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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Sep 08, 2021

Mutual Fund Expert... more
Sandhya Question by Sandhya on Sep 08, 2021Hindi
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I am 45 years old. I have not done any investment yet. Can you please guide how I can start? I can invest upto Rs 5,000 monthly.

Ans: You may start with Axis ESG Equity Fund - Growth.

 

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  |8191 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 10, 2024

Money
I am 41 Years old .I haven't done any investment yet. can you please guide how I can start. I can invest upto 5000 now.
Ans: It's fantastic that you're considering starting your investment journey now. The fact that you’ve chosen to invest Rs. 5,000 per month is a commendable first step. This amount, if invested strategically, can grow into a significant corpus over time. At 41, while you still have time before retirement, every rupee you invest now can be crucial for your financial security.

Let’s break down the best ways to start investing with a comprehensive, easy-to-follow guide.

1. Setting Clear Financial Goals
Before diving into any investment, you must define your financial goals. These goals will help you stay focused and make better decisions.

Short-term goals (1-3 years): Emergency fund, vacation, buying a gadget or small car.

Medium-term goals (3-7 years): Children's education, home renovation, etc.

Long-term goals (7+ years): Retirement planning, children's marriage, etc.

Once you know your goals, you can align your investments to meet these objectives.

2. Building an Emergency Fund
Before making any long-term investments, it is important to secure an emergency fund.

Why? This fund ensures you are financially protected if you face an unforeseen event like job loss, medical emergency, etc.

How much? You should aim for at least 6-9 months of your expenses. If your monthly expense is Rs. 40,000, your emergency fund should be Rs. 2.4-3.6 lakh.

Where? Keep this money in a liquid instrument like a bank savings account or liquid mutual fund, which provides easy access during emergencies.

3. Risk Assessment: Understanding Your Comfort Level
You need to assess your risk tolerance. Since you’re starting at age 41, your risk appetite might be moderate, balancing between safety and growth.

Low risk tolerance: Invest in safer instruments like debt mutual funds or fixed deposits.

Moderate risk tolerance: A balanced portfolio with a mix of equity and debt is ideal.

High risk tolerance: More exposure to equity mutual funds can give better long-term returns, but with higher volatility.

4. Investment Options Based on Your Profile
Now, let’s look at how you can allocate your Rs. 5,000 investment based on your goals and risk profile.

A. Equity Mutual Funds (Actively Managed)
For long-term wealth creation, equity mutual funds can play a vital role. As you’re 41, you still have time to benefit from equity investments. The key here is actively managed funds. Actively managed funds provide the expertise of fund managers who can select stocks to outperform the market.

Why not index funds? Index funds are passively managed and only mirror the market. They may not offer the potential for higher returns that actively managed funds do. An expert fund manager can navigate different market situations and outperform.

How much? Start by allocating Rs. 3,000 from your Rs. 5,000 monthly investment towards equity mutual funds. Over time, as you gain confidence and understanding, you can increase your allocation.

B. Debt Mutual Funds
Equity alone may not be enough. You should also focus on maintaining a balance with debt mutual funds. These funds are less volatile than equity, making them a safer option for capital preservation.

Why debt funds? They help in protecting your capital and reducing the risk exposure from your overall portfolio. They offer stable, but lower returns compared to equity funds.

How much? From your Rs. 5,000, allocate Rs. 1,500 towards debt mutual funds. This gives you a good balance between risk and safety.

C. Systematic Investment Plan (SIP)
SIP is the best way to invest in mutual funds. It allows you to invest a fixed amount regularly, which reduces the impact of market volatility.

Why SIP? With SIPs, you benefit from rupee-cost averaging, which means you buy more units when markets are low and fewer when they are high. This evens out market fluctuations over the long run.

How to start? You can begin your SIP with your chosen mutual fund through a trustworthy Certified Financial Planner. The benefit of regular funds through a CFP is you get the ongoing professional guidance and advice needed to make the right choices.

5. Insurance: Ensuring Protection Alongside Investments
While investments are crucial for wealth creation, insurance is essential for protection. At this stage, it’s important to ensure you have adequate coverage.

A. Life Insurance (Term Plan)
Why? A pure term plan offers a significant life cover at a very low cost. This is crucial if you have dependents or financial responsibilities.

How much? Ideally, your life cover should be 10-15 times your annual income. If you earn Rs. 5 lakh a year, you should aim for a Rs. 50-75 lakh term plan.

B. Health Insurance
Even if you’re covered under a company policy, having your own health insurance is important.

Why? Medical costs are rising, and it’s important to have a policy that covers you even after retirement or if you change jobs.

How much? A minimum health insurance cover of Rs. 10-15 lakh is recommended, which can be increased as your age and responsibilities grow.

6. Retirement Planning
Though retirement may seem distant, it’s essential to start planning now. The earlier you start, the more comfortable your retirement years will be.

How to start? If you allocate part of your Rs. 5,000 towards equity and debt mutual funds, this will automatically form part of your retirement corpus.

Why equity for retirement? Equity provides higher returns over the long term, which is crucial for building a retirement fund.

Why debt? Debt provides stability and reduces the risk as you near retirement age.

7. Reviewing and Adjusting Your Investments
Once you start your investment journey, it’s important to review your portfolio periodically. You should check your investments every 6-12 months to ensure they are aligned with your goals.

Why review? Markets change, personal circumstances evolve, and you may need to adjust your portfolio to match these changes.

How? A Certified Financial Planner can guide you in making these adjustments. Regular funds provide the added advantage of professional fund management and ongoing advice.

8. Regular Funds vs. Direct Funds: Why Choose Regular?
You might have heard about direct mutual funds. These funds allow you to invest directly with the fund house, bypassing any intermediary. However, they have their disadvantages.

Disadvantages of direct funds: Direct funds don’t offer ongoing professional advice. You’re left to manage your portfolio yourself, which can be overwhelming for many. Investing through a Certified Financial Planner ensures your portfolio is actively managed with professional oversight.

Benefits of regular funds: You get expert advice, portfolio review, and regular updates. While there is a small fee involved, the benefits far outweigh the cost in terms of professional management and support.

9. Avoid Common Pitfalls
When starting your investment journey, there are some common mistakes to avoid:

Not starting early enough: You’ve already taken a step by starting at 41, but the earlier you start, the better.

Chasing high returns: It’s easy to get lured by funds that promise high returns, but these are often risky. Stick to a balanced portfolio.

Neglecting insurance: Investments are important, but so is protection. Make sure you have adequate insurance coverage before diving deep into investments.

Finally: Stay Committed and Keep Learning
Starting your investment journey at 41 is a great step. Rs. 5,000 a month may seem small, but it can grow substantially with time and discipline. The key is to stay committed, review your portfolio regularly, and make informed decisions with the help of a Certified Financial Planner.

Be patient: Wealth creation takes time, and you’ll see the fruits of your investments over the long term.

Keep learning: Stay informed about market trends and new investment opportunities. Knowledge will help you make better decisions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8191 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

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Hi sir, I'm 27 un married , right now I have Lakhs rupee , where I have to invest, it's
Ans: Strategic Investment Options for a 27-Year-Old

Congratulations on your prudent decision to invest at such a young age. Let’s explore some strategic investment options tailored to your financial goals and risk tolerance.

Understanding Your Financial Goals
At 27, you have a valuable opportunity to build wealth over the long term. Let’s outline your goals and align them with suitable investment avenues.

Financial Goals Assessment
Short-Term Goals:

Emergency Fund: Build a contingency fund covering at least 6-12 months of living expenses.
Lifestyle Expenses: Plan for any short-term expenses like travel or personal purchases.
Medium-Term Goals:

Education or Skill Enhancement: Invest in courses or certifications to enhance your skills and career prospects.
Marriage or Home Purchase: Start saving for significant life events you anticipate in the next 5-10 years.
Long-Term Goals:

Retirement Planning: Begin building a retirement corpus to secure your financial independence in the future.
Wealth Accumulation: Invest with a long-term horizon to maximize wealth creation.
Investment Strategy
Diversified Equity Mutual Funds:

Equity mutual funds offer the potential for high returns over the long term.
Invest in a diversified portfolio of large-cap, mid-cap, and small-cap funds to spread risk.
Actively managed funds can outperform passive index funds, especially in volatile markets.
Systematic Investment Plan (SIP):

Start a SIP in equity mutual funds to benefit from rupee cost averaging and the power of compounding.
Regular monthly investments help inculcate a disciplined saving habit and reduce market timing risk.
Public Provident Fund (PPF):

Consider opening a PPF account for stable returns and tax benefits.
PPF offers attractive interest rates and tax-free returns, making it an ideal choice for long-term savings.
Risk Management
Emergency Fund:

Prioritize building an emergency fund to tackle unforeseen expenses without liquidating investments.
Park this fund in a liquid or low-risk debt instrument like a savings account or liquid mutual fund.
Insurance Coverage:

Secure yourself with adequate health insurance coverage to mitigate medical expenses.
Consider a term insurance plan to provide financial protection to your dependents in case of any unfortunate event.
Avoiding Common Pitfalls
Avoiding Impulse Decisions:

Stay disciplined and avoid impulsive investment decisions driven by market fluctuations or short-term trends.
Overlooking Asset Allocation:

Maintain a balanced asset allocation aligned with your risk tolerance and financial goals.
Rebalance your portfolio periodically to ensure it stays in line with your objectives.
Conclusion
As a 27-year-old investor, you have a long investment horizon ahead. By adopting a disciplined approach, diversifying your portfolio, and staying focused on your financial goals, you can set yourself on the path to financial success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Mayank

Mayank Chandel  |2169 Answers  |Ask -

IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Apr 05, 2025

Asked by Anonymous - Apr 04, 2025Hindi
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Hlo. Sir. Maine apna neet exam. 2024 mai diya tha. Sirf. 6 month hi preparation krke. I score well but negative marking ki wajah se. Mere mask kam hogye and maine vapis. 205 ke liye preparation Krna strt kiya ha. Without any coaching self study muje assa lg rha ha ki iss baat bhi nhi hoga. Stress ki wajah se overthinking ki wajah se mere kuch din bhut khrab hogya ha. Prr mere parents ne decide ki ha ki offline coaching krwagye. Kya muje 3 attempt ki. Jna chaiiye muje doctor hi bnna ha muje aur kuch nhi Krna ha mai bhut ache se pdh sakte hu bss ye ha ki 3 attempt dena worth it ha kya
Ans: Hello,
pehle toh main yeh kehna chahta hoon ki tumne sirf 6 mahine ki tayyari mein NEET jaise tough exam ko dene ki himmat ki — yeh kaafi badi baat hai. Tumhare andar definitely potential hai. NEET jaise exam mein negative marking sabko affect karti hai, especially jab preparation time kam ho.

Ab baat karte hain tumhare doubt par:
Kya 3rd attempt dena worth hai?
Tumhara answer tumne khud hi de diya:

"Mujhe doctor hi banna hai, mujhe aur kuch nahi karna."

Jab goal clear ho, toh answer bhi clear hota hai:
Agar doctor banna tumhara sapna hai aur tumhara belief hai ki tum mehnat kar sakte ho, toh 3rd attempt definitely worth it hai, lekin is baar smart aur structured preparation ke saath.

Offline coaching-jaise tumhare parents keh rahe hain
Agar ghar par overthinking, distractions, aur stress zyada ho raha hai, toh offline coaching environment tumhe discipline aur direction de sakta hai.
Daily study routine, regular tests, competition ka mahol — yeh sab tumhare liye helpful ho sakte hain.

Agar tumhara belief strong hai, toh koi bhi attempt waste nahi hota.
Bahut saare doctors ne 3rd, even 4th attempt me crack kiya hai. Tumhara vision clear hai, ab bas execution me discipline aur patience chahiye.

...Read more

Mayank

Mayank Chandel  |2169 Answers  |Ask -

IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Apr 05, 2025

Ramalingam

Ramalingam Kalirajan  |8191 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 05, 2025

Money
Hi sir thnku in advance. I am 28M,working in central govt job. It has just been one year and I plan on retiring very early around a 35 years of age. I have nps tier 1 account due to the job. I just have one query since I don't plan on marrying and I am alone with my own home. My expenses are max 18k per month. I hardly travel and live a very frugal life. So my query if I resign at 35 years then will 50 lakhs will sustain me for 15 years keeping in mind the inflation and my return as 7% on an average.
Ans: Your question shows rare clarity at a young age. You are just 28. But you already have a defined vision to retire by 35. That is highly appreciable. Many at this age are still unsure of financial direction.

Let us now assess your question in detail.

You asked whether Rs 50 lakhs will last 15 years, post retirement at 35.

Let us evaluate your financial journey from all angles.

Understanding Your Present Situation

You work in a central government job. That offers job security. And also an NPS Tier 1 account.

You live frugally. Your monthly expense is only Rs 18,000. That is extremely disciplined.

You have your own home. So no rent or EMI outgo. This reduces your future cost burden.

You do not plan to marry. So your financial responsibilities are only for yourself.

You plan to retire at 35. That means only 7 more years of active income.

After 35, you want Rs 50 lakhs corpus to sustain you for 15 years.

That means till age 50, you want to live from this corpus.

Now let us move step-by-step to assess sustainability.

Assessing Expense Inflation Over Time

Right now, your expense is Rs 18,000 per month.

Even a frugal person cannot avoid inflation.

Prices of food, electricity, health, etc. will go up.

Inflation over 15 years cannot be ignored.

Even if inflation is modest, say 6%, your expense will rise gradually.

By year 10 or 15, your Rs 18,000 monthly expense may double.

That will need a higher withdrawal from your corpus.

So corpus sustainability depends on how inflation is planned for.

Evaluating Return Assumption

You assume 7% average return on corpus.

This is realistic if money is well invested.

You must avoid only FDs or savings accounts.

To get 7% post-tax, proper asset allocation is needed.

Mutual funds can help here.

Especially, actively managed funds with a Certified Financial Planner.

Avoid index funds. They just copy the index.

Index funds do not give downside protection in bear markets.

They also underperform during volatile sideways markets.

Index funds have no fund manager taking active decisions.

Whereas actively managed funds adapt to market cycles.

A qualified CFP can help select suitable active funds.

Regular plans through a CFP give ongoing guidance.

Direct funds may look cheaper, but lack this support.

Direct funds are like self-medication. Risky without expert view.

Regular plans have a small fee, but offer long-term peace.

Corpus Withdrawal Planning

Your Rs 50 lakh must support monthly cash flow.

Even if you start withdrawing Rs 18,000 monthly, over time it will increase.

You need a withdrawal strategy.

You can follow a staggered withdrawal.

That means only taking what is needed each year.

Rest of the money keeps earning.

It also helps reduce tax burden.

But you must track how much you withdraw each year.

And ensure it grows in line with inflation.

If not planned well, corpus may finish earlier.

So withdrawal plan should be dynamic, not fixed.

A Certified Financial Planner can help prepare such a roadmap.

Emergency and Health Preparedness

You are alone. That means no support system in emergencies.

You must keep some contingency fund aside.

At least 12 months of expenses, i.e., about Rs 2.5 lakhs.

This should be liquid. Like in sweep-in FDs or ultra-short debt funds.

Also, ensure you have a strong health insurance policy.

Healthcare cost rises faster than inflation.

Even a single surgery or hospitalisation can dent your corpus.

Do not rely on employer health cover post resignation.

Buy your own health insurance before retirement.

Choose Rs 20–30 lakh cover. Preferably with a super top-up.

Keep paying its premium from a separate health corpus if needed.

If you stay healthy and insurance unused, that is a blessing.

But if not, it will safeguard your financial independence.

Psychological Readiness for Early Retirement

Financial numbers are only part of the journey.

Are you ready for non-financial changes post-retirement?

How will you keep yourself engaged from age 35 to 50?

No daily job, no team, no deadlines. That may feel strange.

Mental health and social belonging are also essential.

Plan for what you will do post retirement.

Hobbies, part-time work, teaching, or creative work.

Something that gives meaning to your day.

Else early retirement may feel empty after some years.

Personal fulfilment is important, not just financial planning.

Tax Implication of Your Investments

Returns from equity mutual funds have a new rule.

Long-term capital gain (LTCG) above Rs 1.25 lakh taxed at 12.5%.

Short-term gains (STCG) are taxed at 20%.

This affects how you redeem funds.

Withdraw strategically to reduce tax.

Do not withdraw large amounts in one go unless needed.

Spread withdrawals over financial years.

Plan investments so equity and debt are balanced.

This helps with tax and market stability.

NPS Tier 1 – How It Helps

You already have NPS Tier 1 account.

You can continue it even after quitting job.

But withdrawals are restricted before age 60.

You can withdraw only 20% before 60 if not annuitised.

So it may not be useful for your 35–50 needs.

But it can be your backup after 60.

So continue it. Don’t touch now.

Let it grow. It adds to your retirement safety.

It cannot be your main retirement plan for early years.

How You Should Build Rs 50 Lakh Corpus

You have 7 years left to save.

That is a short horizon for such a big goal.

You must save aggressively now.

Keep lifestyle minimal, as you already are doing.

Avoid unnecessary gadgets, dining, or gadgets.

Every rupee saved now compounds for your future.

Invest in a well-planned mutual fund portfolio.

Include large cap, mid cap, and flexi cap funds.

Avoid thematic or sectoral funds. Too risky for main corpus.

Also add short-duration debt funds for stability.

Review this plan once a year with your CFP.

Increase SIPs with each salary hike.

Also allocate your yearly bonus fully into investments.

Rs 50 lakh target is tough but possible with discipline.

Asset Allocation Approach

Corpus should not be 100% in equity or 100% in debt.

A balanced approach is better.

Early years of retirement can bear some equity.

Later years should gradually shift to debt.

This is called glide path strategy.

Helps avoid sequence of returns risk.

If market crashes in year 1 or 2, your corpus shrinks fast.

So first 3 years’ expenses should be in debt.

Remaining in equity-debt mix as per risk profile.

Rebalancing is important each year.

Do not ignore this step.

It controls risk and improves return consistency.

Finally

Rs 50 lakhs can last for 15 years if:

You invest it wisely.

Withdraw in a disciplined way.

Factor in inflation, taxes, and health cost.

Keep emergency corpus aside.

Stay insured for health and critical illness.

Engage yourself meaningfully post-retirement.

Review your plan annually with a Certified Financial Planner.

Early retirement is not a one-time plan.

It is a living strategy that needs updates.

You are on the right path.

Stay focused. Stay simple.

And always seek guidance when needed.

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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