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Ramalingam

Ramalingam Kalirajan  |6326 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2023

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
PRADEEP Question by PRADEEP on Apr 27, 2023Hindi
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I am 44 now and planning to retire by 60 I have One Boy with age 12. Need suggestion on investment planning on their education and my retirement income at the age of 60. please advice accordingly?

Ans: Please do SIP in 2-3 good equity mutual funds.
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  |6326 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 16, 2024

Asked by Anonymous - Jul 24, 2023Hindi
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Hi I am 47 year old male, need to plan for my retirement and savings for my children 2, aged 8 and 10. Can invest 1.5 l per month. please guide me on where and how much to nvest with time lines
Ans: Given your age and goals, a balanced approach focusing on retirement and children's education is essential. Here's a suggested investment strategy:

Retirement Planning (60% - 70%): Allocate a significant portion towards retirement corpus. Invest in a mix of equity mutual funds, NPS, and PPF to maximize returns and tax benefits.

Children's Education (20% - 30%): Set aside funds for your children's education in equity or balanced mutual funds. Consider starting an SIP in a child education plan or dedicated mutual funds.

Emergency Fund (5% - 10%): Maintain an emergency fund in a liquid or short-term debt fund equivalent to 3-6 months of expenses.

Asset Allocation: Ensure diversification across asset classes to mitigate risks. Rebalance portfolio periodically to align with goals and risk tolerance.

Time Lines:

Short-Term (1-3 years): Focus on building emergency fund and investing in debt or balanced funds for stability.

Medium-Term (4-10 years): Increase equity exposure for higher returns. Continue SIPs and review portfolio annually.

Long-Term (10+ years): Gradually shift towards debt and more stable investments as retirement approaches. Ensure children's education funds are invested in growth-oriented assets.

Consult a financial advisor for personalized advice tailored to your needs and goals. Regular review and adjustments are essential to stay on track.

..Read more

Ramalingam

Ramalingam Kalirajan  |6326 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 2024

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I am 39 year old and spouse is 35 also working New to investment expect few ploicie advice some investment plan for kids educational and retirement plans Thank you
Ans: Congratulations on taking the first step towards securing your family's financial future. As a Certified Financial Planner, I understand the importance of creating a tailored investment plan that aligns with your goals and aspirations. Let's delve into crafting a comprehensive financial roadmap for you and your loved ones.

Understanding Your Financial Goals
Before diving into specific investment strategies, it's crucial to understand your unique financial goals and aspirations. Whether it's planning for your children's education or securing a comfortable retirement, each objective requires a customized approach.

Planning for Your Children's Education
Investing in your children's education is a priority for most parents. To ensure you're adequately prepared, consider setting up a systematic investment plan (SIP) in diversified equity mutual funds. These funds offer the potential for higher returns over the long term, helping you build a substantial corpus for your children's future education expenses.

Securing Your Retirement
As you plan for retirement, it's essential to adopt a diversified investment approach that balances risk and return. While direct equity investments can offer lucrative returns, they come with higher volatility and require active management. Alternatively, opting for professionally managed mutual funds through a Certified Financial Planner can provide you with access to a diversified portfolio tailored to your risk tolerance and retirement goals.

Evaluating Investment Options
When exploring investment avenues, it's crucial to weigh the pros and cons of each option. While index funds may seem appealing due to their lower fees, they lack the potential for outperformance seen in actively managed funds. Actively managed funds, on the other hand, offer the expertise of fund managers who actively seek opportunities to maximize returns and mitigate risks.

Navigating the Investment Landscape
Navigating the investment landscape can be daunting, especially for newcomers. By partnering with a Certified Financial Planner, you gain access to personalized guidance and expertise tailored to your financial needs. A CFP can help you make informed investment decisions, optimize your portfolio, and stay on track towards achieving your long-term financial objectives.

Conclusion
In summary, crafting a comprehensive financial plan requires a thorough understanding of your goals, risk tolerance, and investment options. By leveraging the expertise of a Certified Financial Planner and adopting a diversified investment approach, you can build a secure financial future for you and your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6326 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 09, 2024

Asked by Anonymous - Jun 08, 2024Hindi
Money
I am 45 years earning 2.1laf per month and investment is 20K per month MF since last six months. PPF(18 lakhs) NpS(7Lakhs)and HDFC policy (9 lakhs) and PF 38 lakhs are my savings still today. I have 2 twin boys studying 2nd standard. Please suggest investment plan for my son's education and retirement plan.
Ans: Understanding Your Financial Position
First, let me appreciate your disciplined approach to saving and investing. You earn Rs. 2.1 lakh per month and already invest Rs. 20,000 per month in mutual funds. Your existing savings in PPF (Rs. 18 lakhs), NPS (Rs. 7 lakhs), an HDFC policy (Rs. 9 lakhs), and PF (Rs. 38 lakhs) are commendable. This demonstrates a strong foundation for future financial goals, including your sons' education and your retirement.

Evaluating Your Current Investments
Your current investments provide a mix of safety, tax benefits, and potential growth. Here’s a breakdown:

Public Provident Fund (PPF): With Rs. 18 lakhs, PPF offers tax-free returns and safety. However, its long lock-in period limits liquidity.

National Pension System (NPS): With Rs. 7 lakhs, NPS is good for retirement due to its low-cost structure and tax benefits. But, it's not very liquid and has some equity market exposure.

HDFC Policy: The Rs. 9 lakhs in the HDFC policy should be carefully reviewed. Often, investment-cum-insurance policies offer lower returns due to high charges. You might consider surrendering this policy and reallocating the funds to higher-yielding investments.

Provident Fund (PF): Your PF savings of Rs. 38 lakhs are a solid, risk-free investment with decent returns and tax benefits. This forms a crucial part of your retirement corpus.

Investment Plan for Your Sons' Education
Given your sons are in 2nd standard, you have around 15 years before they start higher education. This time frame allows for a balanced investment strategy that maximises growth while managing risk. Here’s a structured plan:

Step 1: Estimating Future Education Costs
Education costs are rising, and it's crucial to estimate future expenses accurately. Assuming an annual inflation rate of 6% for education costs, let’s calculate the future cost of a four-year course.

Let's assume the current cost of a good quality higher education is around Rs. 10 lakhs per year.

Using the formula for compound interest, Future Value (FV) = Present Value (PV) * (1 + r)^n

Where:

PV = Rs. 10 lakhs
r = 6% (0.06)
n = 15 years
FV = 10,00,000 * (1 + 0.06)^15 = Rs. 23,96,000 approximately per year

For a four-year course, you will need roughly Rs. 95,84,000 for each son, totalling Rs. 1.92 crores.

Step 2: Investment Strategy
Systematic Investment Plan (SIP) in Mutual Funds: Continue your current SIPs and gradually increase them as your income grows. Actively managed funds can offer better returns compared to index funds, as professional fund managers aim to outperform the market.

Diversification: Spread investments across large-cap, mid-cap, and small-cap funds. This will balance risk and growth potential.

Equity-Oriented Child Plans: Consider mutual fund schemes specifically designed for children's future needs. These plans often have a lock-in period, ensuring disciplined saving.

Sukanya Samriddhi Yojana (SSY): If your sons were daughters, SSY would be an excellent choice for secure, tax-free returns. Instead, look for similar secure options tailored for boys.

Regular Review: Monitor the performance of your investments annually. Adjust the portfolio based on market conditions and changing financial goals.

Retirement Planning
Retirement planning requires a detailed assessment of future expenses, inflation, and life expectancy. Given your current age of 45, you likely have 15-20 years before retirement. Here’s a structured approach:

Step 1: Estimating Retirement Corpus
Estimate your monthly expenses post-retirement. Assuming your current monthly expense is Rs. 1 lakh, and you expect to maintain the same lifestyle:

Consider an inflation rate of 6%.

Using the formula for compound interest, FV = PV * (1 + r)^n

Where:

PV = Rs. 1 lakh
r = 6% (0.06)
n = 20 years (till retirement)
FV = 1,00,000 * (1 + 0.06)^20 = Rs. 3,21,000 approximately per month

You’ll need to plan for at least 20 years post-retirement. Thus, your annual requirement would be Rs. 3.21 lakhs * 12 = Rs. 38.52 lakhs.

For 20 years, considering the inflation-adjusted returns, you will need a significant corpus.

Step 2: Building the Corpus
Increase Contributions to NPS: Enhance your NPS contributions to benefit from its long-term growth and tax benefits. Diversify your NPS portfolio to include a balanced mix of equity, corporate bonds, and government securities.

Mutual Funds: Continue with SIPs in diversified mutual funds. Increase the amount periodically. Actively managed funds with a focus on blue-chip stocks can offer stability and growth.

Public Provident Fund (PPF): Continue contributing to PPF for its tax-free, secure returns. The long-term nature of PPF aligns well with retirement goals.

Employee Provident Fund (EPF): Maintain and possibly increase your EPF contributions if feasible. EPF offers risk-free, decent returns and is a cornerstone of retirement planning.

Health Insurance: Ensure you have adequate health insurance. Medical costs can erode your savings significantly. A robust health insurance plan safeguards your retirement corpus.

Step 3: Adjusting Investment Strategy
Reduce Equity Exposure Gradually: As you near retirement, gradually shift from equity to debt funds. This reduces risk and ensures capital preservation.

Diversify: Include debt funds, balanced funds, and government bonds in your portfolio. This provides stability and regular income post-retirement.

Review and Rebalance: Regularly review your portfolio. Rebalance it to maintain the desired asset allocation and adjust for market changes and personal financial goals.

Benefits of Investing Through Certified Financial Planners
Opting for regular funds through a Certified Financial Planner (CFP) has several benefits over direct funds:

Professional Guidance: A CFP provides expert advice tailored to your financial goals, risk tolerance, and time horizon.

Regular Monitoring: CFPs monitor your portfolio regularly, making necessary adjustments to optimise returns and manage risks.

Comprehensive Planning: CFPs offer holistic financial planning, considering all aspects of your financial life, including taxes, insurance, and estate planning.

Behavioural Coaching: A CFP helps you stay disciplined and avoid emotional investment decisions, which can be detrimental to long-term goals.

Administrative Support: Managing investments can be complex. A CFP handles the paperwork, compliance, and administrative tasks, allowing you to focus on your life and career.

Final Insights
Your disciplined saving and investing habits are commendable. With a well-structured plan, you can comfortably achieve your sons' education and your retirement goals. Focus on increasing your investments gradually, diversifying your portfolio, and seeking professional guidance to optimise returns and manage risks. Remember, regular reviews and adjustments to your financial plan are crucial to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6326 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 2024

Asked by Anonymous - Jul 23, 2024Hindi
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Hi Sir, i am 32 year married female, with 3 year old son. Me and my husband together earn 3lakh per month. We have an an fd of 60 lakhs, have 3 properties in the city worth 2cr. Having 15 lakhs in gold. We have no EMI to pay. We live own house. I am planning to retire by the age of 45. Can you suggest how should i invest for financial freedom and future educational needs of my son
Ans: You and your husband earn Rs 3 lakh per month. You have Rs 60 lakhs in fixed deposits, 3 properties worth Rs 2 crores, and Rs 15 lakhs in gold. You have no EMIs and live in your own house.

You plan to retire by age 45.

You also need to plan for your son's future educational needs.

Assessing Your Retirement Goal
Current Age and Retirement Age

You are 32 years old and plan to retire at 45.
You have 13 years to build a retirement corpus.
Monthly Expenses After Retirement

Estimate your monthly expenses post-retirement.
Consider inflation to project future costs accurately.
Investment Strategy for Financial Freedom
Diversified Portfolio

Diversify your investments across different asset classes.
Consider a mix of equity, debt, and gold.
Equity Investments

Invest in equity funds for long-term growth.
Actively managed funds can provide better returns than index funds.
Consult a Certified Financial Planner to select the best funds.
Systematic Investment Plan (SIP)

Start a SIP in equity funds.
This will help in disciplined investing and averaging out market volatility.
Debt Investments

Invest in debt funds for stability and regular income.
Debt funds are less volatile and provide steady returns.
Gold Investments

Continue holding gold as part of your portfolio.
Gold acts as a hedge against inflation.
Planning for Your Son’s Education
Education Fund

Estimate the future cost of education.
Consider inflation in your calculations.
Dedicated SIP

Start a dedicated SIP for your son’s education.
Invest in a mix of equity and debt funds for balanced growth.
Education Loans

Keep education loans as a backup option.
They can provide financial flexibility without burdening your savings.
Regular Monitoring and Adjustments
Portfolio Review

Review your portfolio every 6 months.
Adjust your investments based on performance.
Rebalancing

Rebalance your portfolio to maintain the desired asset allocation.
This helps in managing risk and optimizing returns.
Additional Tips
Emergency Fund

Maintain an emergency fund covering 6-12 months of expenses.
This ensures liquidity without touching your investments.
Tax Planning

Consider tax implications of your investments.
Utilize tax-saving instruments where possible.
Insurance

Ensure you have adequate life and health insurance.
This protects your family from unforeseen financial burdens.
Final Insights
Your goal to retire by 45 is ambitious but achievable with disciplined planning. Diversify your investments and start SIPs in equity and debt funds. Focus on long-term growth while balancing risk. Regularly review and adjust your portfolio. Plan a dedicated fund for your son’s education. Consult a Certified Financial Planner for personalized advice. This strategy will help you achieve financial freedom and secure your son's future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Milind

Milind Vadjikar  |150 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Sep 17, 2024

Asked by Anonymous - Sep 10, 2024Hindi
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Hi, I am 56 with a take home salary of about 5L per month and expect to retire in 4 years. I have about 1.2 cr in PF+PPF and 4 properties worth 2.5Cr. Cash in hand 40L and equity worth 25L. From Jan24, investing about 2L per month in MF + Shares + others and wish to continue to next 4 years. Daughter is working and likely to get married in next 2 years (anticipate a spend of 35L). Son will join MBBS in 2 years with expected fee of 30L per year. Have no loans and well covered for mediclaim and term insurance. Am i covered for the expenses? Please suggest ...
Ans: Hello;

Your PF+PPF balance you can keep untouched so it may grow into a corpus of 1.6 Cr(7.5% growth rate assumed) + regular contributions over 4 years, at the end of your work life.

At your age I recommend you to resist temptation of dealing in direct stocks or even pure equity mutual funds due to the very high risk of volatility.

I propose you to put 30 L(6 month pay coverage) as emergency fund in ICICI Pru Liquid fund(Best returns on 6M criteria)+ facility of instant redemption upto 50K & balance T+1 working day.

10 L balance from cash in hand + 25 L of stock holdings could be invested in Tata money market debt fund(best returns on 1 year criteria). Both these funds have moderate & low to moderate risk profile respectively. This will serve as your corpus for daughter's marriage and grow for 2 years in the meanwhile.

The 2L investment per month which you have began from Jan-24 is expected to go into MF sip+ direct stocks+ other.

For the other investment you are the best judge but here again I would humbly appeal to you to avoid equity MFs and direct stocks considering your age and high risks associated with these asset type direct exposure.

I propose you to invest in equity savings fund instead which are less riskier then pure equity funds and can yield decent return too. I recommend two funds in this category with best returns on 5 yr criteria & AUM above 1K Cr. Mirae Asset equity savings fund and Kotak equity savings fund.

A 2 L sip into these two funds for 4 years will yield a corpus of 1.16 Cr (Modest return of 9% considered). This will fully cover the cost of education for your son.

The best aspect of your financial planning which I admire and respect is No loans, well covered for mediclaim, term insurance and investment in real estate.

I have given my opinion, ultimately you are the best judge.

Feel free to revert in case of any query.

You may follow us on X at @mars_invest for updates

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

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Dr Dipankar

Dr Dipankar Dutta  |609 Answers  |Ask -

Tech Careers and Skill Development Expert - Answered on Sep 17, 2024

Asked by Anonymous - Sep 17, 2024Hindi
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Sir I am btech - industrial biotechnology (4 years ) student. Now I'm in 3 rd year . My family financial situations didn't ain't me study msc or mtech or going abroad. So.. I'm planning to work hard for an year to get government job in my biotech field. However, biotech in india is just in it's initial stages . I didn't find good jobs in biotech industry for graduates and I even google many times about this concern. Could you please guide me ? What are best rated - government and private jobs in biotechnology field for biotech graduates ? I want each of jobs list If not any other alternatives ? What are the entrance exams I can appear for mtech pursuing at free of cost in India ? Is there any entrance exams to get a govt job in biotech field for graduates ? I'm bothered with many quests???????? I'm so... Worried about my career . Hope I'll get my answers from your team as soon as possible Thank you ????
Ans: Biotechnology graduates can apply for various positions in government organizations, research institutes, and labs. Below are some of the key government organizations where biotechnology graduates can find jobs:

Government Organizations:
Department of Biotechnology (DBT)
Council of Scientific and Industrial Research (CSIR)
Indian Council of Medical Research (ICMR)
National Institute of Immunology (NII)
All India Institute of Medical Sciences (AIIMS)
Biotech Consortium India Limited (BCIL)
Food Safety and Standards Authority of India (FSSAI)
Indian Institute of Technology (IITs) as technical assistants or lab technicians
Central Drugs Standard Control Organization (CDSCO)
Defense Research and Development Organization (DRDO)
Public sector units (PSUs) like Bharat Immunologicals and Biologicals Corporation Limited (BIBCOL)

Key Entrance Exams:
GATE (Graduate Aptitude Test in Engineering): Scores in the Biotechnology paper can help you get into prestigious institutes like IITs and NITs for M.Tech with scholarships.
DBT JRF BET: Provides a fellowship to pursue a PhD in biotechnology.
ICMR JRF: For research fellowship and PhD positions.
CSIR UGC NET: For lectureships and research in biotechnology.
JNU CEEB: For postgraduate programs in biotechnology across many universities in India.

...Read more

Milind

Milind Vadjikar  |150 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Sep 17, 2024

Asked by Anonymous - Sep 09, 2024Hindi
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Hi I am 44 years old working for almost 21years now. I have accumulated close to1.6Cr of corpus through diversified portfolio in FD, MF, Stocks etc. I am undergoing health issue post recovery from a major illness and not able to mentally and physically cope up with the demand of the Job which is paying me around 2.5L/Month. I want to settle for a less demanding job even at 50% lesser salary. With my current corpus how to invest it so that i get a monthly interest to maintain my current lifestyle without reducing my corpus.
Ans: You can buy immediate annuity from an insurance company for your corpus of 1.6 Cr as joint holding by you and your spouse and return of purchase price to you, your spouse or nominee either after completion of tenure or expiry of the annuity holder/s.

Assuming modest rate of 6% will yield you a monthly income of 80K per month(pre-tax).

You can always negotiate and shop to get a better rate for your annuity.

If you suppliment this with low stress, less exertion job at 50% of your current salary you will have monthly income of 1.25 L + 0.8L = 2.05 L per month.

Although annuity rates are typically lower you can lock them for a longer tenure.

Most companies or banks offer 5 year FDs.

Few do offer 10 year FDs but then you have TDS deducted at 10% from your interest payout. Also FDs are not entirely risk free.

In case of annuity TDS is not deducted, so far, since tax liability is with the annuity holder.

Please do take care of your health and wish you speedy recovery.

In case you any other concerns, feel free to revert.

...Read more

Milind

Milind Vadjikar  |150 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Sep 17, 2024

Asked by Anonymous - Sep 17, 2024Hindi
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Sir, I had invested in HDFC Sanchay Plus in Long-Term Income Plan. It was a insurance and regular income plan for a period of 30 years. I paid up for five years as mandated by the policy. The pay out would commence from 7th year annually upto 30 years. The principal amount would be paid on completion of 30th year of enrollment. I appears the return of investment was less than 5% and diminishes further with time. I decided to withdraw from the scheme however the HDFC Life is deducting a huge sum from the invested amount. I requested to atleast return the principal amount invested without any add-on. But HDFC Life is referring to the policy clause and declining to return the invested amount. How can I retrieve the invested amount in this scenario. Thanking you in anticipation.
Ans: Most of the people make this mistake of considering insurance coupled with investment as good combination. The fact that insurance regulator allows insurance companies to use words such as "Guaranteed", "Assured" which entice gullible investors, makes things more difficult.

Endowment or money back policies never yield return over 5 to 6%.

Even ULIP policy returns above a threshold will now be subject to long term capital gain tax apart from fund management, policy administration and other heavy charges during first 5 years.

Insurance is for pure protection hence term insurance with appropriate riders is best option.

Unfortunately there is no way you can seek higher surrender value payment because you are contractually obligated by the terms and conditions of the policy agreement.

...Read more

Milind

Milind Vadjikar  |150 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Sep 17, 2024

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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