Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 27, 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 - May 25, 2024Hindi
Listen
Money

am now 42 year old I don't have Any investment till now just started 4 month below I want to retire after 10 years but I want fund should reach atleast 2.50cr how much should I invest more and my below funds are ok to continue I can take risk canara Rabeco equity Hybrid fund regular plan growth 5000 month ICICI Prudential equity &Debt Fund growth. 11000 month Mirai Asset Emerging Bluechip fund Growth 2500 month Motilal Oswal Midcap fund regular growth 10000 month Nippon india Large cap fund Growth 10000 month Nippon India Small Cap fund Growth 15000 month Quant Active Fund growth 11000 month SBI Large & Midcap Fund regular growth 7500 month Tata digital India fund regular growth 6500 month Nippon multiCap 15000

Ans: Evaluating Your Investment Plan
You have started investing recently and aim to retire in 10 years with a corpus of Rs 2.50 crores. You are currently investing in several mutual funds. Let’s assess your current investment strategy and determine how much more you need to invest to achieve your goal.

Current Investment Contributions
Your current investments per month are as follows:

Canara Rabeco Equity Hybrid Fund: Rs 5,000
ICICI Prudential Equity & Debt Fund: Rs 11,000
Mirai Asset Emerging Bluechip Fund: Rs 2,500
Motilal Oswal Midcap Fund: Rs 10,000
Nippon India Large Cap Fund: Rs 10,000
Nippon India Small Cap Fund: Rs 15,000
Quant Active Fund: Rs 11,000
SBI Large & Midcap Fund: Rs 7,500
Tata Digital India Fund: Rs 6,500
Nippon MultiCap: Rs 15,000
Total Monthly Investment
Your total monthly investment is Rs 93,000.

Risk Tolerance and Investment Horizon
Given your risk tolerance and 10-year horizon, equity investments are suitable. However, it’s essential to have a balanced portfolio to mitigate risks.

Assessing Fund Choices
Hybrid Funds: These funds balance between equity and debt, reducing volatility. However, they might not provide the highest returns.

Equity & Debt Funds: These also balance risk and return but focus more on equity.

Large Cap Funds: These funds are less volatile and suitable for stable growth.

Mid Cap and Small Cap Funds: These have higher growth potential but are more volatile.

Digital India Fund: This sector-specific fund focuses on technology, which is high-risk but potentially high-reward.

MultiCap Funds: These funds diversify across large, mid, and small cap stocks, balancing risk and return.

Recommendation for Asset Allocation
Diversification: Ensure your investments are diversified across various sectors and market capitalizations.

Balance Risk: Balance your high-risk investments with safer, more stable options.

Regular Review: Regularly review and adjust your portfolio based on market conditions and performance.

Calculating Future Corpus
To reach Rs 2.50 crores in 10 years, you need an effective strategy. Assuming an average annual return of 12%, let’s calculate the required monthly investment.

Required Monthly Investment
Based on a 12% annual return, you might need to invest approximately Rs 1,00,000 to Rs 1,10,000 per month to reach your goal. This is an estimate and actual returns may vary.

Steps to Achieve Your Goal
Increase SIP Amount: Consider increasing your SIP contributions by Rs 7,000 to Rs 17,000 per month.

Review Fund Performance: Regularly review the performance of your funds. Replace underperforming funds with better options.

Consult a Certified Financial Planner: Periodic consultation with a CFP can help you stay on track.

Advantages of Actively Managed Funds
Professional Management: Actively managed funds benefit from professional fund managers’ expertise.

Market Opportunities: Fund managers can exploit market opportunities for higher returns.

Risk Management: Active funds often have strategies to manage and mitigate risks.

Disadvantages of Index Funds
Limited Returns: Index funds aim to match the market, not outperform it.

No Flexibility: They lack the flexibility to react to market changes quickly.

Benefits of Regular Funds via MFD with CFP Credential
Expert Advice: Regular funds offer access to expert advice and financial planning.

Better Performance: These funds often outperform direct funds due to professional management.

Comprehensive Planning: Investing through a CFP ensures a holistic approach to financial planning.

Conclusion
Your investment strategy is on the right track. With a few adjustments and increased contributions, you can achieve your retirement goal. Regular reviews and professional guidance will ensure you stay on course.

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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

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

Asked by Anonymous - May 25, 2024Hindi
Listen
Money
am now 42 year old I don't have Any investment till now just started 4 month below I want to retire after 10 years but I want fund should reach atleast 2.50cr how much should I invest more and my below funds are ok to continue I can take risk canara Rabeco equity Hybrid fund regular plan growth 5000 month ICICI Prudential equity &Debt Fund growth. 11000 month Mirai Asset Emerging Bluechip fund Growth 2500 month Motilal Oswal Midcap fund regular growth 10000 month Nippon india Large cap fund Growth 10000 month Nippon India Small Cap fund Growth 15000 month Quant Active Fund growth 11000 month SBI Large & Midcap Fund regular growth 7500 month Tata digital India fund regular growth 6500 month Nippon multiCap 15000
Ans: Evaluating Your Investment Plan
You have started investing recently and aim to retire in 10 years with a corpus of Rs 2.50 crores. You are currently investing in several mutual funds. Let’s assess your current investment strategy and determine how much more you need to invest to achieve your goal.

Current Investment Contributions
Your current investments per month are as follows:

Canara Rabeco Equity Hybrid Fund: Rs 5,000
ICICI Prudential Equity & Debt Fund: Rs 11,000
Mirai Asset Emerging Bluechip Fund: Rs 2,500
Motilal Oswal Midcap Fund: Rs 10,000
Nippon India Large Cap Fund: Rs 10,000
Nippon India Small Cap Fund: Rs 15,000
Quant Active Fund: Rs 11,000
SBI Large & Midcap Fund: Rs 7,500
Tata Digital India Fund: Rs 6,500
Nippon MultiCap: Rs 15,000
Total Monthly Investment
Your total monthly investment is Rs 93,000.

Risk Tolerance and Investment Horizon
Given your risk tolerance and 10-year horizon, equity investments are suitable. However, it’s essential to have a balanced portfolio to mitigate risks.

Assessing Fund Choices
Hybrid Funds: These funds balance between equity and debt, reducing volatility. However, they might not provide the highest returns.

Equity & Debt Funds: These also balance risk and return but focus more on equity.

Large Cap Funds: These funds are less volatile and suitable for stable growth.

Mid Cap and Small Cap Funds: These have higher growth potential but are more volatile.

Digital India Fund: This sector-specific fund focuses on technology, which is high-risk but potentially high-reward.

MultiCap Funds: These funds diversify across large, mid, and small cap stocks, balancing risk and return.

Recommendation for Asset Allocation
Diversification: Ensure your investments are diversified across various sectors and market capitalizations.

Balance Risk: Balance your high-risk investments with safer, more stable options.

Regular Review: Regularly review and adjust your portfolio based on market conditions and performance.

Calculating Future Corpus
To reach Rs 2.50 crores in 10 years, you need an effective strategy. Assuming an average annual return of 12%, let’s calculate the required monthly investment.

Required Monthly Investment
Based on a 12% annual return, you might need to invest approximately Rs 1,00,000 to Rs 1,10,000 per month to reach your goal. This is an estimate and actual returns may vary.

Steps to Achieve Your Goal
Increase SIP Amount: Consider increasing your SIP contributions by Rs 7,000 to Rs 17,000 per month.

Review Fund Performance: Regularly review the performance of your funds. Replace underperforming funds with better options.

Consult a Certified Financial Planner: Periodic consultation with a CFP can help you stay on track.

Advantages of Actively Managed Funds
Professional Management: Actively managed funds benefit from professional fund managers’ expertise.

Market Opportunities: Fund managers can exploit market opportunities for higher returns.

Risk Management: Active funds often have strategies to manage and mitigate risks.

Disadvantages of Index Funds
Limited Returns: Index funds aim to match the market, not outperform it.

No Flexibility: They lack the flexibility to react to market changes quickly.

Benefits of Regular Funds via MFD with CFP Credential
Expert Advice: Regular funds offer access to expert advice and financial planning.

Better Performance: These funds often outperform direct funds due to professional management.

Comprehensive Planning: Investing through a CFP ensures a holistic approach to financial planning.

Conclusion
Your investment strategy is on the right track. With a few adjustments and increased contributions, you can achieve your retirement goal. Regular reviews and professional guidance will ensure you stay on course.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 25, 2024

Asked by Anonymous - May 25, 2024Hindi
Money
Hi Vivek am now 42 year old I don't have Any investment till now just started 4 month below I want to retire after 10 years but I want fund should reach atleast 2.50cr how much should I invest more and my below funds are ok to continue I can take risk canara Rabeco equity Hybrid fund regular plan growth 5000 month ICICI Prudential equity &Debt Fund growth. 11000 month Mirai Asset Emerging Bluechip fund Growth 2500 month Motilal Oswal Midcap fund regular growth 10000 month Nippon india Large cap fund Growth 10000 month Nippon India Small Cap fund Growth 15000 month Quant Active Fund growth 11000 month SBI Large & Midcap Fund regular growth 7500 month Tata digital India fund regular growth 6500 month Nippon multiCap 15000
Ans: Analyzing Your Current Investment Portfolio

You have taken the first steps toward a secure retirement by starting your investments. It’s commendable that you are willing to take risks for potentially higher returns. Your current portfolio comprises a mix of equity, hybrid, midcap, large cap, small cap, and multicap funds. This diversification is a good strategy, but let's see how you can optimize it further.

Current Investment Strategy

Your monthly investment in different funds totals Rs 94,000. Given your risk appetite, your portfolio’s focus on equity funds can help achieve higher returns. Each fund category serves a different purpose, from stability to growth, balancing risks and rewards.

Required Monthly Investment to Achieve Your Goal

To reach a target of Rs 2.50 crore in 10 years, considering an expected annual return of around 12%, you need to evaluate your current investment amount. While Rs 94,000 is a substantial contribution, a precise calculation with a financial tool would confirm if additional investment is necessary. Generally, with a higher equity exposure, achieving a 12% return over a decade is feasible.

Assessing and Optimizing Fund Allocation

Equity Hybrid Fund

These funds balance risk and return by investing in both equity and debt instruments. They provide stability in volatile markets, ensuring steady growth over time.

Equity & Debt Fund

Similar to hybrid funds, these offer a balanced approach, mitigating risks associated with pure equity funds. They are ideal for long-term goals, blending growth with safety.

Emerging Bluechip and Midcap Funds

These funds invest in companies with high growth potential. They are riskier but can offer substantial returns, suitable for aggressive investors like you.

Large Cap and Small Cap Funds

Large cap funds invest in well-established companies, offering stability and moderate returns. Small cap funds, though riskier, provide high growth potential. Combining both creates a balanced risk profile.

Multicap Fund

Multicap funds diversify across various market caps, balancing risk and returns effectively. They provide a mix of stability from large caps and growth from mid and small caps.

Sector Funds: Disadvantages

While sector funds, like the Digital India Fund in your portfolio, can offer high growth potential, they come with certain disadvantages:

High Risk: Sector funds are highly volatile as they depend on the performance of a specific sector. If the sector underperforms, the fund's value can decline significantly.

Lack of Diversification: These funds invest in a single sector, leading to concentrated risk. Unlike diversified funds, poor performance in the chosen sector can lead to substantial losses.

Market Timing: Successfully investing in sector funds requires precise market timing, which is challenging even for seasoned investors. Misjudging market trends can lead to poor investment outcomes.

Economic Cycles: Sector funds are highly sensitive to economic cycles. In a downturn, sector-specific investments can be hit hard, while diversified funds can better weather economic fluctuations.

Regulatory Risks: Sector funds are also subject to regulatory changes. For example, government policies affecting the IT sector can impact a Digital India Fund negatively.

Complementing Existing Investments

To further strengthen your portfolio, consider increasing investments in underrepresented sectors or categories. Ensure you review and adjust your portfolio periodically, aligning it with market conditions and personal financial goals.

Continuous Monitoring and Rebalancing

Investment strategies should evolve with market trends and personal circumstances. Regularly monitor fund performance and rebalance your portfolio annually. This ensures your investments remain aligned with your retirement goals.

Consulting with a Certified Financial Planner

Working with a Certified Financial Planner (CFP) can help optimize your investment strategy. They offer tailored advice, helping you navigate market fluctuations and adjust your portfolio accordingly.

Final Thoughts

Your proactive approach to securing your retirement is admirable. By maintaining a disciplined investment strategy and continuously optimizing your portfolio, achieving your Rs 2.50 crore goal is within reach. Stay committed and periodically review your investments for the best outcomes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

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

Asked by Anonymous - May 12, 2025
Money
I am 38 years old and self-employed, earning an average of 1.8 to 2 lakhs per month. I have a home loan of 44 lakhs (EMI is 46,000, tenure 15 years). There is no other liabilities. My investments include 11 lakhs in mutual funds, 3 lakhs in fixed deposits, and 1.5 lakh in gold. Should I focus on prepaying the home loan given my irregular income, or keep my investments intact and continue with EMIs?
Ans: You are doing quite well, especially with your investments and controlled liabilities. Your financial discipline is truly appreciable.

You are 38, self-employed, with Rs.1.8 to 2 lakhs monthly income.
Your current home loan is Rs.44 lakhs with EMI of Rs.46,000 for 15 years.
You have Rs.11 lakhs in mutual funds, Rs.3 lakhs in FDs, and Rs.1.5 lakhs in gold.
Your income is irregular, but you have no other liabilities.

Let us now do a 360-degree evaluation of whether to prepay the loan or stay invested.

 

Step-by-Step Financial Assessment
1. Evaluate the Stability of Your Income First
You earn between Rs.1.8 to Rs.2 lakhs per month.

 

But income is irregular. That needs caution.

 

Loan EMI is Rs.46,000 — about 25% of your average income.

 

If income drops in any month, EMI pressure will increase.

 

So we must first ensure EMI is always affordable, without stress.

 

Hence, liquidity is more important for you right now than aggressive loan prepayment.

 

2. Evaluate Your Emergency Reserve
You have Rs.3 lakhs in FD and Rs.1.5 lakhs in gold.

 

That makes it Rs.4.5 lakhs total liquid safety.

 

Your EMI is Rs.46,000, and personal expenses will also be there.

 

Ideal emergency fund for you = 6 to 9 months of expenses + EMI.

 

That is around Rs.6 to Rs.8 lakhs minimum.

 

So current emergency fund is slightly lower than ideal.

 

Please don’t use this for loan prepayment now.

 

3. Assess the Role of Mutual Funds
You have Rs.11 lakhs in mutual funds. That’s a solid step.

Now let’s assess whether to redeem this and prepay loan.

 

Should You Redeem Mutual Funds to Prepay?
Mutual funds, over long term, give better post-tax return than loan savings.

 

Loan interest is 8% to 9%, whereas mutual funds can give 11–13% in long term.

 

Especially if funds are equity-oriented and held for 5+ years.

 

You will also get capital gains tax exemption on Rs.1.25 lakhs LTCG annually.

 

If you redeem funds, you lose growth potential and compounding.

 

That hurts long-term wealth building.

 

So, do not redeem the entire Rs.11 lakhs in mutual funds.

 

4. Disadvantage of Early Loan Prepayment in Your Case
Prepaying early will reduce interest over time, yes.

 

But you may run into cash flow stress in slow months.

 

Once money is used to prepay, it cannot be taken back easily.

 

Liquidity once lost = flexibility lost.

 

Also, income tax benefit under Section 24(b) gets reduced if loan balance drops.

 

So it’s better to maintain balance between repayment and investment.

 

5. Best Strategy for You – A Balanced Approach
Let’s now craft the best plan for you.

 

Maintain Strong Liquidity First
Keep FD and gold untouched.

 

Increase emergency fund to at least Rs.6–Rs.7 lakhs.

 

For that, set aside extra Rs.2.5–Rs.3 lakhs from savings over time.

 

This makes your EMI safe even in low-income months.

 

Continue Your Mutual Fund SIPs Without Stopping
SIPs give long-term growth and beat loan interest in most cases.

 

Don’t stop mutual fund investments to prepay loan.

 

Stay invested. Let wealth compound.

 

Start Small and Periodic Prepayments
Don’t do bulk prepayment now. Do systematic small prepayments.

 

For example, Rs.25,000 to Rs.50,000 extra every 3–4 months.

 

When income is higher, use that surplus to prepay in parts.

 

Target 1–2 bulk part-payments per year.

 

This reduces tenure and interest slowly, without affecting liquidity.

 

Track Your Loan Amortisation Every 6 Months
Use netbanking or get a fresh loan statement every 6 months.

 

Check how each prepayment is reducing principal.

 

Adjust your strategy accordingly.

 

Avoid One-Time Full Prepayment
That would kill your long-term investment compounding.

 

Also removes your income tax benefit under Section 24(b).

 

Stay flexible. You are self-employed.

 

You need cash buffers more than salaried people.

 

Final Insights
Do not do bulk home loan prepayment from mutual funds now.

 

Keep SIPs going and maintain your compounding.

 

Grow your emergency fund to Rs.6–7 lakhs minimum.

 

Use surplus months to make small part-payments towards home loan.

 

This protects your peace and builds wealth at the same time.

 

Reassess in 2–3 years. You may be able to prepay more later.

 

You are already in a good financial position. Your thoughtful approach is praiseworthy.

 

Best Regards,
 
K. Ramalingam, MBA, CFP,
 
Chief Financial Planner,
 
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

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

Money
i wish to purchase new car i10, should i purchase the same through own money or should i take a vehicle loan from bank and the money own by my to be kept as FDR or liquid mutual fund
Ans: It’s a good sign that you’re thinking before buying a car. You’re not rushing into it. That shows maturity and smart thinking.

We will now evaluate own money vs vehicle loan — from every angle.

 

Understanding the Nature of a Car Purchase
A car is not an investment.

 

It is a consumption asset, not a growth asset.

 

It depreciates every year. Its value goes down, not up.

 

So the cheaper the total cost, the better for your wealth.

 

Option 1: Use Own Money Fully
Pros

No interest cost. You save on total expenses.

 

You are free from monthly EMI pressure.

 

Car becomes fully yours from day one.

 

No need to deal with bank, forms, hypothecation etc.

 

Cons

Your liquid money reduces.

 

You may not have enough cash for emergencies.

 

Opportunity loss if you had invested that money.

 

Option 2: Take Vehicle Loan & Keep Own Money in FDR or Liquid Mutual Fund
Let’s evaluate this with care.

Vehicle Loan Pros

You can preserve your savings for emergencies.

 

EMI can be budgeted monthly, if income is stable.

 

Some banks offer competitive interest rates.

 

Vehicle Loan Cons

You will pay interest on a depreciating item.

 

Loan adds to your monthly obligations.

 

You must pay insurance, EMI, fuel, and service together.

 

FDR and Liquid Mutual Funds give lower returns than loan cost.

 

So you will likely lose more in interest than you gain.

 

Let's Compare: Interest Rate vs Investment Return
Vehicle loan interest is usually 9% to 11% per year.

 

FDR gives around 6% to 7% before tax.

 

Liquid mutual funds give 6% to 7.5% on average.

 

So you pay more to the bank than you earn from investment.

 

Tax on interest or gains reduces actual return further.

 

This means taking a car loan and investing your own money leads to net loss.

 

Best Option for You: Smart Compromise Approach
Let me share a wise solution.

 

Don’t use full own money. Don’t take full loan either.

 

Instead, pay 70–80% from own funds.

 

Take a small car loan for the remaining 20–30% only.

 

This keeps EMI low and retains some liquidity.

 

You reduce interest cost and also keep Rs.50,000–Rs.1 lakh aside.

 

Park that in liquid fund for any urgent need.

 

Repay this small loan fast in 1–2 years.

 

Only Take a Car Loan If:
Your job income is stable.

 

You already have 3–6 months emergency fund ready.

 

You don’t have big loans running now.

 

You can pay EMI without affecting savings.

 

You commit to close the loan early.

 

Avoid This Mistake:
Never buy a more expensive car because loan makes it “feel affordable.”

 

Loan should not expand your car budget.

 

Whether you buy with loan or cash, pick a simple car within limits.

 

i10 is a wise, middle-ground choice. Good thought.

 

Tax Angle (If Business Use)
If you are using the car for business, vehicle loan interest may be tax-deductible.

 

But for personal use, there is no tax benefit.

 

So do not take loan just for imagined tax saving.

 

Final Insights
A car is a need, not an investment.

 

Using your own money fully keeps things simple and cheap.

 

Taking a full car loan and investing the money gives net negative return.

 

Best option is a split approach — pay major part from own funds.

 

Take small loan only if needed and close it early.

 

Always keep emergency money aside before buying.

 

Avoid emotional buying or overbudget cars.

 

Your financially balanced approach is very appreciable.

 

Best Regards,
 
K. Ramalingam, MBA, CFP,
 
Chief Financial Planner,
 
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Anu

Anu Krishna  |1600 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on May 12, 2025

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x