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Ramalingam

Ramalingam Kalirajan  |7593 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 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
Asked by Anonymous - Apr 22, 2024Hindi
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I am 50 years old .i want to invest in SIP.In which fund should I invest to take good return like 50 lakh and how much invest

Ans: As a Certified Financial Planner, I commend your decision to invest in SIPs at 50 years old. Investing systematically can help you achieve your financial goals over time. Here's a strategy to aim for a corpus of 50 lakhs:
1. Assess Investment Horizon and Risk Tolerance: Considering your age, investment horizon, and risk tolerance, opt for a balanced approach. Allocate a portion of your investments to equity funds for growth potential and the remainder to debt funds for stability.
2. Diversify Portfolio: Choose a mix of equity and debt mutual funds to diversify your portfolio and manage risk effectively. Select funds with a proven track record of consistent performance and aligned with your investment goals.
3. Calculate SIP Amount: To reach a corpus of 50 lakhs, calculate the SIP amount required based on your expected rate of return and investment horizon. Use an online SIP calculator or consult with a financial advisor for personalized guidance.
4. Consider Asset Allocation: Balance your asset allocation based on your risk appetite. While equity funds offer growth potential, debt funds provide stability. Adjust your allocation based on market conditions and your financial goals.
5. Regular Reviews and Adjustments: Periodically review your SIP investments to ensure they remain aligned with your objectives. Make adjustments as needed based on changes in market conditions, your financial situation, and investment goals.
6. Stay Disciplined: Consistency is key to achieving your investment goals. Commit to investing regularly, regardless of market fluctuations, and avoid making impulsive decisions based on short-term movements.
7. Consult with a Certified Financial Planner: Consider seeking professional advice from a CFP who can provide personalized recommendations based on your financial situation and goals. A CFP can help you create a comprehensive financial plan and navigate the complexities of investing.
By following these steps and staying disciplined, you can work towards building a corpus of 50 lakhs through SIPs while managing risk effectively.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
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  |7593 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 08, 2024

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Sir iam 51 age which sip is good to invest and how much money should i invest for next 10 years
Ans: At 51, investing in SIPs can still be a prudent strategy for wealth accumulation. Here's some guidance for you:

Choosing SIPs:

Diversification: Opt for a mix of equity, debt, and balanced funds to spread risk across different asset classes.
Risk Tolerance: Assess your risk tolerance based on your financial goals, investment horizon, and comfort level with market fluctuations.
Investment Horizon: With a 10-year horizon, you can consider a higher allocation to equity funds for potential growth, balanced by debt funds for stability.
SIP Amount:

Affordability: Determine an SIP amount that you can comfortably afford without straining your finances or compromising other obligations.
Goal-based Investing: Calculate the target corpus you wish to accumulate in 10 years and work backward to determine the monthly SIP amount required.
Emergency Fund: Ensure you have an adequate emergency fund in place before committing to SIPs to cover unforeseen expenses.
SIP Duration:

Consistency: Commit to investing regularly over the entire 10-year period to benefit from the power of compounding and rupee cost averaging.
Review Periodically: Review your SIP investments periodically to assess fund performance, rebalance if necessary, and align with changing financial goals.
Long-term Focus: Maintain a long-term perspective and avoid making emotional decisions based on short-term market fluctuations.
In conclusion, select SIPs that align with your risk profile and financial goals, and invest a monthly amount that is affordable and realistic for your financial situation. Stay disciplined, remain invested for the long term, and periodically review your investments to ensure they remain on track to meet your objectives. Consider consulting with a Certified Financial Planner for personalized advice tailored to your specific needs and circumstances.

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Ramalingam

Ramalingam Kalirajan  |7593 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 14, 2024

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I am 50 years old.I Want invest in sip for 5 to 7 years 20000 pm.which fund is preferable
Ans: Starting a SIP at 50 is a great decision! It shows initiative for your future. However, choosing the right fund depends on your goals and risk tolerance. Let's discuss some key points:

1. Understanding Your Goal:

Shorter Timeframe: A 5-7 year investment horizon is on the shorter side for aggressive wealth creation.

Risk and Return: Generally, higher potential returns come with higher risk. Carefully consider your risk tolerance for this investment.

2. Focus on Asset Allocation:

Asset Allocation is Key: The mix of investments (asset allocation) in your SIP is crucial. This depends on your risk tolerance and goals.

Debt for Stability: Debt Funds can provide stability and liquidity for your investment, especially closer to your investment horizon.

Equity for Growth: Actively managed Equity Funds have the potential for higher growth but also carry market risk.

**3. Considering a Mix (Hypothetically):

Hypothetical Example: A mix of Debt and Equity Funds might be suitable. Let's say 60% in Debt and 40% in Equity (this is just an example, your asset allocation may differ).

Review and Rebalance: It's important to review your portfolio periodically and rebalance if needed to maintain your target asset allocation.

4. Seeking Professional Guidance:

CFP for Personalized Plan: A Certified Financial Planner (CFP) can analyze your risk tolerance, financial goals, and investment horizon to suggest a suitable asset allocation and recommend specific fund categories (not specific fund names).
Here's the key takeaway: Starting a SIP is a smart move! Consider a mix of Debt and Equity Funds based on your risk tolerance and goals. Consulting a CFP can help you create a personalized plan for your investment horizon.

Remember, there's no one-size-fits-all answer. A CFP can guide you towards the right investment path for your financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7593 Answers  |Ask -

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

Asked by Anonymous - Oct 18, 2024Hindi
Money
Hlo sir, im vijaylaxmi 24 yrs old i want to do sip please suggest which fund is best to invest
Ans: Vijaylaxmi, it’s great that you want to start investing at the young age of 24.

Starting early gives you the benefit of time.

Your investment horizon is likely to be long, which is ideal for SIP investments.

Before selecting any fund, it's important to understand your financial goals.

You need to assess your risk tolerance, investment horizon, and financial objectives.

Since you are young, you can afford to take some risk, but that should align with your comfort level.

If you want to build wealth over the long term, equity mutual funds would suit your needs.

They have the potential to offer higher returns in the long run compared to other asset classes.

However, you should stay invested for at least 5-7 years to ride out market fluctuations.

Diversification Across Funds

It’s crucial to diversify your investments across different fund categories.

Diversification will reduce risk by spreading your money across different sectors and asset classes.

You can consider investing in large-cap funds, multi-cap funds, and mid-cap funds for diversification.

Each type of fund comes with its own level of risk and potential return.

Large-cap funds are more stable, while mid-cap and multi-cap funds can offer higher returns but come with higher volatility.

Why Not Index Funds?

You might hear people suggesting index funds, but let’s evaluate them.

Index funds simply track a market index like Nifty 50 or Sensex.

They don’t have active fund management, which means there’s no expert to make decisions during market ups and downs.

Although they have lower costs, their returns may not always outperform actively managed funds.

With actively managed funds, a professional fund manager selects stocks, making adjustments to take advantage of market opportunities.

The Benefits of SIP in Actively Managed Funds

SIP or Systematic Investment Plan is an excellent way to invest in mutual funds.

It helps you invest a fixed amount regularly, regardless of market conditions.

This instills financial discipline and reduces the impact of market volatility through rupee cost averaging.

You won’t need to worry about timing the market; SIP takes care of that for you.

Actively managed funds have the potential to outperform the market, especially when you stay invested over the long term.

When you invest through SIP in an actively managed fund, you get the expertise of a fund manager making strategic decisions to maximize returns.

Regular Funds Over Direct Funds

Now, let’s talk about the mode of investment.

Direct funds may seem attractive because they have lower expense ratios, but investing through regular funds offers benefits.

Regular funds give you access to the guidance of a Certified Financial Planner (CFP) or Mutual Fund Distributor (MFD).

Their advice can help you make informed decisions about your portfolio, especially if market conditions change.

A regular plan allows you to get ongoing support for your investment journey.

Investing through a Certified Financial Planner can help you align your portfolio with your financial goals.

They bring a deeper understanding of markets and can help optimize your asset allocation over time.

Flexibility in Fund Choices

While selecting funds, ensure that you pick flexible options.

Some funds are rigid and only invest in a certain category of stocks, which can limit their performance during different market cycles.

Flexible funds, like multi-cap funds, allow the fund manager to shift between large-cap, mid-cap, and small-cap stocks based on market conditions.

This flexibility can increase the fund’s chances of delivering consistent returns over time.

Equity Fund for Long-Term Goals

If your goal is long-term wealth creation, equity mutual funds are your best bet.

They generally outperform debt funds, FDs, and other conservative instruments over time.

Equity funds can offer better inflation-adjusted returns.

These funds invest in the stock market, which is why their potential for growth is higher.

However, they come with short-term volatility.

So, it’s important to have patience and a long-term perspective when investing in equity funds.

Growth or Dividend Option?

When investing in mutual funds, you will have to choose between the growth and dividend options.

Since you are young and likely looking to accumulate wealth, the growth option is more suited for you.

The growth option allows your investment to compound over time, as any profits earned by the fund are reinvested into the fund.

The dividend option provides periodic payouts, which is more suitable for investors seeking regular income.

In your case, you may not need regular income right now, so the growth option will help you build a larger corpus in the long run.

Taxation on Mutual Funds

When investing in mutual funds, it’s important to understand the tax implications.

For equity mutual funds, long-term capital gains (LTCG) are taxed at 12.5% after Rs 1.25 lakh.

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

This means if you sell your equity mutual fund units before three years, the gains will be taxed as STCG.

If you hold the fund for longer than three years, any gains above Rs 1.25 lakh will be taxed as LTCG.

Since your investment horizon is long-term, this will work in your favor as you can take advantage of the LTCG benefit.

Systematic Withdrawal Plan (SWP) for Future Income

In the future, when you achieve your financial goals, you can convert your SIP investments into a Systematic Withdrawal Plan (SWP).

An SWP allows you to withdraw a fixed amount of money from your investment at regular intervals.

This is an effective way to create a steady stream of income from your mutual fund investment.

It can be particularly useful for retirement planning.

Since you are young, you have plenty of time to grow your investments before you need to rely on SWP.

Final Insights

At the age of 24, starting an SIP is a brilliant move.

Your time horizon allows you to take on equity market risks, which can result in higher long-term returns.

Diversify your investments across different fund categories to balance risk and return.

Actively managed funds offer better prospects than index funds due to the expertise of fund managers.

Choosing the growth option will help you accumulate wealth faster, as your profits will be reinvested.

Remember to stay invested for at least 5-7 years to maximize your returns.

As you move forward, work with a Certified Financial Planner to review your portfolio and make adjustments when necessary.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Latest Questions
Nitin

Nitin Narkhede  |56 Answers  |Ask -

MF, PF Expert - Answered on Jan 21, 2025

Asked by Anonymous - Dec 01, 2024Hindi
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We two brothers have inherited a property on 200 sq yard by registered will of our father in 2020. The property was purchased by our father in 1970 and redeveloped in 1990 into three story building. Ground floor is with my brother and first floor. Third floor without roof rights was sold by our father at the time of redevelopment . Me and my brother have terrace rights as per registered will of our father ( each has 50% roof/ terrace rights). My brother is US citizen and want to sell his share for four crores. The expected rental income from the ground floor will be Rupees 60 thousand per month. The circle rate of the property is Rupees 7 lakh per yard. My interest in the ground floor of the property is mainly to live peacefully without any interference by unknown new buyer. I am 65 and my question is from financial point should I purchase from my brother by paying Rs. 4 crore or keep the amount in bank as fixed deposit/ RBI bonds at around 8 percent per year. Second question is if he sell it to other buyer how he will sell terrace as the terrace is undivided and we both have inherited it by registered will. Thirdly there are many builders who want to redevelop the property into four floor with basement and stilt parking. What will be the right option . I have only son .
Ans: Dear Friend,
If you’re considering whether to purchase your brother’s share of the inherited property for ?4 crore, weigh peace of mind against financial returns. Buying his share gives you full control, eliminates potential disputes with a third-party buyer, and ensures no interference in your peaceful living. However, the rental yield of ?60,000/month (~1.8% annual return) is significantly lower than the ~8% return you could get by investing ?4 crore in fixed deposits or bonds, which would generate ~?2.67 lakh/month.

Regarding the terrace, your brother cannot sell his 50% share independently since it is undivided and jointly inherited. Any sale requires your consent, limiting his ability to transfer full terrace rights to a new buyer.

Redevelopment of the property is an excellent option, offering increased value and rental income. Builders are likely to provide additional floors or cash components in exchange for development rights, enhancing long-term financial benefits and ensuring modern amenities.

If your priorities are peace of mind and control over the property, purchase your brother’s share. Otherwise, invest in safer financial instruments and consider redevelopment to maximise the property’s potential. Consult a lawyer and financial advisor to ensure the best decision. Your Financial adviser can deeply evaluate all your assets and liabilities and provide a solution which will give you more leverage.
Regards, Nitin Narkhede -Founder Prosperity Lifestyle Hub,
Free webinar https://bit.ly/PLH-Webinar

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Nitin

Nitin Narkhede  |56 Answers  |Ask -

MF, PF Expert - Answered on Jan 21, 2025

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Myself and my sister as joint owner of a property enteredvinto joint development agreementvwith a builder for construction of 8 flats in 4800 sq. Ft land. 2400 sq. Ft was retained for us with 4 flats constructed by builder to be given free of cost and 2400 sq. Ft UDS sold to builder thro PGPA for him to sell 4 flats. After selling 3 flats with 1800 sq. ft UDS by builder, we cancelled GPA and registered with SRO for retaing 600 Sq. ft UDS for our use with the consent agreeing to pay compensation for this cancel of GPA. Now I want clarification as to the ownership of the above said cancelled UDS of 600 Sq. ft as Joint owner or myself as per Joint developement agreement with a rider that myself will take possessionof 600 UDS by cancelling GPA later with builder and paying compensation st the mutually ahreed price. Builder says that myself is the owner for the cancelled 600 Sq. ft retained. I want to know whether I hv to register settlement deed for partingvwith 600 Sq. ft UDS by my sister or the statement of builder as myself will be the owner for 600 UDS regisyeted by cancelling GPA signed by the builder and both of us. Pl. Clarify.
Ans: Dear G,
The ownership of the 600 sq. ft. UDS (Undivided Share of Land) depends on the terms of the Joint Development Agreement (JDA) and the GPA cancellation deed. As per the JDA, the builder agreed to transfer the 600 sq. ft. UDS to you after GPA cancellation in return for compensation. If the GPA cancellation deed and subsequent agreements clearly state that this UDS belongs solely to you and these are registered with the Sub-Registrar’s Office (SRO), you are the legal owner. However, if your sister’s name still appears as a co-owner in the original title deed, you will need her to execute a **Settlement Deed** or **Gift Deed** in your favor, which must be registered to confirm your sole ownership and avoid disputes. The builder’s statement that you are the owner is valid only if it aligns with the registered documents. To confirm ownership, verify the SRO records to ensure the transfer has been legally recorded. If any gaps exist, consult a property lawyer to review the JDA, GPA cancellation deed, and builder’s agreement to ensure proper registration of ownership and resolve any ambiguity. This will safeguard your rights and provide clarity regarding the 600 sq. ft. UDS.
Regards, Nitin Narkhede -Founder Prosperity Lifestyle Hub,
Free webinar https://bit.ly/PLH-Webinar

...Read more

Nitin

Nitin Narkhede  |56 Answers  |Ask -

MF, PF Expert - Answered on Jan 21, 2025

Asked by Anonymous - Jan 14, 2025Hindi
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Hi sir/mam, I'm 32 years old working in a private firm as Manager. I own 9 lacs in FDs, accumulated 17 lacs in Mutual funds through SIP of around 23k pm (currently XIRR at 15-16% in with 75% in equity). I also have 2.5 lacs in PPF and 1.2 lacs in NPS. For tax savings I do yearly investments in PPF and NPS of about 1 lacs and rest I cover with ELSS (part of my SIPs). I want to retire at the age of 50, my current salary is 1.2 lac per month in hand, and receive few incentives of 1.5 lac a yr. I live in Mumbai with my wife and plan to buy a house of 60 lacs (out of which 20 L I'm borrowing from family, and rest of it will be loan with about 35k EMI). I also have a flat in NCR worth 80 L (purchased at 35 lacs), for which I have an EMI of 11k per month which is covered by rent I receive from there. I don't have kids yet, but I plan to have two of them. What should be my plan of investing that I can retire by max between 50 and 55 yrs of age with an upper middle class lifestyle in either Mumbai or NCR. How much should my corpus be? My current expenses are around 60k including rent in Mumbai, and my parents are independent. I have both health and life insurance of 1 cr+ cover.
Ans: Dear Friend,
To retire comfortably at 50-55 with an upper-middle-class lifestyle, you’ll need a retirement corpus of ?5 crore. Currently, your mutual funds, PPF, and NPS are projected to grow to ~?1.82 crore by 50. To bridge the gap of ?2.18 crore, increase your SIPs by ?30,000/month in equity funds, which can grow to ~?2.25 crore at 12% CAGR in 18 years. Prioritize repaying the ?20 lakh family loan after buying the Mumbai house, ensuring the ?35,000 EMI doesn’t hinder your additional investments. Post-retirement, rely on rental income from your NCR property and a 4% systematic withdrawal strategy from your corpus to cover inflation-adjusted expenses. Maintain ?5-6 lakhs in an emergency fund and continue tax-saving investments like ELSS, PPF, and NPS. Regularly review and rebalance your portfolio to stay aligned with your goals. With disciplined savings and investments, you’re on track for a secure retirement.
Regards, Nitin Narkhede
-Founder Prosperity Lifestyle Hub,
Free webinar https://bit.ly/PLH-Webinar

...Read more

Ramalingam

Ramalingam Kalirajan  |7593 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 21, 2025

Asked by Anonymous - Jan 20, 2025Hindi
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Hello sir, I am 35yo with 2 (4yo, 1yo) children. Can I retire now, with following corpus: mutual fund and stocks : 3.5 crore, lands: 50 lakh, PF&PPF: 80 lakh, FD: 25 lakh, SGB &Gold:50 lakh. Currently doesn't own any house. Monthly expense is around 1 lakh.
Ans: Your corpus and monthly expenses show a solid foundation. Retirement at 35, however, requires careful assessment. Let’s analyse your situation step by step.

Current Financial Assets and Allocations

Mutual Funds and Stocks: Rs 3.5 crore

This is a significant part of your corpus. Equity investments offer high growth potential.

Lands: Rs 50 lakh

Real estate investments are illiquid. Consider them only for long-term growth or inheritance.

PF and PPF: Rs 80 lakh

These provide stability and assured returns. These are good for meeting long-term goals.

Fixed Deposit: Rs 25 lakh

FDs are low-risk and ensure liquidity. This is beneficial for emergencies.

SGB and Gold: Rs 50 lakh

Gold is a strong hedge against inflation. It also offers diversification.

Monthly Expense Analysis

Your monthly expense of Rs 1 lakh equates to Rs 12 lakh annually.

Accounting for inflation, this expense will grow over time. Planning for this is crucial.

Core Observations

Your total corpus is Rs 5.55 crore. This is substantial for your age.

Inflation and rising expenses over time will impact your corpus.

Without a house, rent becomes a recurring expense. Factor this into your calculations.

You have no guaranteed income sources post-retirement.

Key Areas of Improvement

Housing

Consider buying a house if feasible. Owning a house ensures stability and reduces rent.

Do not invest excessively in real estate as it is illiquid.

Corpus Utilisation

Avoid over-reliance on equity investments for withdrawals. Equity is volatile in the short term.

Use a mix of debt and equity for regular withdrawals.

Children’s Education and Marriage

Both are major financial goals. Plan dedicated investments for these.

Use long-term instruments for education and marriage funds.

Emergency Fund

Maintain an emergency fund of at least 12 months of expenses.

Keep it in liquid funds or high-yield savings accounts.

Recommended Financial Strategies

Asset Allocation

Diversify your portfolio across equity, debt, and gold.

Maintain 60% equity, 30% debt, and 10% gold as a starting point. Adjust as needed.

Mutual Fund Investments

Continue with actively managed funds. These can outperform index funds in emerging markets like India.

Avoid direct funds if you lack time or expertise. Regular funds offer advisor support and insights.

Debt Investments

Increase debt allocation for stability. Consider high-quality debt mutual funds.

Ensure these align with your withdrawal needs.

Tax Planning

Monitor tax implications of mutual fund withdrawals.

LTCG from equity funds above Rs 1.25 lakh is taxed at 12.5%.

Plan withdrawals to minimise tax liabilities.

Insurance Needs

Ensure adequate health insurance for your family. Cover at least Rs 25 lakh for each member.

Check if you have term insurance. Secure Rs 2-3 crore coverage for your family’s financial safety.

Inflation and Lifestyle Adjustments

Inflation can erode your purchasing power. Plan investments to counter inflation.

Avoid lifestyle inflation. Stick to essential expenses wherever possible.

Income Generation Options

Systematic Withdrawal Plans (SWP)

Use SWP from mutual funds for regular income.

Choose hybrid funds for better stability and returns.

Rental Income

Invest part of your corpus in commercial properties.

Ensure this aligns with your liquidity needs and risk profile.

Freelance or Part-Time Work

Consider light work for additional income. It can extend your corpus.

Use your skills to generate flexible income streams.

Monitoring and Review

Review your portfolio annually. Adjust allocations as goals evolve.

Work with a Certified Financial Planner for periodic checks.

Final Insights

Retirement at 35 is ambitious but achievable with meticulous planning. Your current corpus is strong, but consider the following:

Plan for inflation, children’s needs, and healthcare costs.

Diversify investments and secure guaranteed income sources.

Avoid premature decisions. Evaluate thoroughly before retiring.

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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