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Ramalingam

Ramalingam Kalirajan  |6558 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 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 - May 16, 2024Hindi
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I am 56 year old Monthly income is 50K i.e pension. Presently I am investing 20 K in SIP, corpus is 20 lacs. PPF 15Lacs. Bank FDs 40 lacs, 2 resedential Plots worth 1.25Cr. 01 daughter She is MBBS and doing MD from Govt Medical College. I have my own house, no loans. I feel there should more income through passive mode. Kindly suggest is this invesment are ok and what are available avenues/opportunities for me to generate passive income.

Ans: First, congratulations on your well-managed finances. With a stable pension income, significant investments in SIPs, PPF, and FDs, and valuable real estate, you have a solid financial foundation.
Evaluating Your Investments
Monthly Income and Savings
1. Pension: You receive a monthly pension of ?50,000.
2. SIP Investment: You invest ?20,000 monthly in SIPs, which is a commendable practice for long-term growth.
Existing Corpus
1. Mutual Fund Corpus: Your SIPs have built a corpus of ?20 lakhs.
2. PPF Investment: You have ?15 lakhs in PPF, offering stable, tax-free returns.
3. Fixed Deposits: You have ?40 lakhs in bank FDs, providing secure but lower returns.
Real Estate Holdings
1. Residential Plots: Your two residential plots are worth ?1.25 crores, a significant asset.
2. Own House: You have your own house, ensuring no rental expenses.
Enhancing Passive Income
To increase passive income, consider the following strategies:
Rebalancing Your Portfolio
1. Diversify Investments: While FDs and PPFs are safe, they offer lower returns. Consider reallocating some funds to higher-yield investments.
2. Mutual Funds: Continue with SIPs, but explore equity-oriented balanced funds for higher returns with managed risk.
Exploring Dividend-Paying Investments
1. Dividend Stocks: Invest in blue-chip companies with a history of paying consistent dividends. This provides regular income and potential capital appreciation.
2. Debt Mutual Funds: Consider debt funds that offer better returns than FDs with moderate risk.
Real Estate Income
While not suggesting real estate as a primary investment, consider leveraging your existing assets:
1. Rent Out Plots: If feasible, rent out the residential plots for additional income.
2. REITs: Consider investing in Real Estate Investment Trusts (REITs) for regular income without the hassle of managing properties.
Fixed Income Instruments
1. Senior Citizens' Saving Scheme (SCSS): This scheme offers higher interest rates for senior citizens and provides regular income.
2. Monthly Income Plans (MIPs): Invest in MIPs offered by mutual funds that provide monthly dividends, ensuring a steady income stream.
Reviewing and Adjusting Investments
1. Consult a CFP: Regularly review your portfolio with a Certified Financial Planner to ensure it aligns with your financial goals.
2. Stay Updated: Keep informed about new investment opportunities and adjust your portfolio accordingly.
Considering Risks and Returns
1. Balanced Approach: Maintain a balance between risk and return by diversifying across various asset classes.
2. Risk Management: Ensure a portion of your portfolio remains in low-risk investments to safeguard against market volatility.
Planning for Future Expenses
1. Medical Expenses: With your daughter pursuing MD, future medical expenses should be planned for, possibly through a dedicated health fund.
2. Emergency Fund: Maintain an emergency fund equivalent to at least six months of expenses.
Conclusion
Your financial strategy is commendable, and you have built a robust portfolio. To enhance passive income, consider diversifying into higher-yield investments while maintaining a balanced risk approach. Regular reviews and adjustments with the help of a Certified Financial Planner will ensure your investments remain aligned with your goals.
Genuine Compliments and Appreciation
Your diligent financial planning is impressive and sets a great example. Your commitment to securing your financial future and providing for your family is truly admirable.
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  |6558 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

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Hello Sir I wud like to earn 30 k passive income per month Wat type of investment wud u suggest for the same. The amount generated can b lympsum as well as I dnt require a payout
Ans: Strategies for Generating Passive Income

Assessment of Financial Goal

Your objective of earning Rs. 30,000 per month in passive income reflects a prudent desire for financial independence and stability. Achieving this goal requires a strategic investment approach tailored to your individual circumstances and risk tolerance.

Evaluation of Investment Options

Several investment avenues offer the potential to generate passive income, including dividend-paying stocks, bonds, mutual funds, and real estate investment trusts (REITs). Each option has its unique characteristics, advantages, and risks.

Analysis of SWP as a Strategy

Systematic Withdrawal Plan (SWP) emerges as a suitable strategy for generating regular income without depleting the principal amount. With SWP, you can specify the desired withdrawal amount and frequency, ensuring a steady stream of income.

Assessment of Investment Allocation

To generate Rs. 30,000 per month in passive income, you need to assess the required corpus based on the expected rate of return and withdrawal frequency. A diversified portfolio across multiple asset classes can enhance income stability.

Recommendations for Investment Allocation

Equity and Debt Allocation: Consider allocating a portion of your investment portfolio to dividend-paying stocks, which offer regular income in the form of dividends. Additionally, fixed-income securities such as bonds and debt mutual funds can provide stable cash flows.

Real Estate Investment Trusts (REITs): While real estate is not recommended as a direct investment option, REITs offer an indirect way to invest in real estate properties and earn rental income. REITs provide diversification and liquidity benefits compared to direct property ownership.

Regular Portfolio Review: Periodically review your investment portfolio to assess its performance and make adjustments as needed. Rebalancing may be necessary to maintain the desired asset allocation and optimize income generation.

Professional Guidance: As a Certified Financial Planner (CFP), I recommend consulting with a qualified financial advisor to develop a personalized investment strategy tailored to your income goals, risk tolerance, and time horizon. A professional advisor can provide valuable insights and guidance to help you achieve financial independence through passive income generation.

Conclusion

In conclusion, generating passive income of Rs. 30,000 per month requires a diversified investment approach, leveraging strategies such as SWP, dividend investing, and exposure to fixed-income securities and REITs. By implementing a well-structured investment plan and seeking professional guidance, you can achieve your goal of financial independence and enjoy a steady stream of income.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6558 Answers  |Ask -

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

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Hi sir I'm hemanth working in postal department with 21k and doing sip of 7k in 9 Mfs from past 3 years and 1 lakh in direct stocks....can u suggest me to do something else to increase my passive income
Ans: Hi Hemanth! First, let me congratulate you on your disciplined investment approach. Investing Rs. 7,000 monthly in SIPs and holding Rs. 1 lakh in direct stocks is commendable. Let’s explore how you can increase your passive income.

Understanding Your Current Investment Portfolio
You’re currently investing Rs. 7,000 per month in 9 mutual funds and have Rs. 1 lakh in direct stocks. This is a great start and shows your commitment to building wealth. Here’s how you can optimize and diversify further.

Diversifying Mutual Funds
While investing in mutual funds, diversification is key. You’ve chosen 9 mutual funds, but it's essential to review their categories and performance regularly.

Types of Mutual Funds
Equity Funds: High risk, high return. Suitable for long-term goals.
Debt Funds: Low risk, stable returns. Ideal for short to medium-term goals.
Hybrid Funds: Mix of equity and debt. Balances risk and return.
Advantages of Mutual Funds
Professional Management: Managed by experts.
Diversification: Spreads risk across various securities.
Liquidity: Easy to buy and sell.
Evaluating Direct Stocks
You have Rs. 1 lakh in direct stocks. It’s crucial to regularly review and assess their performance.

Benefits of Direct Stocks
Potential for High Returns: Direct ownership of company shares.
Control: You decide when to buy or sell.
Risks of Direct Stocks
Market Volatility: Prices can fluctuate widely.
Need for Research: Requires constant monitoring and analysis.
Exploring Other Investment Options
To increase your passive income, consider diversifying into other investment avenues. Here are some options:

1. Systematic Investment Plan (SIP)
Continue with your SIPs but ensure they are well-diversified. SIPs offer the benefit of rupee cost averaging, reducing the impact of market volatility.

2. Fixed Deposits (FDs)
FDs are a safe investment option offering fixed returns. Though the returns are lower compared to equities, they provide stability.

3. Public Provident Fund (PPF)
PPF is a long-term, government-backed investment. It offers tax benefits and a decent return, making it a safe and attractive option.

Generating Passive Income
Passive income streams can provide financial stability and additional income. Here are some ideas:

1. Systematic Withdrawal Plan (SWP)
SWP allows you to withdraw a fixed amount from your mutual fund investments at regular intervals. This can provide a steady income stream while your remaining investment continues to grow.

Benefits of SWP
Regular Income: Provides a predictable cash flow.
Capital Preservation: Only part of your investment is withdrawn, leaving the rest to grow.
Tax Efficiency: Only the gains portion is taxed, which can be more tax-efficient than regular income.
Power of SWP
SWP harnesses the power of compounding and market growth. By withdrawing only a portion, your principal amount continues to earn returns. This can provide a sustainable income stream over a long period.

Importance of Financial Planning
A solid financial plan is crucial for achieving your financial goals. Here’s how to go about it:

1. Set Clear Goals
Define your financial goals, both short-term and long-term. This helps in creating a focused investment strategy.

2. Budgeting
Create a monthly budget to track your income and expenses. This ensures you have enough savings to invest.

3. Emergency Fund
Maintain an emergency fund to cover 6-12 months of expenses. This provides financial security in case of unforeseen events.

Power of Compounding
The power of compounding is a critical aspect of wealth creation. It allows your investments to grow exponentially over time.

Example of Compounding
Investing Rs. 10,000 monthly at an average annual return of 12% for 20 years can significantly grow your wealth due to compounding.

Regular Review and Rebalancing
Regularly review your investment portfolio. Rebalance it annually to maintain the desired asset allocation and achieve optimal returns.

Benefits of Actively Managed Funds
Actively managed funds are controlled by fund managers who make strategic decisions. Here’s why they are beneficial:

Flexibility: Managers can adapt to market changes.
Potential for Higher Returns: Can outperform the market.
Risk Management: Fund managers can mitigate risks.
Disadvantages of Index Funds
Index funds mimic the performance of a market index. Here are some disadvantages:

Lack of Flexibility: Cannot adapt to market changes.
Market Risk: Exposed to the entire market’s ups and downs.
Lower Returns: May not outperform actively managed funds.
Disadvantages of Direct Funds
Direct funds have no intermediary, so you save on commission. However, there are drawbacks:

Lack of Guidance: No professional advice.
Time-Consuming: Requires constant monitoring.
Higher Risk: Without expert advice, the risk of poor decisions increases.
Benefits of Regular Funds through CFP
Investing through a Certified Financial Planner (CFP) offers several benefits:

Professional Advice: Expert guidance on fund selection.
Regular Monitoring: Continuous review and adjustments.
Tailored Portfolio: Customized investment strategy based on your goals.
Tax Planning
Effective tax planning enhances your savings and investment returns.

1. Utilize Section 80C
Maximize your deductions under Section 80C through investments in PPF, ELSS, and other eligible instruments.

2. Leverage Section 80CCD
NPS contributions offer additional tax benefits under Section 80CCD.

3. Health Insurance
Premiums paid for health insurance provide deductions under Section 80D.

Estate Planning
Estate planning ensures your assets are distributed as per your wishes.

1. Will
Draft a will to specify asset distribution. This prevents legal complications and ensures your wishes are honored.

2. Nominees
Appoint nominees for your bank accounts, insurance policies, and investments. This simplifies the transfer of assets in case of your absence.

Final Insights
You’re doing a fantastic job with your investments. To increase your passive income, consider diversifying further and exploring new investment avenues. Regularly review and rebalance your portfolio, and consult a Certified Financial Planner (CFP) for personalized advice.

Stay disciplined and focused on your financial goals. Small, consistent efforts can lead to significant financial growth over time.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6558 Answers  |Ask -

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

Asked by Anonymous - Jul 31, 2024Hindi
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Sir, I am 45, single .Monthly salary 33k. 5000k monthly SIP in Mutual fund is going on from 2 years ago. 5L lumpsum invested in mutual fund 2 months ago. FD 10 L . I'd like to get 50k per month from passive income. Please advise.
Ans: Current Financial Situation
Age: 45
Single
Monthly salary: Rs. 33,000
Monthly SIP: Rs. 5,000 in Mutual Funds (started 2 years ago)
Lumpsum investment: Rs. 5 lakh in Mutual Funds (invested 2 months ago)
Fixed Deposit: Rs. 10 lakh
You aim to get Rs. 50,000 per month from passive income. This requires a strategic approach.

Income from Mutual Funds
Benefits of Actively Managed Funds
Professional management
Potential for higher returns
Diversification
SIP Continuation
Keep your Rs. 5,000 SIP ongoing.
Gradual and disciplined investment
Helps in rupee cost averaging
Additional SIPs
Increase your SIP amount if possible.
Channel more of your savings into SIPs.
Lumpsum Investment
Invest in actively managed funds.
Regular monitoring by fund managers
Fixed Deposits (FD)
Current FD Investment
Rs. 10 lakh in FD
Provides safety but low returns
Recommendations
Reallocate some FD funds to debt mutual funds.
Debt mutual funds offer better returns than FDs.
Maintain a balance between safety and returns.
Generating Passive Income
Dividend Paying Mutual Funds
Invest in funds that pay regular dividends.
Choose funds with a good track record.
Systematic Withdrawal Plan (SWP)
Opt for SWP from your mutual fund investments.
Regular monthly income
More tax-efficient than FD interest
Hybrid Mutual Funds
Invest in hybrid funds (balanced funds).
Combination of equity and debt
Potential for steady returns
Conservative Debt Funds
Invest part of your funds in conservative debt funds.
Lower risk compared to equity
Steady income
Portfolio Diversification
Equity Funds
Continue investing in equity funds for growth.
Diversified portfolio to reduce risk
Debt Funds
Allocate more to debt funds for stability.
Balance between equity and debt
Rebalancing
Regularly rebalance your portfolio.
Ensure the right mix of equity and debt
Financial Planning Tips
Emergency Fund
Keep an emergency fund.
At least 6 months of expenses
Use liquid funds or savings account
Retirement Planning
Plan for retirement early.
Invest in long-term instruments
Start PPF or NPS for retirement corpus
Health Insurance
Ensure adequate health insurance.
Cover medical emergencies
Avoid dipping into savings
Additional Considerations
Professional Advice
Consult a Certified Financial Planner.
Tailored advice for your situation
Regular reviews and updates
Avoid Direct Funds
Direct funds require more involvement.
Regular funds offer professional advice
Easier to manage with a Certified Financial Planner
Avoid Index Funds
Index funds track the market.
Lower potential for high returns
Actively managed funds have better prospects
Final Insights
Passive Income Goal
Achieving Rs. 50,000 monthly requires a well-planned approach.
Diversify your investments.
Balance between growth and stability
Long-Term Focus
Focus on long-term goals.
Regular monitoring and rebalancing
Consult a Certified Financial Planner
Continued Learning
Stay updated with market trends.
Regularly review your financial plan
Adjust as needed
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Hi, I am not yet mairred. I used to like a man and after a month we decided to get married. He was of my caste so I thought my parents won't deny this mairrage. I used to talk to and wanted to let him know everything about my past so that we can built a strong root of our relationship. I spoke every detail of my past life to him. Then before he proposed me for mairrage I went for a vacation with my male friend to dehradun. I didn't tell him that day as he didn't proposed me till that day then why would I tell everything about me to anyone. He was noone to me at that time. After that he came to visit me in Delhi and on the same when he was on train a friend of mine along with his fiance came to meet me after a very long time. I asked him and he didn't denied. After returning home he blocked me. I cried and cried, called multiple times but he didn't received my call. Even I went to his location and waited for almost 3 hr but he didn't came. Then I asked my sister to call him. Then he talked to me but he said me so much of harsh and vulgar words that I went in shock. I cried a lot but he went on humiliating me. But somehow I convinced him to stay with me. I never talked to that friend ever. Then I told my parents about him that I want to get married with this men. Being a girl's father my father enquired about him by being annonymous. And trust me noone has said anything good about him. Later on we get to know that his father has a murder case on him of his brother in law. But then I wanted to get married. Finally my parents agreed only for my happines. Meanwhile I was never being respected by him. He always doubt me, humiliate me, abuse me mentally and physically, and when I was like I don't want to be with you he used to say sorry and begged me to be with him. He even used to restrict to visit my uncle aunty. His mother wants used to defend him and never used to make him realise that he was wrong. Then before engagement we went to Kolkata to buy dress. Yes one more thing I have informed him on the very first day that I used to drink and smoke occassionally. So whenever he used to visit me he always wanted to drink with me whether I want it or not. He always used to abuse me and humiliate me in front of everyone after drinking, so after a period of time I used to avoid drinking. Then he used to fight with me for that also that why will you not drink. In kolkata the same thing happen. We stayed there for 3 days and he was convincing to go to club from the very first day but I refused. On 3rd he hit me. After engagement his family asked for dowry. After a lot of dealing my parents agreed for an amount. But I felt betrayed. I stopped talking. After after when I initiated the conversation he picked up a fight and said he won't marry. I tried to convince. But when everyone was blaming me then I broke my silence and said everything about him to my parent. But he manipulated everything and made me villain. My parents want me to get married as the society will insult our parents. I am getting married in November only for my parents but I have already made up my mind that I'll divorce him after 1 year of mairrage and will live my life alone. Am I thinking right? What should I do?
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No, you are not thinking right at all...This man is all RED FLAGS...
Are you actually thinking of spending one year with a person who physically abuses you? Seriously?
And then you expect him to agree to that divorce without any fuss? What world are you in? No compromises on your life please...
Be wise and protect yourself...

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

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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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