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Sunil

Sunil Lala  |203 Answers  |Ask -

Financial Planner - Answered on Nov 05, 2023

Sunil Lala founded SL Wealth, a company that offers life and non-life insurance, mutual fund and asset allocation advice, in 2005. A certified financial planner, he has three decades of domain experience. His expertise includes designing goal-specific financial plans and creating investment awareness. He has been a registered member of the Financial Planning Standards Board since 2009.... more
Sanjay Question by Sanjay on Oct 22, 2023Hindi
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Hi, I am 51 yrs old. I want to invest 15k/month. I want to retire at the age of 58 with monthly income of Rs. 40k. Where & how to invest for that retirement income?

Ans: 15k/month investment is too less to have an income of 40k. You need to invest 60k/month to achieve your target of 40k/month
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  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 04, 2024

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Hello sir I am 34 years old I want to invest 50000 per month for my retirement I want to invest a sum of Rs.
Ans: Investing 50,000 per month for your retirement is a prudent decision. Here's a general approach you can consider:

Determine Investment Horizon: Since retirement is typically a long-term goal, it's essential to identify your investment horizon. Given your age of 34, you may have a retirement horizon of around 25-30 years.

Asset Allocation: Based on your risk tolerance and investment horizon, consider allocating your investment across different asset classes such as equity, debt, and potentially other assets like real estate or gold. A common rule of thumb for long-term goals like retirement is to have a higher allocation to equity for growth potential.

Equity Investments: Allocate a significant portion of your investment towards equity mutual funds. You can diversify across large-cap, mid-cap, and small-cap funds to spread the risk and maximize growth potential. Consider both diversified equity funds and sector-specific funds based on your risk appetite.

Debt Investments: Allocate a portion of your investment towards debt mutual funds for stability and regular income. Debt funds can provide capital preservation and generate steady returns over the long term. Consider options like dynamic bond funds, short-term funds, or gilt funds based on your risk profile.

Systematic Investment Plan (SIP): Consider investing through SIPs to benefit from rupee cost averaging and mitigate the impact of market volatility. SIPs allow you to invest a fixed amount regularly in mutual funds, regardless of market conditions.

Review and Rebalance: Regularly review your investment portfolio and rebalance it if needed to ensure it remains aligned with your financial goals and risk tolerance. Rebalancing involves adjusting your asset allocation based on market movements and changes in your investment objectives.

Consult a Financial Advisor: Consider seeking guidance from a certified financial advisor who can help you create a personalized investment plan tailored to your financial goals, risk profile, and investment horizon.

Remember, investing for retirement is a long-term commitment, and consistency, discipline, and patience are key to achieving your financial objectives.

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Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 04, 2024

Asked by Anonymous - Jun 03, 2024Hindi
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Sir. I am 45 currently with gross income of Rs 2.5 lakhs and take home.salary of rs 1.70 lakhs. I want to retire at 60 with monthly income of rs 2.5 lakhs. Kindly advice how much and where to invest to achieve my goals
Ans: Evaluating Your Retirement Goal
Your goal to retire at 60 with a monthly income of Rs 2.5 lakhs is ambitious and achievable with proper planning. Let's break down the steps to achieve this goal.

Current Financial Position
Gross Income: Rs 2.5 lakhs per month.

Take Home Salary: Rs 1.70 lakhs per month.

You have 15 years until retirement. Time is your biggest asset in building a substantial retirement corpus.

Estimating Retirement Corpus
Desired Monthly Income Post-Retirement: Rs 2.5 lakhs.

Annual Requirement: Rs 2.5 lakhs * 12 = Rs 30 lakhs.

Inflation Adjustment: Assuming an average inflation rate of 6%, the future value of Rs 30 lakhs in 15 years would be approximately Rs 72 lakhs annually.

Retirement Corpus Calculation: To generate Rs 72 lakhs annually, assuming a safe withdrawal rate of 4%, you will need a corpus of approximately Rs 18 crores.

Investment Strategy
1. Determine Monthly Savings:

Based on your current income and expenses, determine how much you can save and invest each month. Ideally, aim to save and invest at least 30-40% of your take-home salary.

2. Diversified Portfolio:

Invest in a diversified portfolio of mutual funds, stocks, and fixed income instruments. This balances risk and growth.

Investment Options and Allocation
Equity Mutual Funds:

Growth Potential: High returns over the long term.
Risk: High volatility, but suitable for a 15-year horizon.
Allocation: Allocate around 60-70% of your savings here.
Debt Mutual Funds:

Stability: Lower risk and stable returns.
Purpose: Balances the portfolio and provides safety.
Allocation: Allocate around 20-30% here.
Public Provident Fund (PPF):

Safety: Government-backed and risk-free.
Tax Benefits: Offers tax-free returns.
Allocation: Consider contributing up to the maximum limit.
Systematic Investment Plan (SIP):

Regular Investment: Invest a fixed amount monthly in mutual funds.
Rupee Cost Averaging: Reduces the impact of market volatility.
Calculating Monthly Investment
Future Value Calculation:

To reach Rs 18 crores in 15 years, calculate the monthly investment required. Assuming an average annual return of 12% from your investments:
FV = Future Value (Rs 18 crores)
PV = Present Value (monthly investment)
r = monthly return (1% for 12% annual)
n = number of months (180 months for 15 years)
Using financial formulas or a retirement calculator can provide precise figures. However, a rough estimate suggests investing approximately Rs 1 lakh per month.

Steps to Implement the Plan
1. Automate Savings:

Set up automatic transfers to your investment accounts. This ensures disciplined saving and investing.

2. Regular Review:

Review and adjust your investment portfolio annually. Ensure it aligns with your goals and risk tolerance.

3. Emergency Fund:

Maintain an emergency fund covering at least 6-12 months of expenses. This ensures you don't dip into your retirement savings for emergencies.

4. Health Insurance:

Ensure adequate health insurance coverage. Medical expenses can be a significant burden in retirement.

Benefits of Investing through MFD
Professional Guidance:

Certified financial planners and MFDs provide expert advice on fund selection and investment strategies.

Regular Monitoring:

MFDs regularly monitor and review your portfolio, ensuring it remains aligned with your goals.

Tax Efficiency:

Professionals help in structuring your investments to maximize tax benefits.

Conclusion
With a disciplined investment strategy and regular review, achieving your retirement goal is feasible.

Invest in a diversified portfolio, automate savings, and consult with a certified financial planner for personalized advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 06, 2024

Asked by Anonymous - Jul 01, 2024Hindi
Money
Hi sir, my age is 37 years. I can invest 30K in a month, can increase 10% annually and want to retire at 50. Please suggest where to invest and how much amount in each scheme. I want to get a fixed income at retirement.
Ans: It’s fantastic that you’re planning your retirement at 50. At 37, you have a good 13 years to build a solid financial base. Investing Rs. 30,000 per month with a 10% annual increase can significantly grow your wealth over time.

Let’s dive into a strategic plan to help you achieve a fixed income post-retirement.

Current Investment Capacity and Future Goals
Monthly Investment Potential
You can invest Rs. 30,000 per month and plan to increase it by 10% annually. This disciplined approach, combined with the power of compounding, will be highly beneficial.

Example:

First Year: Rs. 30,000 per month.
Second Year: Rs. 33,000 per month.
Third Year: Rs. 36,300 per month.
This incremental increase boosts your savings significantly over time.

Retirement Goal
You aim to retire at 50, giving you 13 years to build a retirement corpus that provides a fixed income. A well-diversified portfolio is essential to achieve this goal.

Investment Strategy
To build a robust portfolio, a mix of equity, debt, and hybrid investments is recommended. Each has its advantages and risks, which we’ll explore.

Equity Investments
Equity Mutual Funds
Equity mutual funds invest in the stock market and have the potential for high returns. They are managed by professional fund managers who select stocks based on extensive research.

Advantages:

High Growth Potential: Equity funds can offer substantial returns over the long term.
Diversification: Spread across multiple sectors and companies reduces risk.
Professional Management: Experts manage the funds, making investment decisions for you.
Recommendation:

Allocate 60-70% of your monthly investment to equity mutual funds. Given your investment horizon of 13 years, you can afford to take on higher risk for higher potential returns.

Types of Equity Funds to Consider:

Large-Cap Funds: Invest in established companies with stable returns. Lower risk compared to other equity funds.
Mid-Cap and Small-Cap Funds: Invest in smaller companies with high growth potential. Higher risk but can offer higher returns.
Diversified Equity Funds: Invest across various sectors and company sizes, balancing risk and reward.
Debt Investments
Debt Mutual Funds
Debt mutual funds invest in fixed-income securities like bonds, government securities, and corporate debt. They provide steady returns with lower risk.

Advantages:

Stability: Lower risk compared to equity funds.
Regular Income: Provide consistent returns, suitable for conservative investors.
Liquidity: Easier to liquidate compared to long-term fixed deposits.
Recommendation:

Allocate 20-30% of your monthly investment to debt mutual funds. This allocation provides stability to your portfolio and cushions against equity market volatility.

Types of Debt Funds to Consider:

Short-Term Debt Funds: Suitable for investments up to 3 years. Offer better returns than savings accounts and FDs.
Medium to Long-Term Debt Funds: For investments beyond 3 years. Offer higher returns compared to short-term funds.
Dynamic Bond Funds: Adjust the portfolio based on interest rate movements, providing flexibility.
Hybrid Investments
Balanced or Hybrid Funds
Hybrid funds invest in both equity and debt instruments. They balance the risk and return by combining the growth potential of equities with the stability of debt.

Advantages:

Balanced Risk: Reduces risk by diversifying across equity and debt.
Moderate Returns: Offers moderate returns, lower than pure equity but higher than pure debt funds.
Flexibility: Fund managers adjust the equity-debt mix based on market conditions.
Recommendation:

Allocate 10-20% of your monthly investment to hybrid funds. They provide a balanced approach, suitable for steady growth with lower risk compared to pure equity funds.

Systematic Investment Plan (SIP) Approach
Benefits of SIPs
Investing through SIPs in mutual funds offers several advantages, especially for salaried individuals with a fixed monthly budget.

Advantages:

Disciplined Investing: Automates investments, ensuring regular contributions.
Rupee Cost Averaging: Buys more units when prices are low and fewer when prices are high, averaging out the cost.
Flexibility: Start with small amounts and increase contributions over time.
Recommendation:

Start SIPs in the chosen mutual funds. Allocate Rs. 30,000 per month initially, and plan to increase by 10% annually.

Rebalancing and Reviewing Your Portfolio
Importance of Regular Reviews
Regularly reviewing and rebalancing your portfolio ensures it stays aligned with your financial goals and risk tolerance.

Advantages:

Alignment with Goals: Adjust investments based on your changing goals and market conditions.
Risk Management: Reduces exposure to overperforming or underperforming assets.
Optimal Returns: Capitalizes on market opportunities while managing risk.
Recommendation:

Review your portfolio at least once a year. Consider consulting a Certified Financial Planner for professional advice on necessary adjustments.

Ensuring Adequate Insurance Coverage
Health and Life Insurance
Adequate insurance coverage is crucial to protect against unforeseen events and financial hardships.

Health Insurance:

Coverage for Medical Costs: Prevents significant out-of-pocket expenses during medical emergencies.
Comprehensive Policy: Opt for a policy that covers a wide range of medical needs.
Life Insurance:

Protection for Family: Provides financial security to dependents in case of your untimely demise.
Sufficient Coverage: Ensure coverage is adequate to cover debts, future expenses, and support dependents.
Recommendation:

Review and update your insurance coverage regularly. Adequate health and life insurance are essential components of a solid financial plan.

Power of Compounding
Maximizing Compounding Benefits
The power of compounding grows your investments exponentially over time, especially when you start early and stay invested.

Advantages:

Growth Over Time: Small, regular investments can grow significantly.
Reinvestment of Returns: Earnings generate more returns, creating a compounding effect.
Long-Term Wealth Creation: Compounding can significantly boost your retirement corpus.
Recommendation:

Stay disciplined with your SIPs and increase your contributions annually. The longer you stay invested, the more your wealth compounds.

Retirement Corpus and Fixed Income Post-Retirement
Building a Retirement Corpus
To achieve a fixed income post-retirement, build a substantial retirement corpus that generates a steady income stream.

Considerations:

Longevity: Plan for at least 25-30 years post-retirement.
Inflation: Factor in rising costs over time.
Desired Lifestyle: Estimate the monthly income required to maintain your desired lifestyle.
Recommendation:

Focus on growing your retirement corpus through equity and hybrid funds. Gradually shift to more stable investments as you approach retirement.

Generating Fixed Income
Once retired, convert your corpus into income-generating investments that provide a fixed monthly income.

Options to Consider:

Systematic Withdrawal Plan (SWP): Withdraw a fixed amount from mutual funds periodically.
Debt Instruments: Invest in debt funds or fixed deposits for regular interest income.
Hybrid Funds: Continue investing in hybrid funds for balanced growth and income.
Recommendation:

Plan a strategy to convert your retirement corpus into a steady income stream. A combination of SWP from mutual funds and investments in debt instruments can provide the desired fixed income.

Final Insights
At 37, you’re well-positioned to build a strong financial future and retire comfortably at 50. With disciplined investing and strategic planning, you can achieve your retirement goals and enjoy a fixed income post-retirement.

Mutual Funds: Start SIPs in equity, debt, and hybrid mutual funds to diversify your portfolio and maximize returns.

Incremental Investments: Increase your monthly investment by 10% annually to leverage the power of compounding.

Portfolio Review: Regularly review and rebalance your portfolio to stay aligned with your goals and market conditions.

Insurance Coverage: Ensure adequate health and life insurance to protect against unforeseen events and secure your family’s future.

Retirement Corpus: Focus on growing a substantial retirement corpus that generates a steady income stream through a combination of SWP and debt investments.

Consult a CFP: Work with a Certified Financial Planner to tailor your investment strategy and make informed decisions.

With careful planning and disciplined investing, you can achieve your retirement dreams and enjoy financial independence.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ravi

Ravi Mittal  |450 Answers  |Ask -

Dating, Relationships Expert - Answered on Dec 03, 2024

Asked by Anonymous - Dec 03, 2024Hindi
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Relationship
Hello, my wife is Ugandan and I’m of English national, 30 years old and she’s 26, we met nearly a year ago and got married in uk with some of her friends and small family. We haven’t done kuchala (not sure if that’s correct spelling) yet and I’m feeling anxious for when the time comes. She said her family will kneel when they greet me and being white this is already stinging my moral (due to history). I also talked about moving in together before the meet the parents happen however she says she’s rather move in after? Currently this could take two years before going to Uganda, how should I proceed without overstepping her cultural beliefs as after all we are married and by my culture we should already be living together
Ans: Dear Anonymous,
It is very nice of you to be so considerate and sensitive while handling these cultural nuances. Let's discuss the kneeling tradition. It's a sign of respect and it's deeply rooted in Ugandan culture. While I understand your point of view, you also have to remember that it can have significant meaning to her and her family. I suggest you politely express your feelings and let her know why it is uncomfortable for you to see her family kneel. When you explain, mention how much her culture means to you as well. I am sure both of you can communicate and come to a compromise that makes you both happy. Just in case, they persist in following the ritual, just look at it as a gesture of love and respect and not submission.

About the moving in together part, in certain parts of the world, couples living together before the traditional wedding is not considered respectful. But since you are already married, you can try explaining to your wife how the living situation does not go against her cultural expectations. But if it is a really big deal for her and her family, consider seeing it from her perspective.

Communication is everything here. Look at every problem as a team; it's not your problem vs her problem. It's both of you vs the problems.

I hope this helps

...Read more

Radheshyam

Radheshyam Zanwar  |1088 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 03, 2024

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Career
I have received a job offer from Siecorp ,a Singapore based company though my posting would be at my hometown . They have asked me to submit all credentials related to education & job experiences which is quite normal but they have asked the following documents also which they said would help me to arrange through some agent by payment & the same would be reimbursed during first month of employment . Earlier also another overseas company asked for the same & I denied to make payment before having the job in hand . 1. Construction Health and Safety Technician (CHST) – Compulsory 2. OSHA Safety Certificate – Compulsory 3. Safety Trained Supervisor (STS) – Non-Compulsory Kindly advise whether these certificates are really required to be submitted to join any foreign company or any sort of cheating business regards,
Ans: Hello Bipradas.
From your query, it is clear that you have offered by job by a Singapore-based company and they are giving you a posting in your home town. You did not mention anything about the work culture of the company. It simply indicates that you are supposed to work from home which is always related to computers. I think there is no harm in producing the required documents through an agent if they are offering you a handsome salary. The requirement for documents differs from company to company. There is no harm in submitting the mentioned documents. If have fear in your mind, then please go through the profile of the company in detail before submitting the documents. There are many ways to check the authenticity of the company. There are some chances of cheating, but everybody is not indulged in the same category. But take the steps with utmost precaution.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
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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