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Ramalingam

Ramalingam Kalirajan  |6992 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 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 08, 2024Hindi
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Hi, i have 70 Lakhs corpus fund in my account. Im investing 10k every month in quant small cap and nippon small cap fund in each. Where can I invest 70lakhs so tht i get 35k per month for my monthly expenses.

Ans: With a corpus of 70 lakhs and the objective of generating 35k per month for expenses, let's devise a sustainable income-generating strategy while ensuring prudent wealth management.

Income Generation Strategy
Dividend Yield Funds: Consider allocating a portion of your corpus to dividend yield funds, which invest in stocks that pay regular dividends. These funds can provide a steady stream of income while offering the potential for capital appreciation.

Debt Funds: Invest a portion of your corpus in debt funds, which primarily invest in fixed-income securities like bonds and government securities. Debt funds offer stable returns with lower volatility, making them suitable for income generation.

Systematic Withdrawal Plan (SWP): Implement SWP in equity and hybrid funds to systematically withdraw a fixed amount each month. This allows you to benefit from potential capital appreciation while receiving regular income.

Portfolio Allocation
Equity and Debt Allocation: Strike a balance between equity and debt investments to manage risk while aiming for sustainable income. Consider allocating around 30-40% of your corpus to equity funds and the remaining to debt funds.

Diversification: Diversify your portfolio across various asset classes and fund categories to mitigate risk and enhance stability. Opt for a mix of large-cap, mid-cap, and multi-cap equity funds along with diversified debt funds.

Professional Guidance
Consult a Certified Financial Planner to tailor an investment strategy aligned with your financial goals, risk tolerance, and income requirements. They can help you optimize your portfolio for income generation while ensuring long-term wealth preservation.

Regular Review
Periodically review your investment portfolio and adjust your strategy as needed based on changes in market conditions, financial goals, and income requirements. Regular monitoring ensures that your portfolio remains on track to meet your financial objectives.

Conclusion
By adopting a balanced approach to asset allocation and leveraging various investment avenues, you can effectively generate a monthly income of 35k from your corpus fund while safeguarding its long-term growth potential. Seeking professional guidance and regularly reviewing your portfolio are key to achieving financial security and stability.

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  |6992 Answers  |Ask -

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

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Hi sir , I would like to invest 6000 per month and iam 38 years old and by retirement u would like to get corpus fund of 2 crore, sir can you suggest me where to invest and reach my goal
Ans: It's great that you're planning for your retirement at 38. Let's explore your investment options to reach your goal of a 2 crore corpus:

• Start with SIPs: Since you're looking to invest 6000 per month, Systematic Investment Plans (SIPs) in mutual funds are a smart choice. SIPs offer the benefit of rupee cost averaging and can help you build wealth over time.

• Asset Allocation: Given your age and long-term investment horizon, consider a diversified portfolio comprising equity and debt funds. Equity funds offer growth potential, while debt funds provide stability.

• Equity Mutual Funds: Allocate a significant portion of your SIPs to equity mutual funds. These funds invest in stocks and have the potential to generate higher returns over the long term. Look for funds that have a track record of consistent performance and align with your risk tolerance.

• Debt Mutual Funds: To balance risk, consider allocating a portion of your SIPs to debt mutual funds. These funds invest in fixed-income securities like bonds and offer relatively stable returns. They can provide a cushion during market downturns.

• Review and Adjust: Regularly review your investment portfolio and make adjustments as needed. As you approach retirement, consider gradually shifting your allocation from equity to debt to reduce volatility and preserve capital.

• Consider Tax-saving Funds: If you haven't already, explore Equity Linked Savings Schemes (ELSS), also known as tax-saving funds. These funds offer tax benefits under Section 80C of the Income Tax Act while providing exposure to equity markets.

• Consult a Certified Financial Planner: Seeking advice from a Certified Financial Planner can provide valuable insights into structuring your investment portfolio and achieving your retirement goals. They can assess your risk profile, investment horizon, and financial objectives to tailor a plan that suits your needs.

• Stay Disciplined: Consistency is key to long-term investing success. Stick to your SIPs even during market fluctuations and avoid making impulsive decisions based on short-term market movements.

• Monitor Progress: Keep track of your investment performance and periodically reassess your progress towards your retirement goal. Adjust your strategy as necessary to stay on track and maximize returns.

By following these steps and staying committed to your investment plan, you can work towards achieving your retirement goal of a 2 crore corpus. Remember, investing is a journey, and patience and discipline are essential for success.

..Read more

Ramalingam

Ramalingam Kalirajan  |6992 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 20, 2024

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right now I am 52 year old & retire within 6years, I ready to invest Rs.1lkh per month & corpus has to be want after my retirement Rs.3cr.is it possible! if Yes then tell me where I should I invest in MF/shares/PPF/FD/NPS/
Ans: At 52, with six years until retirement, your goal of accumulating a Rs. 3 crore corpus is ambitious but achievable. With a disciplined investment of Rs. 1 lakh per month, you can work towards this target. The key is choosing the right investment vehicle to maximise your returns while managing risks.

Why Mutual Funds Are Ideal for Your Goal

Among the available options—Mutual Funds, Shares, PPF, FD, and NPS—mutual funds stand out as the best choice for your goal. Here’s why:

Potential for High Returns: Mutual funds, especially equity mutual funds, have historically provided returns that outpace inflation and other investment options like PPF, FD, or even NPS. Over a six-year period, equity mutual funds could deliver an average annual return of 10-12%, which is crucial for reaching your Rs. 3 crore target.

Flexibility and Diversification: Mutual funds offer a diversified portfolio across sectors and companies, reducing the risk associated with investing in individual stocks. This diversification is important, especially as you approach retirement, to ensure your investment is protected from market volatility.

Systematic Investment Approach: With mutual funds, you can benefit from a systematic investment plan (SIP) or a lump-sum investment strategy. In your case, investing Rs. 1 lakh per month through SIPs ensures rupee cost averaging, which helps mitigate market timing risks.

Steps to Achieve Your Rs. 3 Crore Goal

Focus on Equity Mutual Funds:

Equity Focus: Given your six-year horizon, a significant portion of your monthly Rs. 1 lakh investment should be allocated to equity mutual funds. These funds are designed to grow your wealth over the long term, and even within six years, they can generate substantial returns.

Balanced Allocation: To manage risk as you approach retirement, consider starting with 80% in equity mutual funds and 20% in debt mutual funds. As you get closer to retirement, gradually shift a portion of your equity investments to safer debt funds. This will protect your gains while still offering growth.

Reinvest Your Returns:

Compounding Effect: Keep your returns reinvested within the mutual funds. This will enhance the power of compounding, where your returns start generating their own returns, accelerating your wealth accumulation.
Regular Monitoring:

Performance Review: Although mutual funds are managed by professionals, it’s important to review the performance of your funds regularly. This ensures that your investments are aligned with your retirement goal.

Portfolio Rebalancing: As you get closer to retirement, consider rebalancing your portfolio to reduce exposure to equities and increase allocation to debt funds. This reduces the risk of a market downturn affecting your retirement corpus.

Avoid Unnecessary Withdrawals:

Stay Invested: To achieve your Rs. 3 crore goal, it’s essential to stay invested for the full six years. Avoid unnecessary withdrawals that could derail your plan.
Why Not Other Investment Options?

Shares: Direct stock investments can be volatile and require active management. Given your limited time frame and retirement goal, the risks associated with shares might outweigh the benefits.

PPF: Public Provident Fund (PPF) is a safe investment, but it offers lower returns (around 7-8%) compared to equity mutual funds. PPF is better suited for long-term safety rather than aggressive growth.

FD: Fixed Deposits (FDs) provide guaranteed returns but are also lower (5-6% on average) compared to mutual funds. FDs are more appropriate for capital preservation rather than growth.

NPS: The National Pension Scheme (NPS) offers tax benefits and a mix of equity and debt, but its structure is more suited for long-term retirement planning rather than aggressive wealth accumulation in a short period like six years.

Final Insights

Given your retirement goal of Rs. 3 crores and a six-year timeline, investing Rs. 1 lakh per month in mutual funds, with a focus on equity, is the most effective strategy. This approach balances potential returns with risk management, offering you the best chance of achieving your desired corpus.

Avoid direct investments in shares, PPF, FD, or NPS, as these options either carry higher risks or offer lower returns. By sticking with a disciplined mutual fund investment strategy and regularly reviewing your portfolio, you can confidently work towards your retirement target.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |6992 Answers  |Ask -

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

Money
Sir please review my mutual fund sip portfolio * Axis Mid Cap Fund - Direct Growth = 1000 * ICICI Prudential BHARAT 22 FOF - Direct Plan = 1000 * Mirae Asset Emerging Bluechip Fund - Direct Plan = 1000 * Parag Parikh Flexi Cap Fund - Direct Plan = 1000 * quant Small Cap Fund - Direct Plan Growth = 1000 * SBI Small Cap Fund Direct Growth = 2000 * SBI PSU direct plan growth = 1000 My age is 27 . Looking a long term investment with higher return. Shall I continue this portfolio or any changes required? Kindly give your valuable suggestions . Thank you
Ans: Your portfolio looks well-constructed, with a strong foundation in mid-cap, small-cap, and flexi-cap funds. Each fund you've chosen reflects a strategic approach for growth. Let's evaluate each category and make any necessary suggestions to ensure you achieve the best potential returns over the long term.

Overview of Your Current Portfolio
You’ve diversified well across categories, with each fund serving a unique role. Let’s analyze the strengths and potential improvements in each area of your portfolio.

Mid-Cap Funds
Mid-cap funds, like the one in your portfolio, focus on companies with substantial growth potential but higher risk compared to large-cap companies. Over the long term, these funds often outperform due to their growth-focused nature.

However, consider monitoring this fund periodically. Mid-cap stocks can face higher volatility, which may impact returns if held solely without re-evaluation.

Small-Cap Funds
Small-cap funds are growth-oriented, targeting smaller companies with significant room for expansion. You’ve allocated well to this category, focusing on funds with robust track records.

Due to their volatile nature, however, they can experience sharp swings. A Certified Financial Planner can offer guidance to rebalance if necessary, which could enhance returns and help you avoid undue risk over the long term.

Flexi-Cap Funds
Flexi-cap funds have the flexibility to invest across large, mid, and small-cap companies, making them versatile. This allocation ensures that you have exposure to high-growth stocks while benefiting from the stability of large-cap stocks.

This type of fund aligns well with your long-term goal as it can balance risk across market cycles. Continue with this allocation for stable yet high-growth potential.

Sectoral Funds (Public Sector & PSU Funds)
Sectoral funds focused on PSUs add a thematic angle to your portfolio, providing exposure to government-linked companies. Such funds may perform well during economic growth phases or government-led initiatives but might also experience phases of underperformance.

For long-term investors like you, relying heavily on sectoral funds can add cyclical risk. A diversified equity fund may offer higher long-term growth with less risk than sector-specific investments.

Evaluation of Direct Fund Plans
Sir, investing through direct plans saves on expense ratios, which may seem beneficial at first. However, there are significant drawbacks:

Lack of Advisory Support: Direct plans don't offer professional guidance. Over time, tracking and rebalancing become crucial, and a Certified Financial Planner (CFP) with an MFD (Mutual Fund Distributor) credential ensures optimal management.

Market Cycles and Rebalancing: Without expert oversight, you could miss critical adjustments during volatile market phases, affecting returns. A CFP helps in such rebalancing for better performance.

Tax Implications and Withdrawals: Selling or withdrawing from mutual funds, especially equity funds, incurs tax. Long-term capital gains (LTCG) on equity mutual funds are taxed at 12.5% for gains above Rs 1.25 lakh, while short-term gains (STCG) incur 20%. A regular plan with an MFD provides ongoing tax-efficient strategies.

Opting for regular plans via an MFD with a CFP credential will enable you to maximize returns while accessing insights that make a difference long term.

Suggested Modifications for Higher Returns and Stability
Focus on Balanced Funds Over Sectoral Exposure

To limit risks tied to sectoral funds, consider allocating a portion to balanced or diversified funds. These funds balance equity with stable instruments like debt, reducing volatility and sustaining growth.

Revisit Small and Mid-Cap Allocations

With multiple small-cap and mid-cap funds, consider focusing on one fund in each category. Over-diversification in these can dilute returns and increase tracking requirements. A strategic reallocation could yield more focused, consistent growth.

Consider SIP Step-Up for Long-Term Compounding

An annual SIP step-up, even a small amount, could enhance long-term wealth creation significantly. This adjustment boosts your corpus over time and aligns with your long-term goal of maximizing returns.

Seek Guidance from a Certified Financial Planner

Having a CFP manage your portfolio brings personalized insight into market trends, rebalancing, and tax-efficient strategies. A CFP ensures you capitalize on growth while maintaining balance and tax efficiency.

Key Benefits of Actively Managed Funds Over Index Funds
Sir, I noticed you are not invested in index funds, which is beneficial for your growth objective. Actively managed funds outperform index funds, especially in dynamic market conditions. Here’s why:

Higher Returns Potential: Actively managed funds provide the flexibility to capitalize on changing market opportunities, which index funds lack due to their passive structure.

Adaptive Strategy: Fund managers of actively managed funds adjust to market shifts, providing growth and safety in a fluctuating market.

Downside Protection: During bear markets, actively managed funds can adjust exposure, while index funds simply follow the market downturn. Active management can minimize losses, giving a steadier performance over time.

Final Insights
Sir, you have built a promising portfolio with well-selected funds across categories. A few modifications could ensure a more balanced, growth-oriented, and tax-efficient portfolio. The following adjustments will help you achieve higher returns with sustained stability:

Consider balanced or diversified funds for steadier growth.

Limit mid-cap and small-cap fund overlaps to reduce portfolio complexity.

Use the expertise of a CFP to handle rebalancing, tax efficiency, and market cycle adaptations.

Continue focusing on actively managed funds over index funds, as these provide better long-term value.

Through these steps, you can optimize your portfolio for maximum growth and stability, setting a strong foundation for your long-term investment goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Anu

Anu Krishna  |1287 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 08, 2024

Asked by Anonymous - Nov 07, 2024Hindi
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Relationship
Hi Anu Mam Im 27 yrs old ( married) and 10 yrs old daughter. Im seperated from my husband since 2 yrs due to several reasons like he is drinking and Totally addicted to it. And he is totally dependent and now today also roaming on the roads of some streets of hyd. I belongs to an orthdox family. Now the question is one backward caste man who is married age : 33 he is interested in me and proposed me to a marriage after knowing all my past and saying that he accepts my child too. And the thing is he said a lie to me at first that he is unmarried and even though i had a good impression on him about the way he behaves with me he even treat me in a very polite manner. He says he loves me even though i too had a good impression but the things are the castes and can we both settle down with a marriage can we be happy or he is only trying to convince me to get him a wife to care care of him or only for his parents, he always talks about his own sister and also the office colleagues calls them sister and get emotional about them those who left the office. And he cries a lot which i dont trust on him and the face i see him that was not an real cry that looks like an act which i dont like in him. May he is acting ? Or really loving me, ge cares alot i feel like he is over reacting
Ans: Dear Anonymous,
If you are in doubt, then it's highly likely that he is putting on an act. Go with your intuition and hey hey, you said that he is married and so are you...You do realize that you just can't go ahead and marry while you are already to other people, right?
Focus on what's happening in your life; you obviously have to do something about it...Other relationships can wait!

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

Anu

Anu Krishna  |1287 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 08, 2024

Asked by Anonymous - Nov 06, 2024Hindi
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Relationship
Hello Ms Anu, I am a 42yr female..married since 14 yrs and have 10yr old son . I am highly qualified and financially independent. My marriage was a arranged one.. but in these 14 yrs.. I never experienced love or and attachment from my husband's side. He is a family man.. there is no other woman involved..He loves his parents and his two sisters immensely... but always treats me as a option. I feel humiliated and lonely and he has short temper when i talk about this issue... so basically I don't discuss... but that is no solution... I am suffering and unhappy. What should I do?
Ans: Dear Anonymous,
A few married men can be more focused on the women on their side of the family; it becomes easy to express love, care and attention to them as he has grown with them.
A wife happens to be someone that he is yet to understand. It requires effort to make a marriage work; your husband finds it convenient to take the easy way out and 'hang out' with his family.
So, here you take the lead and start. Start not by bringing forth your complaints as this is going to push him further to them which is going to annoy you BUT by inviting him to be with you. A lot of work, I get it...but the bottom line: that's what you want, right?
Plan dates evenings, take short vacations together, work-out together...the key is to establish a connection which never had its chance in the first place...So, give your best shot! Most times actions speak louder than words ever can...

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

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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