is a big commitment.
Children’s education expenses will rise.
Medical costs may increase in the future.
Your pension from NPS will start at 60.
Corpus Required for Early Retirement
Your annual expenses after retirement must be estimated.
Inflation will increase your costs every year.
Children’s education and other future needs must be considered.
A corpus should generate monthly income while keeping pace with inflation.
A rough estimate suggests you may need Rs. 5-6 crore.

Loan Management Before Retirement
Try to repay or reduce the Rs. 1.2 crore loan before retiring.
High loan liability will put pressure on your corpus.
Using rental income (if any) can help in repayment.
Partial loan prepayment every year will reduce interest burden.
Investment Strategy
NPS will give pension after 60, but you need income from 50-60.
Keep a mix of equity and debt investments for steady income.
Have 5-7 years’ expenses in low-risk instruments.
The rest should be in well-managed mutual funds for growth.
Medical Planning
You must have sufficient health insurance.
Set aside Rs. 25-30 lakh for medical emergencies.
If possible, buy super top-up insurance for additional coverage.
Children’s Education and Future Planning
Major expenses for education will come after your retirement.
Plan a separate corpus for higher education.
Avoid using retirement corpus for children’s expenses.
Final Insights
Retiring at 50 is possible but requires a bigger corpus.
Your priority should be loan repayment.
Medical costs and children’s education must be planned separately.
A structured withdrawal and investment strategy is essential.
A target corpus of Rs. 5-6 crore would give more financial security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...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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