I am 55 year old with no job. I am currently living with my parents and have another flat whose current value is around 65 Lac and saving of 20 Lac. I have two daughters , one i doing final year BBA and other is in 12th. I want to sell my flat due to financial problem but my parents are not ready. My father retired from government service and is getting good pension. please suggest

Ans: Life insurance policies typically offer bonuses on top of the death benefit. These bonuses can be:

Maturity bonuses: Paid if you survive the policy term.
Loyalty bonuses: Rewarded for staying with the insurer for a long time.
Terminal bonuses: A one-time bonus paid upon death or policy maturity.
The amount and type of bonus depend on the specific policy and insurer.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: No, unlike stocks, you cannot watch Mutual Funds "live" every day like you can with stocks. Here's why:

Trading Frequency: Mutual funds are typically traded only once a day, at the Net Asset Value (NAV) calculated after the market closes. Stocks, on the other hand, trade continuously throughout the trading day, so their price fluctuates constantly.

NAV Calculation: The NAV of a mutual fund reflects the underlying value of all the assets it holds (stocks, bonds, etc.). This value is calculated only after the market closes when the final prices of those assets are known.

However, you can still track the performance of your mutual funds regularly. Here are some ways:

Mutual Fund Websites: Most mutual fund companies update their websites daily with the NAV of their schemes. You can find the latest NAV for your funds there.

Investment platforms: If you invest through an online investment platform, they will typically display the latest NAV of your holdings within their interface.

Financial News Websites: Many financial news websites provide mutual fund quotes, although these might not be the most up-to-date NAV.

While you can't watch mutual funds live, tracking their NAV daily isn't necessary. Focus on your long-term investment goals and avoid making impulsive decisions based on short-term fluctuations.

Here are some additional points to remember:

Focus on Long-Term: Mutual funds are meant for long-term wealth creation. Don't get caught up in daily NAV movements.
Periodic Reviews: Regularly review your mutual fund portfolio (quarterly or annually) to ensure it aligns with your goals.
Professional Guidance: Consider consulting a Certified Financial Planner (CFP) for personalized investment advice.
I hope this explanation clarifies the difference between tracking stocks and mutual funds.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: Creating a corpus of 1 crore by 2030 while ensuring a good medical policy for your mother is crucial. Given the difficulty in obtaining a policy due to her arthritis, let's evaluate options.

Firstly, let's address your goal. With your current salary and annual increment, achieving a corpus of 1 crore by 2030 is feasible. Regularly invest a portion of your income in diversified portfolios managed by a Certified Financial Planner.

Regarding your mother's medical needs, since companies are hesitant to provide policies, consider setting aside a portion of your savings as a medical contingency fund. This fund can cover her ongoing medication expenses and any unforeseen medical emergencies.

Additionally, explore alternative avenues such as group medical insurance policies offered by professional associations or government schemes catering to senior citizens. These options might provide coverage despite her pre-existing condition.

While it's challenging to find a suitable medical policy, it's essential to remain proactive and explore all available options. Consult with a Certified Financial Planner to tailor a financial plan that accommodates both your investment goals and your mother's healthcare needs.

In conclusion, achieving your financial goals while ensuring your mother's well-being requires careful planning and consideration of various options. Stay diligent, and with the right strategy, you can navigate these challenges successfully.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: It's commendable that you've started investing at a young age and have already begun building an emergency fund. Let's outline a plan to help you achieve your financial goal of building a corpus of 50 lakhs to 1 crore by the time you turn 35.

Review Current Investments: Continue your SIP investments in mutual funds as you've been doing. Since you're comfortable with a monthly SIP of 20k, ensure that the funds you've chosen align with your risk tolerance and long-term financial goals.

Increase Savings: As your income grows or expenses decrease (such as after paying off your EMIs in 4 months), consider increasing your monthly SIP contributions. Aim to allocate a higher percentage of your salary towards investments while maintaining a healthy balance for living expenses and savings.

Diversify Portfolio: While SIPs are a great way to invest systematically, consider diversifying your investment portfolio by exploring other asset classes such as equity, debt, and possibly real estate in the future. Diversification helps spread risk and maximize returns over the long term.

Monitor and Rebalance: Regularly review the performance of your investments and make adjustments as needed. Rebalance your portfolio periodically to ensure it remains aligned with your financial goals and risk tolerance.

Emergency Fund: Continue building your emergency fund until it reaches at least 6-12 months' worth of living expenses. This fund will provide a financial safety net in case of unexpected expenses or job loss.

Set Milestones: Break down your financial goal of 50 lakhs to 1 crore by age 35 into smaller, achievable milestones. Set targets for each year or every few years to track your progress and stay motivated.

Seek Professional Advice: Consider consulting with a Certified Financial Planner who can provide personalized guidance based on your financial situation and goals. They can help you create a customized financial plan and provide recommendations for achieving your target corpus.

By staying disciplined in your savings and investment approach, increasing your contributions over time, and periodically reviewing your portfolio, you can work towards achieving your goal of building a significant corpus by the time you get married.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It sounds like you're navigating a significant transition period with your job and housing plans. Let's outline some steps for your financial management and explore new savings ideas.

Evaluate Current Finances: Firstly, assess your current financial situation, including your savings, investments, and liabilities. Understand your cash flow and expenses to make informed decisions.

Budgeting: Develop a monthly budget considering your income, expenses, and savings goals. Allocate funds for essential expenses, loan EMIs, and savings for your future goals, including the land purchase and eventual home loan EMIs.

Emergency Fund: Prioritize building an emergency fund to cover unexpected expenses or financial emergencies. Aim to set aside at least three to six months' worth of living expenses in a liquid savings account.

Resume SIPs and NPS Contributions: Consider restarting your SIPs and NPS contributions to continue building your investment portfolio for long-term financial security. These systematic investments can help you accumulate wealth over time.

Land Purchase: Since you're planning to invest in land for a home, ensure thorough due diligence before proceeding. Evaluate factors like location, legal clearances, and future development prospects. Negotiate payment terms that align with your financial capabilities.

Loan Planning: When taking a property/land loan after nine months, ensure you're comfortable with the EMI payments and factor them into your budget. Compare loan options from different lenders to secure the best terms and interest rates.

Gold Assets: While gold can provide liquidity, consider diversifying your investments into other asset classes for long-term growth potential. Review your gold holdings periodically and decide whether to continue holding or liquidate based on your financial goals.

New Savings Ideas: Explore additional avenues for savings and investments, such as:

Tax-saving investments like Equity Linked Savings Schemes (ELSS) or Public Provident Fund (PPF).
Regular contributions to a retirement corpus through schemes like the National Pension System (NPS) or Voluntary Provident Fund (VPF).
Building a diversified investment portfolio with a mix of equity mutual funds, debt instruments, and possibly real estate investment trusts (REITs) for added diversification.
Remember to consult with a financial advisor to tailor a plan that aligns with your specific financial goals and risk tolerance. Stay disciplined in your savings and investment approach to achieve long-term financial stability and security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Considering your age and the relatively shorter time horizon of six years, Mutual Funds (MFs) appear to be a more suitable option for potential growth compared to individual stocks.

Mutual Funds offer diversification across a basket of securities, reducing the risk associated with investing in individual stocks. With professional fund management, MFs aim to deliver optimal returns while managing risk effectively.

Moreover, MFs offer a range of options catering to various risk appetites and investment goals. You can choose from equity funds, debt funds, balanced funds, etc., based on your risk tolerance and financial objectives.

Additionally, MFs provide liquidity, allowing you to easily buy and sell units as needed. This liquidity feature is particularly beneficial if you anticipate needing access to your funds within the next six years.

Furthermore, MFs offer the advantage of SIPs (Systematic Investment Plans), enabling you to invest regularly over time, which can potentially help mitigate the impact of market volatility through rupee-cost averaging.

While individual stocks may offer the potential for higher returns, they also come with higher risks, especially in a relatively short six-year timeframe. Stock prices can be volatile and subject to market fluctuations, making it challenging to predict consistent returns within a short period.

In summary, Mutual Funds offer a balanced approach to investment, combining diversification, professional management, liquidity, and the convenience of SIPs, making them a preferable choice for potential growth over the next six years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello. Thank you for contacting us. It is good to hear that you have tried to immigrate to Canada and Australia. However, let me tell you that we don’t deal with immigration services at the moment. But we can surely help you with higher studies in your country and program of choice. We also have other services like IELTS, TOEFL, GRE, GMAT, and so forth. If you have queries regarding the same, do let us know. We would be more than happy to help.

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Ans: It's great to see you investing through SIPs, a disciplined approach towards wealth creation. Let's review your portfolio and make some suggestions.

Starting with UTI NIFTY 50 Index Fund, investing in a broad market index like NIFTY 50 can provide exposure to the overall performance of the Indian equity market. It's a good choice for passive investors seeking market returns.

Parag Parikh Flexi Cap Fund offers a diversified portfolio with flexibility to invest across market caps and sectors. It's known for its consistent performance and prudent investment approach.

Bandhan Nifty 50 Index Fund provides exposure to the NIFTY 50 index, similar to UTI NIFTY 50 Index Fund. However, having two funds tracking the same index might lead to overexposure and lack of diversification.

Active vs. Passive Management:
While you've included both actively managed mutual funds and index funds (ETFs) in your portfolio, it's important to understand the differences between the two. Actively managed funds aim to outperform the market through active stock selection and portfolio management, while index funds passively track a specific index's performance.
Benefits of Actively Managed Funds:
Actively managed funds offer the potential for higher returns compared to index funds, especially during market inefficiencies or when skilled fund managers can identify lucrative investment opportunities. Additionally, active management allows for flexibility in portfolio construction and adjustments based on market conditions.
Potential Disadvantages of Index Funds:
While index funds offer low expense ratios and broad market exposure, they may lack the potential for outperformance compared to actively managed funds. Additionally, they're subject to tracking error, which occurs when the fund's performance deviates from the index it's designed to replicate.

Quant Small Cap Fund invests in small-cap stocks, which have the potential for high growth but come with higher volatility and risk. While small-cap funds can be rewarding in the long term, they require patience and a higher risk appetite.

Considering your current portfolio, here are some suggestions:

Diversification: Since you already have exposure to NIFTY 50 index through UTI and Bandhan funds, you might consider reallocating the investment in Bandhan Nifty 50 Index Fund to a different asset class or fund category for better diversification.

Risk Management: Given the volatility associated with small-cap funds, evaluate your risk tolerance and consider whether you're comfortable with the risk-return profile of Quant Small Cap Fund. You may adjust the allocation or switch to a less volatile option if needed.

Review Regularly: Keep an eye on the performance of your funds and review your portfolio periodically. As your financial goals and market conditions evolve, you may need to rebalance your portfolio or make adjustments accordingly.

Seek Professional Advice: Consulting with a Certified Financial Planner can provide personalized guidance tailored to your financial situation and goals.

Overall, your portfolio reflects a mix of passive and actively managed funds, providing diversification across market segments. Ensure you stay invested for the long term and maintain a disciplined approach towards your SIPs.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It's wonderful to see your proactive approach towards financial planning, especially at a young age. Congratulations on your investments and upcoming milestone of starting a family!

Having a stable base with a home and a car is a significant advantage, allowing you to focus more on building your savings and investments.

Investing in ELSS (Equity Linked Savings Scheme) is a smart move, considering its potential for wealth accumulation over the long term and tax-saving benefits under Section 80C of the Income Tax Act. However, it's essential to diversify your portfolio to spread risk.

Given your goal of accumulating 3 crores by the age of 55, you have a considerable time horizon ahead. It's advisable to adopt a disciplined approach towards saving and investing regularly. Consider allocating your savings across different asset classes like equities, debt, and possibly real estate or other alternative investments, depending on your risk appetite and financial goals.

As you're starting a family soon, it's crucial to ensure adequate financial protection for your loved ones. Look into term insurance plans to provide financial security to your family in case of any unfortunate event.

Moreover, since you're relatively new to equity trading and have experienced some losses, it's essential to approach it with caution. Consider focusing more on long-term investments like mutual funds rather than speculative trading, especially considering your long-term financial goals.

As your income grows, aim to increase your savings and investments proportionately. Regularly review your financial plan and make adjustments as needed to stay on track towards achieving your goals.

Remember, patience, consistency, and discipline are key to building wealth over the long term. Best wishes for your journey towards financial independence and starting a family!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in