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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Sep 01, 2022

Mutual Fund Expert... more
Syed Question by Syed on Sep 01, 2022Hindi
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I am 46 years old now and estimating a requirement of approx 2 Cr at the age of 58. I am continuing below mentioning SIP from the last two years. Need you valuable suggestions to achieve my target. 

SIPs are for Total Amount of 33000/ month

  • Axis Focused 25 Fund - Growth -- 2500
  • Aditya Birla Sun Life Frontline Equity Fund - Growth -- 2500
  • HDFC Hybrid Equity Fund - Regular Plan - Growth -- 5000
  • Axis Bluechip Fund - Growth -- 2500
  • Axis Growth Opportunities Fund - Growth -- 2500
  • DSP Mid Cap Fund - Growth -- 3000
  • HDFC Small Cap Fund - Regular Plan - Growth -- 3000
  • IDFC Focused Equity Fund - Growth -- 3000
  • L&T Emerging Businesses Fund - Regular Plan – G -- 3000
  • SBI Blue Chip Fund - Growth -- 3000
  • UTI Flexi Cap Fund - Growth -- 3000

Ans: This seems to be within reach in 14 years (2 years prior and 12 years hence forth).

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  |7968 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 13, 2024

Asked by Anonymous - Jul 29, 2024Hindi
Money
My Age is 43. my monthly salary is 75K. My home loan EMI is Rs. 15000/- per month (Loan Amt: Rs. 20 Lakhs for 20 Yrs) . I have started SIP's of Rs. 12000 per month since 1.5 yrs. My Goal is for 3 Crores in next 10-15 yrs. My SIP fund details are: 1. TATA SMALL CAP FUND- RS. 2000 2. Quant Mid Cap Fund - Rs. 2500 3. Canara Robeco Small Mid Cap Fund - Rs. 1000 4. Nippon India Small Cap Fund - Rs. 2500 5. ICICI Blue chip Fund Growth - Regular - Rs. 2000 6. ICICI Prudential Mutual Fund - Growth - Rs. 2000 Kindly guide to achieve the expected target within the 10-15 yrs. Thank you.
Ans: Current Financial Snapshot
At 43 years old, you earn Rs. 75,000 monthly. You have a home loan EMI of Rs. 15,000 per month. Your goal is to accumulate Rs. 3 crores in the next 10-15 years. You’ve been investing Rs. 12,000 per month in SIPs for 1.5 years. Let’s assess how you can achieve this ambitious target.

SIP Portfolio Analysis
Your current SIPs are spread across small-cap, mid-cap, and large-cap funds. Here’s a detailed evaluation of your portfolio:

Small-Cap Exposure: You’ve allocated Rs. 6,500 monthly to small-cap funds. Small-cap funds have the potential for high returns but come with high risk. At 43, it’s essential to strike a balance between growth and stability.

Mid-Cap Allocation: Rs. 2,500 per month is invested in a mid-cap fund. Mid-cap funds are a good mix of growth and risk, offering potential returns while being slightly less volatile than small-cap funds.

Large-Cap Focus: Rs. 2,000 per month is in a large-cap fund. Large-cap funds are more stable, investing in well-established companies. This provides a solid foundation for your portfolio.

Balanced Fund: Your investment in a fund that likely balances equity and debt adds some stability to your portfolio. This is a wise choice for risk management.

Enhancing Portfolio Diversification
Your current SIPs are heavily weighted towards small-cap funds, which are volatile. Diversifying your portfolio will reduce risk and increase the likelihood of reaching your Rs. 3 crore goal.

Increase Large-Cap Allocation: Large-cap funds offer more stability and consistent returns. Consider increasing your monthly SIP contribution to large-cap funds. This will add balance to your portfolio and reduce risk.

Introduce Balanced or Hybrid Funds: Balanced funds invest in both equity and debt. They provide growth potential while reducing volatility. Adding such funds can help stabilize your portfolio.

Reduce Small-Cap Exposure: While small-cap funds have high growth potential, they are also highly volatile. Given your age and goals, consider reducing your small-cap exposure.

Actively Managed Funds vs. Index Funds
Actively managed funds, which your portfolio consists of, can outperform index funds, especially in the Indian market. Here’s why actively managed funds are a better choice:

Higher Potential Returns: Actively managed funds aim to outperform the market. This can result in higher returns compared to index funds.

Professional Management: These funds are managed by professionals who actively make investment decisions based on market conditions. This increases the chances of capitalizing on market opportunities.

Avoid Index Funds: Index funds simply track the market and may not provide the returns you need to meet your Rs. 3 crore goal. The lack of active management in index funds can be a disadvantage in a dynamic market like India.

The Importance of Regular Funds
Investing through regular funds via a Certified Financial Planner (CFP) offers several benefits. Here’s why it might be better than direct funds:

Expert Guidance: A CFP can provide tailored advice based on your financial goals, risk tolerance, and market conditions. This helps in optimizing your portfolio.

Risk Management: CFPs help in balancing risk by suggesting appropriate asset allocation. This ensures your investments align with your risk appetite.

Periodic Reviews: Regular funds managed through a CFP are reviewed periodically. This helps in making necessary adjustments based on market conditions or changes in your financial goals.

Increasing SIP Contributions
To achieve your Rs. 3 crore goal, consider increasing your SIP contributions. Here’s why and how you should do it:

Annual Increase: Consider increasing your SIPs by 10-15% annually. This will help you accumulate a larger corpus over time. An annual step-up in your SIPs aligns with potential salary increments.

Step-Up SIPs: Some mutual funds offer a step-up SIP option. This feature allows your SIP contribution to increase automatically each year. This is a convenient way to boost your investments without needing to manually adjust your SIP amount.

Additional Investments: Besides increasing SIPs, consider making lump sum investments whenever you have surplus funds. This will further enhance your portfolio’s growth potential.

Managing Home Loan and Investments
Your home loan EMI of Rs. 15,000 is manageable but should be carefully balanced with your investment commitments.

Loan Prepayment: If you receive any bonuses or windfalls, consider using a portion to prepay your loan. This will reduce your interest burden and free up more money for investments.

EMI and SIP Balance: Ensure that your EMI and SIP contributions are well balanced. Don’t stretch yourself too thin. It’s important to maintain a healthy cash flow to manage both commitments comfortably.

Tax Planning and Wealth Accumulation
Effective tax planning is crucial for maximizing your returns and reaching your Rs. 3 crore goal. Here’s how you can optimize tax benefits:

Utilize Section 80C: Ensure that your investments like PPF, ELSS, and life insurance premiums fully utilize the Rs. 1.5 lakh deduction under Section 80C. This will reduce your taxable income and increase your savings.

Tax-Efficient Funds: Consider investing in tax-efficient funds such as ELSS, which provides tax benefits along with growth potential. This will enhance your overall returns.

Retirement Planning
As you approach your 50s, retirement planning becomes increasingly important. Here’s how to ensure you’re on track:

Dedicated Retirement Fund: Consider setting up a separate retirement fund. This could include NPS, PPF, or a retirement-specific mutual fund. These instruments offer a good mix of equity and debt, which is ideal for long-term growth and stability.

Review Retirement Goals: Regularly assess your retirement corpus to ensure it aligns with your future needs. Adjust your savings rate if necessary to meet your retirement goals.

Final Insights
Achieving a Rs. 3 crore corpus in 10-15 years requires a balanced and disciplined approach. Start by diversifying your SIP portfolio, increasing your SIP contributions, and considering additional investments. Manage your home loan effectively and optimize your tax planning to maximize savings. Regularly review and adjust your financial strategy as needed. With the right approach, your goal is well within reach.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

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Radheshyam

Radheshyam Zanwar  |1190 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Feb 16, 2025

Asked by Anonymous - Feb 15, 2025Hindi
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I gave 12th class exams last year scored 81% dummy school had 66 and 77 percentile in mains 1 and 2 and 90.2 percentile in mhtcet being a non Maharashtraian. 123 in bitsat. Took a drop, studied hard yet scored 60 percentile in mains 2025 first attempt. Feeling disheartened havent been able to study nicely after results. Will it be practical to focus on mains 2 as i doubt my capabilities or bitsat entirely? Or any other exam i have a good scope in? Wish to get into a tier 1 clg (have delhi domicile as i did my 12th from delhi). If yes, how do i build the momentum and get back to studies and which exam should i be focusing on since i have failed mains 1 also.
Ans: Hello dear.
Remember, the JEE exam and passing engineering from 1st tier engg college can't be a parameter of success in life If you look nearby, many people are successful, but none of them have completed their engineering from 1st tier college or cleared JEE like competitive examinations. You tried your best but failed to crack JEE in 1 or 2 attempts. No problem. You are not alone in this worst situation (as per your thinking)! You also gave the MHT-CET and got a good percentile (90.2). You could be admitted to a good private engg college with this percentile in Maharashtra. But why you did not take this decision is not clear. I would like to suggest you, please drop the idea of appearing for JEE this time and clear any state-level engineering entrance examination. Take admission to a reputed private engineering college and start you journey in a fresh mood. For your reference, there are 10 engineering colleges in India where you can get admission without a JEE score. To know more details, please copy and paste the following link into your browser- https://timesofindia.indiatimes.com/education/news/10-engineering-colleges-in-india-for-pursuing-btech-without-jee-main-2025-score/articleshow/118162587.cms.
Focus either on the state-level engineering entrance examination or choose the best options from the given link, if your financial position is strong.

If satisfied with the reply, please like and follow me, else ask again.
Thanks
Radheshyam

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Radheshyam

Radheshyam Zanwar  |1190 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Feb 15, 2025

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My son has got 91 percentile in the recent jee exam , he has next attempt in april, but i feel its difficult for him , can i know about other good colleges in karnataka , as im based their. interested in computer science and aeronautical degree, also advise some recent good courses for his career in india.
Ans: Hello Manoj.
Do not get stressed at this stage. Even though his score is 91 percentile in 1st attempt, he can do well in 2nd attempt. But from the safer side, ask him to appear in the Karnataka State Engineering Entrance Examination also. Even if he scores less in JEE on 2nd attempt, he may good college via the state entrance examination in CSE or aeronautical engineering as per your wish. For your reference, there are 10 colleges in India where you can get admission without a JEE score. To know more details, please copy and paste the following link into your browser- https://timesofindia.indiatimes.com/education/news/10-engineering-colleges-in-india-for-pursuing-btech-without-jee-main-2025-score/articleshow/118162587.cms.
There are no such courses to be called as recent. The choice of courses depends upon the interest of your son. Hence there is no need to hurry and get into panic at this stage. Let him appear for both exams first, Ask about his interests, and then choose the course accordingly. I would be happy to suggest you after knowing his scores in JEE+State entrance + his liking.
Till then, ask him to focus only on two engineering entrance exams. Best of luck to your son for upcoming exams.

If satisfied with the reply, please like and follow me, else ask again.
Thanks
Radheshyam

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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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