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Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 22, 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
Milind Question by Milind on Sep 21, 2024Hindi
Money

I am 49 years old and doing MF since 2009 staring with small amount 2000/- pm. Last year i shuffle the portfolio last year. I have following investment in mutual fund 1. parag parik Flexi cap fund - reg gr 5000/- 2. Canara robeco bluechief equity fund gr 5000/- 3. Invesco india infra structure fund 5000/- 4. Quant small cap fund 5000/- 5. PGIM midcap oppotunies fund gr 5000/- I want to create corpus of 2 cr in next 10 years Currently my portfolio value is around 31 L.

Ans: Value funds are a great option for many investors. They invest in undervalued companies with strong potential for future growth. These funds target businesses that may not be performing well now, but have the capacity to grow in the future. This makes them a good choice if you have a long-term horizon and the ability to tolerate volatility.

A key feature of value funds is that they can outperform during certain market phases. However, during other phases, they may underperform compared to other equity funds like growth funds or flexi-cap funds.

Assessing Long-term Returns
Although your current fund may be delivering 30% XIRR, this is not sustainable in the long run. Market conditions fluctuate, and value funds can see significant ups and downs. Historically, the long-term average return for equity funds is between 10-12%. This will vary depending on market cycles, and it’s crucial to consider this when evaluating the performance of your fund.

So, while the current returns look appealing, they should be viewed as part of a larger trend over time. A key insight here is that investing in equity always comes with volatility. Don’t get caught up in short-term gains; instead, focus on the long-term growth potential.

Value Funds vs. Other Equity Funds
Value funds are one part of the equity category, and they have a specific strategy. But compared to growth funds or flexi-cap funds, value funds can be more volatile in the short run.

In growth funds, investments are made in companies expected to grow faster than the market. They can provide better short-term performance during a bullish phase. Flexi-cap funds, on the other hand, balance risk by investing across large, mid, and small-cap companies. This makes them more flexible and diversified.

While value funds have the potential for higher returns, they may also see more volatility. Other equity funds might provide a smoother ride, albeit with possibly lower highs during market rallies.

Active Funds vs. Index Funds
It is worth noting the difference between active value funds and index funds. Index funds are passively managed and follow the market's movement. They don't aim to outperform but to match a particular benchmark. This means they may offer lower returns compared to actively managed funds, where the fund manager picks stocks based on market conditions and strategies.

One of the disadvantages of index funds is that they cannot react to market changes. If a particular sector is underperforming, index funds will still be forced to hold those stocks, while an active fund manager can make adjustments to avoid losses.

So, in your case, actively managed funds, especially in the value space, can provide better returns with professional management.

Direct vs. Regular Funds
If you are investing through direct funds, you might want to consider the benefits of switching to regular funds through a Certified Financial Planner. Direct funds have lower expense ratios, but that comes with fewer insights and advice. A Certified Financial Planner can guide you through market cycles and help rebalance your portfolio.

A good MFD with a CFP credential will actively monitor and suggest changes in your investments based on changing market conditions. This advice and regular tracking help in making better financial decisions compared to direct funds.

Setting Up an STP for Better Risk Management
Systematic Transfer Plans (STPs) can be a smart option for managing risk. If you're experiencing a windfall in returns, an STP allows you to move your money into a safer option gradually.

Instead of pulling out everything and trying to time the market, an STP can help you balance between high-risk and low-risk investments. You can shift from a value fund into something more stable like a balanced fund or debt fund over time.

This approach can lock in your profits while giving you a more stable future return.

However, an STP is not necessary for everyone. If your goal is long-term, and you can handle market fluctuations, then staying invested in the value fund may be more beneficial. Equity funds reward patience. You should only consider an STP if you're nearing a financial goal or require more liquidity.

Risk Assessment of Value Funds
Every equity fund comes with risk, but value funds can be more volatile. They often invest in companies going through temporary troubles but with strong fundamentals. The risk here is that not all of these companies will recover quickly.

In good times, value funds can outperform the market. But when the economy slows, these funds may underperform. This makes them ideal for long-term investors who are willing to ride out market swings. If you are comfortable with this level of risk, then value funds are still a good option.

The Impact of Volatility
Volatility is a part of investing in value funds. High returns like the 30% XIRR you are seeing now may not last. But even if they drop, the core potential of value funds remains strong. Over a 10 to 15-year period, the return could stabilize around 12% CAGR, which is still healthy.

It is essential to have realistic expectations when investing in these funds. Don't let short-term gains make you overly optimistic or lead you to increase your risk unnecessarily.

Should You Continue Investing in Value Funds?
If your investment horizon is long-term, value funds can still play a crucial role in your portfolio. You should, however, ensure that you are diversified across other fund types to spread your risk. A Certified Financial Planner can help in assessing whether you need to rebalance your investments.

In general, staying invested in value funds is not wrong. They offer great potential for wealth creation but come with volatility. You just need to ensure you’re not overexposed to one fund type.

Final Insights
A 30% XIRR from a value fund is impressive but temporary. Over time, expect returns to normalize around 12% with volatility.

Diversifying across other equity funds can reduce your overall risk. If you’re uncomfortable with the current volatility, consider setting up an STP. But if your goal is long-term, staying invested in the value fund could still yield strong results. Always seek advice from a Certified Financial Planner to ensure you are on the right track.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
Instagram: https://www.instagram.com/holistic_investment_planners/
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 Kalirajan  |8330 Answers  |Ask -

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I am 49 years old and doing MF since 2009 staring with small amount 2000/- pm. Last year i shuffle the portfolio last year. I have following investment in mutual fund 1. parag parik Flexi cap fund - reg gr 5000/- 2. Canara robeco bluechief equity fund gr 5000/- 3. Invesco india infra structure fund 5000/- 4. Quant small cap fund 5000/- I want to create corpus of 2 cr in next 10 years Currently my portfolio value is around 31 L.
Ans: At 49 years of age, you have a solid plan for the next 10 years, aiming to accumulate Rs 2 crores. While this is achievable, let's assess your current investments and how we can optimize them to help you reach your target with a well-balanced and structured approach.

Current Assessment of Your Portfolio
Parag Parikh Flexi Cap Fund: A Flexi Cap fund offers flexibility to invest across market caps. This provides diversification but may be subject to market fluctuations. While it has potential for long-term growth, it may not always outperform focused funds.

Canara Robeco Bluechip Equity Fund: Bluechip funds generally invest in large, established companies. These are relatively safer but may not give extraordinary returns compared to mid or small-cap funds.

Invesco India Infrastructure Fund: Infrastructure sector funds can have high growth potential. However, they are cyclical and may face volatility, especially during economic downturns.

Quant Small Cap Fund: Small-cap funds come with higher risk but can deliver significant returns. They are suitable if you have a high-risk appetite, but they require monitoring for volatility.

With a current portfolio value of Rs 31 lakhs, achieving Rs 2 crore in 10 years will require a balanced approach, with a mix of growth-oriented and stable investments.

Analytical Approach
Growth Potential of Your Current Funds
Your current funds cover a range of categories: Flexi Cap, Bluechip, Infrastructure, and Small Cap. While they provide diversification, there are certain risks, especially in sectoral and small-cap investments. Here's an analysis:

Flexi Cap Funds: These funds allow fund managers to shift between large, mid, and small-cap stocks depending on market conditions. This flexibility can enhance returns but may also expose you to greater risks if the market turns volatile. Consider whether you want to retain this flexibility or prefer a more focused investment approach.

Bluechip Funds: These large-cap investments offer stability. Since you have a long-term horizon, Bluechip funds can be a cornerstone of your portfolio, providing steady growth with lower risk. However, they may not deliver returns as high as mid or small-cap funds over the same period.

Sector-Specific Funds: Your investment in infrastructure is cyclical and dependent on the economy and government policies. While it can generate high returns during periods of infrastructure growth, it is more volatile compared to diversified funds.

Small Cap Funds: These funds have higher potential returns but also higher risks. They can be a good choice if you are prepared for short-term volatility.

Evaluating Portfolio Balance and Risk
Your portfolio appears to lean toward higher-risk investments, especially with exposure to small-cap and sectoral funds. While this strategy can lead to higher returns, it may expose you to considerable volatility. Given your age and the importance of preserving capital closer to retirement, you may want to rebalance your portfolio to include more stable investments.

We recommend the following adjustments:

Steps for Portfolio Optimization
Diversification to Manage Risk
Increase Large Cap Exposure: Large-cap funds are more stable and can provide consistent returns over time. Since you have a Bluechip fund, consider increasing your allocation to large-cap investments, which may help balance out the volatility from your small-cap and sectoral funds.

Limit Sectoral Exposure: While the infrastructure sector has growth potential, it's also vulnerable to cyclical downturns. Consider reducing your exposure to sector-specific funds to avoid the risk of underperformance during economic downturns.

Balanced or Hybrid Funds: Hybrid funds, which invest in both equity and debt, can offer a mix of growth and stability. Adding a balanced fund to your portfolio may help reduce volatility while still allowing you to benefit from equity growth.

Reevaluate Small Cap Allocation
Small-cap funds can offer high returns but are also highly volatile. At 49, your risk tolerance may need to shift slightly toward more stable investments. You may want to limit your exposure to small-cap funds to 15-20% of your total portfolio. You could consider moving part of your small-cap allocation into mid-cap or multi-cap funds for a more balanced risk-return profile.

Consistent SIPs and Top-Ups
You are currently investing Rs 20,000 per month through SIPs. This is a good strategy to average out market volatility and stay disciplined with your investments.

Consider Increasing Your SIP Amount: If possible, increase your SIPs gradually every year. Even a small annual increase in your investment can significantly enhance your corpus over the next 10 years.

Top-Up SIPs During Market Corrections: Take advantage of market downturns by making lump sum investments or increasing your SIP during these times. This will allow you to buy more units at lower prices, boosting your overall returns.

Long-Term Focus and Active Monitoring
Given that you are 10 years away from your goal, it's important to maintain a long-term focus while regularly reviewing your portfolio:

Review Performance Annually: Keep track of how your funds are performing. If any of your funds consistently underperform their benchmark or peers, consider switching to better-performing funds after consulting a Certified Financial Planner.

Avoid Frequent Portfolio Changes: While it's essential to monitor performance, avoid the temptation to make frequent changes based on short-term market movements. Stick to your plan unless there is a fundamental reason to alter your investments.

Importance of Actively Managed Funds
You have been investing through a regular plan, which is good as it allows you access to the expertise of a Mutual Fund Distributor (MFD) with Certified Financial Planner (CFP) credentials. Let's understand the benefits of regular funds over direct funds:

Expert Advice: Regular funds give you access to professional advice. Your Certified Financial Planner can help you make informed decisions, especially when market conditions change or when your goals evolve.

Active Management: Actively managed funds tend to outperform passive investments, such as index funds, in volatile markets. Your planner will ensure your portfolio is in line with your risk tolerance and long-term goals.

Avoid Direct Funds
While direct funds may seem attractive due to lower expenses, they lack professional guidance. Managing a portfolio on your own requires significant time and knowledge. Given your 10-year goal, regular funds with the support of a planner are a more efficient way to optimize returns and manage risks.

Disadvantages of Index Funds
Index funds might not suit your goal of accumulating Rs 2 crore in 10 years. They mirror the market and lack the ability to outperform. Actively managed funds, on the other hand, aim to outperform the market. You are already investing in actively managed funds, which have the potential for better returns, especially in a growing economy like India.

Creating an Emergency Fund
Before making any changes to your portfolio, ensure you have a solid emergency fund. This should be 6-12 months of your monthly expenses. It will act as a financial cushion in case of unexpected events, allowing you to stay on course with your investments without liquidating them prematurely.

Estate Planning and Insurance Review
At 49, it's also essential to consider estate planning. Ensure that you have nominated beneficiaries for your investments and that your will is updated.

Additionally, review your insurance coverage:

Health Insurance: Make sure you have adequate health coverage for yourself and your dependents. Medical expenses can erode your savings, especially as you get older.

Life Insurance: Ensure you have sufficient life insurance coverage to protect your family’s financial future. Term insurance is the most cost-effective option for providing a large cover.

Final Insights
Achieving a corpus of Rs 2 crore in 10 years is possible with a well-thought-out strategy. Your current portfolio is diversified, but it leans toward higher-risk investments. By rebalancing your portfolio to include more stable large-cap and hybrid funds, increasing your SIP contributions, and staying focused on long-term growth, you can optimize your chances of meeting your goal.

Regular monitoring and guidance from your Certified Financial Planner will ensure that your portfolio stays aligned with your risk tolerance and financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
Instagram: https://www.instagram.com/holistic_investment_planners/

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2025

Asked by Anonymous - May 10, 2025
Money
Hi Sir, I am 42 years old private employee and around 1lakh salary per month. I have 2 kids of 7yrs and 4yrs each. I have savings like in NPS as 11lakhs, PPF as 8lakhs, Sukanya as 2lakhs, 1 term policy and lic policy. Medical insurance is from company and no person health insurance. And I have 72k in MFs till now. I have started it and regretting as I ignore MFs as I don't have much financial knowledge on this. So requesting you to please give a suggestion for my family future needs like education, marriage etc. and importantly pension fund after retirement. Hope you will reply and help me.
Ans: You're doing well so far. You have started important savings and protection steps. You are rightly thinking about your children and retirement. Let’s now look at your full financial picture step by step. This is to guide you in building a solid future for your family.

Current Financial Overview – Evaluation
Your monthly income is Rs.1 lakh. This gives you decent capacity to plan.

You are 42 now. That gives you around 15 to 18 years for retirement.

You have Rs.11 lakhs in NPS. This is a good start.

PPF of Rs.8 lakhs is useful for long-term needs. Well done.

Sukanya Samriddhi Yojana of Rs.2 lakhs is good for daughters. Keep it up.

You have term insurance. This is a very important safety net.

You have company medical insurance. But you must take personal health cover too.

Rs.72,000 in mutual funds is a good beginning. You should continue.

You have a LIC policy. This is a mix product. We need to check its usefulness.

Children’s Future – Education and Marriage Planning
Your kids are 7 and 4 years old. Their higher education starts in 10-14 years.

For education and marriage, equity mutual funds are best suited.

They can give better growth than PPF, Sukanya, or fixed options.

Continue Sukanya Samriddhi. It is safe and tax-free.

But add mutual funds as major part for education goals.

Use regular plans through MFDs with CFP support. This gives proper guidance.

Avoid direct plans. They miss out expert monitoring and adjustment support.

Direct plans seem cheaper. But lack handholding and ongoing advice.

Choose child-focused mutual fund portfolios with 10+ years view.

Invest monthly through SIPs. This builds wealth slowly and safely.

Target two separate funds: one for elder, one for younger child.

Review goals every year with your CFP and adjust SIPs.

Your Retirement – Pension Planning Steps
NPS of Rs.11 lakhs is a decent beginning. You should continue it.

But don’t depend only on NPS for full retirement.

Add mutual funds as second pillar for retirement.

Invest in balanced and multi-cap equity mutual funds via regular plans.

Regular plans through CFP and MFDs will give review and corrections.

Avoid direct funds. You may miss right fund changes and rebalancing.

Equity funds can help you beat inflation over next 15-20 years.

Don’t invest in annuity plans. They give low income and low flexibility.

Increase your SIP amount every year by 10%-15%.

Consider retirement planning as your most important goal.

Estimate a comfortable monthly need after retirement.

Plan now to reach that amount by 60.

Maintain separate SIPs for children’s education and for your retirement.

Life Insurance – Policy Review and Action
You already have a term insurance. This is perfect. Continue it.

If your term insurance is below Rs.1 crore, increase it now.

Avoid traditional LIC endowment or ULIP policies.

These mix insurance with investment. Gives poor return.

If your LIC is traditional or ULIP, plan to surrender it.

Take surrender value. Invest that amount in mutual funds.

Pure term plans protect your family better than endowment plans.

No need to mix insurance and savings.

Health Insurance – Important Next Step
Company insurance is not enough. Buy personal family health insurance.

After leaving job, company cover may stop. Risk is high without personal cover.

Take a Rs.10 lakh floater plan now for your family.

Add super top-up of Rs.15-20 lakhs later. Premium is low.

This gives peace of mind against big medical bills.

If you delay this, you may get exclusions or waiting period.

Emergency Fund – Safety Cushion Plan
Keep at least 6 months of expenses in savings or liquid mutual fund.

This is your safety net during job loss or medical need.

Use sweep-in FD or liquid funds for better returns.

Don’t touch emergency fund for any investment.

Keep it ready and separate from regular savings.

Mutual Funds – Growth Engine for Long Term Goals
You have Rs.72,000 in mutual funds now. Good first step.

Continue investing monthly through SIPs. Choose regular plans.

Use the help of MFDs and CFPs for fund selection and review.

Avoid index funds. They don’t beat market. No fund manager support.

Actively managed funds perform better with expert fund management.

Also avoid direct funds. You need handholding and goal tracking.

Regular funds cost little more. But give huge benefit of expert advice.

Equity mutual funds should be used for all long-term goals.

For short-term needs, use short duration or hybrid funds.

Review your portfolio yearly. Adjust based on life changes.

PPF, Sukanya and NPS – How to Use Them Properly
PPF is safe and tax-free. Continue till maturity.

Use it as part of your retirement strategy.

Sukanya is good for your daughters. Continue till they reach 21 years.

NPS is useful for building retirement money. Continue your contributions.

But NPS has lock-in. So don’t make it your only retirement tool.

Mix it with equity mutual funds to create balance.

Review asset allocation with a certified planner every year.

Tax Planning – Smart Use of Instruments
Use Section 80C fully with PPF, Sukanya, Term Insurance, ELSS.

ELSS mutual funds give tax benefit and growth potential.

Don’t put too much in low-yield tax-saving policies.

Use HRA and NPS also for tax savings if available.

Equity mutual funds: LTCG above Rs.1.25 lakh is taxed at 12.5%.

STCG is taxed at 20%. So, hold equity funds for more than 1 year.

Debt mutual fund gains are taxed as per income slab. Plan accordingly.

Action Plan – What You Can Do Next
List your goals: retirement, kids’ education, their marriage.

Estimate time left for each goal.

Assign investments to each goal. PPF, NPS, Sukanya for retirement and kids.

Start or increase SIPs in regular equity mutual funds.

Take personal health insurance without delay.

Check and surrender LIC if it is traditional or ULIP.

Build an emergency fund equal to 6 months of salary.

Increase your term insurance if less than Rs.1 crore.

Review all investments yearly with a certified financial planner.

Finally – Insights to Keep in Mind
You are doing many right things. Just needs better alignment.

Don’t feel regret about delay. You are now taking steps forward.

Invest in mutual funds regularly with expert guidance.

Avoid direct and index funds. Go with regular plans via CFPs.

Plan each goal separately. Don’t mix children and retirement funds.

Protect your family with term insurance and health cover.

Stay consistent with SIPs. Wealth builds over time.

Review once a year. Track goals and adjust your plan.

Always take advice from certified financial planners.

Best Regards,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2025

Money
I am 31 years, unmarried bachelor and lead celibacy. I have investment in equity mutual fund growth option cost of which is 20 lacs now valued at 45 lacs. I don't require this for next 30 years and reserve it for my retirement. Do I need to save now for retirement, or can I spend 99% of my current earning as I have a retirement corpus of Rs.45 lacs at current value. I have life cover of 1.5 cr and for health Rs.40 lacs and comfortably earning from MNC for my survival, healthy with no bad habits and lead a disciplined and minimalist life style. Please guide me do I need more retirement corpus, or the accumulated Corpus is enough for retirement. If so how much more corpus do i need?
Ans: You have shown excellent discipline. At age 31, you already have Rs.45 lacs in equity mutual funds. That’s a rare position to be in.

You lead a minimalist life. You are healthy. You don’t have dependents. You are earning well. You are living with purpose and clarity.

Still, retirement planning is not only about a lump sum today. It also needs a 360-degree analysis.

Let us now evaluate in detail if this Rs.45 lacs is enough for your retirement.

We will assess from lifestyle, inflation, investment risk, tax rules, personal values, and health perspective.

We will also answer your main question: Can you spend 99% of your earnings now?

Retirement Planning Is Not Only About Current Corpus
Rs.45 lacs looks large now. But you are 31. Retirement is 29 years away.

A rupee today won’t have the same value 30 years later.

With inflation, prices can rise 5x or even more by then.

Your current Rs.45 lacs may not buy much in 2054.

So it is not enough to just grow. It must grow faster than inflation.

What If You Don’t Add Any More Investment?
If you don’t invest any more for retirement now, your Rs.45 lacs must grow for 30 years.

Let us assess few key points:

If the investment is fully in equity, volatility is high.

Long-term returns can be rewarding, but not always predictable.

Also, equity mutual funds attract capital gains tax.

New rule: LTCG above Rs.1.25 lakh taxed at 12.5%.

This will reduce the final retirement corpus.

So you cannot assume all returns will be tax-free.

Impact of Inflation on Lifestyle
You are minimalist today. But that may not be the case at 60.

Even basic costs like food, rent, medicine, utilities will go up.

At 6% inflation, Rs.25,000 monthly expenses today may become Rs.1.5 lacs after 30 years.

Medical inflation is higher. You may need Rs.5 lacs per year for healthcare alone at retirement.

So the same Rs.45 lacs will lose value every year.

What If You Live Longer?
Longevity is increasing in India. You may live till 90 or 95.

That means 30 years working and 30+ years retired.

So retirement may last longer than your working life.

Your money has to work for you after 60.

Even a Rs.3 crore corpus at retirement may fall short if not planned properly.

Health Cover and Life Cover Are Good
Rs.1.5 crore term insurance is good.

Rs.40 lacs health cover is excellent. Keep renewing it.

But insurance is not a substitute for retirement planning.

Also, insurance does not build wealth.

You Have Time on Your Side
You are 31. That gives you 30 years to grow your corpus.

That is your biggest strength.

Small, consistent investing now can multiply your corpus over 30 years.

Even Rs.10,000 per month extra can change your future.

Can You Spend 99% of Earnings?
It is not wise to spend 99% of earnings even with Rs.45 lacs corpus.

It makes your life dependent on just one investment.

Also, it leaves no buffer for job loss, health crisis, or early retirement.

Spending most of your income will reduce your financial freedom later.

Risks of Not Saving Enough
Future jobs may not pay this well.

You may face burnout or wish to retire early.

Markets may not perform as expected.

Emergencies may force early withdrawal.

Expenses can rise unexpectedly.

What Should Be the Ideal Retirement Corpus?
There is no fixed number. It depends on your lifestyle.

Still, we can estimate based on some broad assumptions:

A basic retirement needs at least Rs.4 to 5 crores at age 60.

A comfortable life with travel, hobbies, and good healthcare needs Rs.6 to 8 crores.

A rich life with freedom and legacy needs Rs.10 crores or more.

You may not need all of it. But you must aim higher and stay flexible.

How Much More Corpus You Need?
You already have Rs.45 lacs.

Assuming 10% annual return, and no withdrawal for 30 years:

Your current Rs.45 lacs can become Rs.8 crores in 30 years.

But tax and inflation will reduce its value.

After adjusting, this may be worth only Rs.3 to 4 crores in real terms.

So yes, you are on the right path. But you are not done yet.

Should You Stop Saving Now?
No. Stopping now is not safe.

You should continue to invest at least 20% to 30% of income.

You don’t need to be aggressive.

But you must not stop completely.

Advantages of Continuing SIPs in Actively Managed Mutual Funds
Actively managed funds are more responsive to market changes.

They are driven by research and fund manager insights.

They can beat inflation better than passive options.

They help create real wealth over time.

You can invest through mutual fund distributor with CFP. That gives expert help.

Disadvantages of Direct Mutual Fund Investing
Direct funds seem cheaper. But they miss the human touch.

No professional reviews. No behavioural guidance.

You may exit in panic or enter at wrong time.

Mistakes in direct investing are costly.

Regular funds via a Certified Financial Planner offer support, reviews, and strategy.

Financial Planning Is Not Just About Corpus
Financial planning is lifelong.

You need a written retirement plan.

Include health, taxes, estate, and liquidity in that plan.

Set goals every 5 years and review progress.

Don’t think of corpus only. Think of financial independence.

Your Current Strengths
Strong investment of Rs.45 lacs

No dependents or liabilities

High income and low expenses

Health insurance and term cover

Discipline and minimalism

What You Can Do Now
Continue SIPs in actively managed funds via expert help

Review portfolio yearly with a Certified Financial Planner

Create a written retirement plan

Don’t touch your Rs.45 lacs till 60

Save 30% of income. Enjoy 70%.

Finally
You are doing well. You already have Rs.45 lacs at age 31. That shows foresight.

But retirement is not a fixed-point goal. It is a moving target with inflation and uncertainty.

You must not stop saving. Keep adding regularly. Small steps now can lead to a rich future.

Aim to build a Rs.6 to 8 crore corpus. That gives you safety, comfort, and peace.

Spending 99% now is risky. Don’t do that. Instead, reward yourself within limits. But keep investing for freedom.

Discipline today gives freedom tomorrow.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2025

Asked by Anonymous - May 09, 2025
Money
Sir, we had a dispute in our ancestral property we approached the court and the verdict said we are entitled to a portion of the property The dispute was the land was sold without our knowledge etc., after getting the verdict we got patta, registration in our name. Now we are planning to sell the land, a lawyer said get a ratification deed, I don't know what it is and also weather it is needed or not. The lawyer called us and said the the other party who has purchased the land illegally is not agreeing to sign and is asking money to settle the matter as he has purchased the land. Even after receiving court orders this kind of dodging is happening. The amount of money he is asking is senseless, even if I sell the land I wouldn't get that much amount, I am unable to put in writing many other problems kindly advise what next steps to take. also let me know what are all the documents to have as a owner. Thank you
Ans: You have taken rightful steps. Court verdict is in your favour. That shows your legal ground is strong.

But still, the other party is asking for money. That too, an unfair amount. You also mentioned a lawyer suggested getting a ratification deed. Let us try to understand the full situation and assess all possible options. We will also cover what documents are needed to prove your ownership.

This reply gives you a 360-degree view. It will help you make a sound and confident decision.

Understanding Your Current Legal Standing
You said the land was sold without your knowledge. That makes the original sale illegal. The court has agreed with you. That is a key win for you.

You now have patta and registration in your name. These are strong documents. They show you have legal title.

Based on this, you are now the legal owner. That means you have the full right to sell the land. But the buyer must also be confident. So legal clarity is very important.

What Is a Ratification Deed?
A ratification deed is a It confirms a past act done without proper authority. The current party gives approval to that act.

In your case, it seems the buyer who bought the land earlier is being asked to “ratify” that sale. That is, to agree that you are the rightful owner now.

This is not a mandatory document by law. But it is sometimes used to make the title stronger. Some buyers or their banks ask for it.

However, since the court has already ruled in your favour, you may not legally need it. You already have the stronger claim.

Why Is the Buyer Still Causing Issues?
The person who bought the land earlier might feel he lost money. He may think the sale to him was legal. But since the court disagreed, he now holds no right.

His demand for money is unjust. It is a pressure tactic. He is trying to recover his loss by troubling you.

You are not legally required to pay him. He has no power to stop your sale.

Assessing Options Now
You can now evaluate your next steps from three angles – legal, practical, and financial.

Legal Options
Talk to your lawyer again. Ask: is a ratification deed mandatory in your case?

Get a written legal opinion. This should clearly mention your rights and position.

File a complaint if the other party is threatening you or asking money.

Send a legal notice through your lawyer to that person. Mention that he has no right now.

Practical Options
Try selling to a buyer who trusts the court order. Show them all documents.

Explain clearly that title is clean. Show the judgment, patta, and registration.

Use a reputed real estate lawyer for the sale. That gives buyers more confidence.

Financial Assessment
Do not agree to pay huge amounts. It may cause loss for you.

If needed, consider a small settlement. But only after full legal review. And only if it makes the sale smooth and quick.

Ask yourself: Even if I settle, will the person agree to give in writing? If not, don’t pay.

Must-Have Documents to Sell the Land
As a rightful owner, you must hold the following papers:

Patta in your name (this is land ownership proof)

Registered sale deed or title deed (issued after the court judgment)

Copy of the court verdict

Encumbrance Certificate (EC) (shows your name as the current legal holder)

Legal heir certificate, if you inherited the land

Property tax receipts in your name

Aadhar and PAN card copies

Suggested Steps to Make Sale Smooth
Get a detailed Title Certificate from a lawyer. It should mention the court case and outcome.

Keep a summary note ready. It should explain how you became owner.

Ensure name match across all your documents.

Keep a certified copy of court order with you at all times.

Use a reputed property consultant or broker only if needed. Prefer buyers who are local and familiar with such cases.

Emotional and Mental Pressure
You also mentioned you are facing many other issues. That is understandable. Land disputes take a heavy toll on health and peace of mind.

Please do not worry. You already have legal strength.

You have cleared a big milestone by getting the court’s support.

Don’t allow fear or threats to stop you.

Stay strong. Keep family informed. Talk regularly with your lawyer.

How Certified Financial Planner Can Help
A Certified Financial Planner (CFP) can guide you better with your sale proceeds.

If you plan to sell, prepare a written cash flow plan.

Think about your family’s short-term and long-term needs.

Keep emergency funds aside. Don’t invest all money at once.

Mutual funds managed by professional advisors can be considered. They offer long-term wealth building.

What Not To Do
Do not deal in cash. Always use cheque or bank transfer.

Do not sign any paper without lawyer check.

Do not get emotionally disturbed by their false threats.

Do not delay your next steps due to confusion or fear.

Finally
You have shown good courage. You followed the legal process. You now own the land as per law.

The other party is only trying to misuse your fear. Do not fall for it.

If the buyer still refuses to cooperate, avoid them. Choose another buyer.

If a ratification deed is insisted by your new buyer, ask your lawyer: Is it really needed?

If not needed, move ahead without it.

If needed, try again to convince the other person. If they demand unreasonable money, don’t agree.

Let your lawyer send notice. You can also explore police help if needed.

Always work with proper documents. Keep everything in writing.

Keep calm and move forward. With legal support and proper documents, you will win.

If you need help with managing the money after sale, we can help with a long-term financial plan.

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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