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Ramalingam Kalirajan |10879 Answers |Ask -Follow

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

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 - Aug 06, 2025Hindi

I am 46. I have 2 houses in my home town worth 2.3 crores, two tiny flats in BLR 2 crores and together they give a rent of 120K rent. Additionally, i have 5 crores worth of land in my hometown. I have a debt of 1.56 Crores and paying EMI of 2 lakhs every month. My month salary is 3.74 lakhs. I don't want to sell my properties much, but at the same time, i wish to retire from corporate and make an attempt on business.

Ans: You have built a strong asset base at 46.
Your rental income of Rs. 1.2 lakh per month is also a good support.
Your wish to shift from corporate to business can be planned carefully.

» understanding your current position
– You have 2 houses worth Rs. 2.3 crore in your hometown.
– You have 2 flats in Bengaluru worth Rs. 2 crore.
– You earn Rs. 1.2 lakh monthly rental from your properties.
– You own land worth Rs. 5 crore in your hometown.
– You have debt of Rs. 1.56 crore with Rs. 2 lakh EMI.
– Your salary is Rs. 3.74 lakh per month.

» cash flow status before business shift
– Rental income gives you stable monthly cash flow.
– Your EMI consumes Rs. 2 lakh from salary.
– This leaves Rs. 1.74 lakh from salary plus Rs. 1.2 lakh rent for expenses.
– Current net inflow is enough for living and some savings.
– After corporate exit, this will depend on rental and business income.

» importance of debt management before retirement from corporate
– EMI of Rs. 2 lakh is a big fixed cost.
– High EMI creates pressure if business income is low initially.
– Prepay part of the loan before leaving job if possible.
– This can be from savings or partial sale of small non-core asset.
– Lower debt reduces stress in the first years of business.

» business funding clarity
– Do not use all your savings to start the business.
– Keep at least 2 years of personal and EMI expenses aside in safe products.
– This ensures you don’t depend fully on business cash flow from day one.
– Use a mix of personal capital and external funding for business.
– Avoid pledging core property unless business is stable.

» asset protection strategy
– Keep your core properties free from risk of business liabilities.
– Separate personal and business finances completely.
– Maintain proper property documents and legal protection.
– Avoid over-leveraging against your real estate.

» emergency and contingency reserves
– Build 12 to 18 months of household expenses in liquid and safe instruments.
– Include EMI in this reserve calculation.
– This allows you to handle any gap in rental or business income.
– This reserve must be untouched for business use.

» managing lifestyle shift during business transition
– Review monthly expenses and cut non-essential spending in initial business years.
– Keep lifestyle changes gradual and controlled.
– Reassess your spending habits every 6 months during business build-up.
– Use extra rental income growth to improve lifestyle later.

» role of insurance and risk cover
– Maintain adequate life cover to protect family from debt burden.
– Continue your health insurance even after corporate exit.
– Consider additional personal accident and critical illness cover.
– Insurance premium is small compared to potential risk coverage.

» investment allocation during transition
– You may keep part of your savings in growth-oriented investments for long term.
– Keep another part in safe, income-generating assets for stability.
– This creates a dual safety net for your business journey.
– Avoid locking large funds in products with very long lock-in now.

» business risk understanding
– First 2-3 years of business may have low or uneven cash flow.
– Avoid starting large-scale business with all personal capital at once.
– Test your idea on smaller scale before full expansion.
– Review performance every quarter and adjust strategies.

» rental income optimisation
– Keep your Bengaluru flats and hometown houses in good condition to attract quality tenants.
– Have clear rental agreements with timely escalation clauses.
– Avoid long vacancy by keeping competitive rent rates.
– Consider small improvements that can increase rent value without large cost.

» tax planning during corporate-to-business shift
– Salary income is taxed at your slab rate now.
– Business income will have different tax rules depending on structure.
– Rental income is taxable after deduction benefits.
– Plan your structure to reduce tax outflow legally.
– Use depreciation benefits for property to optimise tax.

» building additional income backup
– Even during business phase, explore small advisory or consulting roles in your field.
– This creates extra inflow and reduces full dependence on business profit in early years.
– Such income also helps to repay loan faster if needed.

» family involvement and communication
– Discuss the business plan and risks with your spouse and key family members.
– Keep them aware of the financial plan and emergency reserves.
– Involve them in spending control and asset protection decisions.

» finally
– You have a strong property base and good rental income.
– Your main risk is the EMI burden during the early business years.
– Reduce debt pressure before leaving the corporate job.
– Build large emergency reserves to handle cash flow gaps.
– Keep personal and business finances separate to protect your core assets.
– Start the business in a measured way with a smaller initial investment.
– Optimise rental income and keep insurance in place.
– With careful planning, you can make this career shift with confidence.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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