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Ramalingam

Ramalingam Kalirajan  |2717 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 24, 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 10, 2024Hindi
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Sir my age. Is 24 how much i need to invest mnthly in mutual fund to make corpus of 10 cr at the age of 60 years

Ans: t's commendable to start thinking about long-term financial goals at such a young age. The journey to a 10 crore corpus by the age of 60 is ambitious and requires disciplined savings and smart investments.

Consider this: the power of compounding can work wonders over time. By starting early, you're giving your investments more time to grow. But remember, the journey will have its share of ups and downs, like life itself.

Now, how much to invest monthly? It's not just about the amount but the consistency and the quality of your investments. It's about understanding your risk tolerance and adjusting your sails when the winds of the market change.

While it's tempting to chase numbers, it's equally important to enjoy the journey, to learn from each investment decision, and to adapt as you grow both in age and wisdom.

Consulting with a Certified Financial Planner can help you chart out a personalized plan aligned with your goals, helping you navigate the financial landscape with confidence and clarity. Remember, it's not just about reaching the destination but enjoying the journey along the way.
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  |2717 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Asked by Anonymous - Feb 22, 2024Hindi
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Sir., my monthly expense is 100000 now and monthly income from house rent is 40k. My age is 47., my pf as per today 50L. Share 8 L and FD 4L, SGB 12L. Maintain same lifestyle after 60., how much corpus I need and how much I should start investing. Kindly clarity
Ans: At age 47, it's commendable that you are thinking about your retirement needs. Maintaining your current lifestyle post-retirement requires careful planning. Let's analyse your current financial situation and what you need to achieve your retirement goals.

Current Financial Status
Your monthly expense is ?100,000, and your income from house rent is ?40,000.

You have accumulated significant assets:

Provident Fund (PF): ?50 Lakhs

Shares: ?8 Lakhs

Fixed Deposits (FD): ?4 Lakhs

Sovereign Gold Bonds (SGB): ?12 Lakhs

These assets show that you have diversified investments, which is excellent for balancing risk.

Estimating the Retirement Corpus
To maintain the same lifestyle after retirement, you need to consider inflation. Your expenses will likely increase over time due to inflation. Assuming a 6% annual inflation rate, your current monthly expenses of ?100,000 will be much higher when you retire at 60.

You'll need a corpus that can generate enough income to cover these expenses. Let's assume you live up to 85 years. This means your corpus should last for 25 years post-retirement.

Calculating the Required Corpus
Estimating the exact corpus involves complex calculations. A Certified Financial Planner can help with precise numbers. However, a rough estimate is that you need about 20-25 times your annual expenses at the time of retirement.

Given your current expenses, you might need a corpus of around ?6-7 crores, factoring in inflation.

Investment Strategy to Build the Corpus
You need to start investing more aggressively to reach your retirement goal. Here's a suggested strategy:

1. Increase Equity Investments

Equities typically offer higher returns compared to other asset classes. Consider increasing your investment in actively managed equity mutual funds. These funds are managed by professional fund managers who aim to outperform the market.

2. Systematic Investment Plan (SIP)

Start a SIP in mutual funds. It helps in averaging the cost of investment and provides disciplined investing. SIPs are ideal for long-term wealth creation.

3. Diversify Your Portfolio

Diversification reduces risk. You already have SGBs, FDs, and shares. Ensure a good mix of equity, debt, and gold. This balanced approach mitigates risks.

4. Consult a Certified Financial Planner

A Certified Financial Planner can help tailor a plan specific to your needs. They can provide guidance on asset allocation, risk management, and tax efficiency.

Managing Your Existing Assets
Provident Fund (PF)

Your PF is a secure and stable investment. Continue contributing to it. It provides a safety net with assured returns.

Shares and Equity

Monitor your share portfolio regularly. Avoid putting all your money in one stock. Diversify across sectors to minimize risk.

Fixed Deposits (FD)

FDs are safe but offer lower returns. Consider using them for emergency funds or short-term goals.

Sovereign Gold Bonds (SGB)

SGBs are good for diversification. They also provide a hedge against inflation. Keep them as part of your portfolio.

Regular Review and Adjustment
Regularly review your financial plan. Adjust your investments based on market conditions and your changing needs. Stay informed and adapt to new financial opportunities.

Conclusion
Planning for retirement requires a strategic approach. Your current assets provide a strong foundation. By investing wisely and consulting a Certified Financial Planner, you can achieve your retirement goals.

You have already taken the first step by evaluating your needs. With disciplined investing, you can ensure a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |2717 Answers  |Ask -

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

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Sir I am currently a student working as pg resident in government college l. My monthly stipend is 70000 of which I want to use 60000 in investment for upcoming future. I want to continue doing it for 3 years and if I get help from yours kind suggestion I will continue to do so. Humbly request you to guide me sir ?
Ans: It's admirable that you're proactive about investing your stipend for future financial security. Let's craft a strategic investment plan to help you achieve your goals.

Understanding Your Financial Goals
Short-Term Objective (3 Years):
Your primary goal is to invest your monthly stipend over the next three years to build wealth for the future.
This investment horizon allows for a balanced approach that combines growth potential with risk management.
Tailoring an Investment Strategy
Risk Profile Assessment:

As a student with a stable income, you may have a higher risk tolerance, given your long-term investment horizon.
However, it's crucial to strike a balance between risk and return to ensure the safety of your investments.
Diversified Portfolio Allocation:

Consider diversifying your investment across asset classes such as equities, debt, and possibly alternative investments like gold or commodities.
Diversification helps mitigate risk and enhances the potential for long-term growth.
Structuring Your Investment Approach
Equities:

Allocate a portion of your investment towards equities to capitalize on their potential for higher returns over the long term.
Invest in a mix of large-cap, mid-cap, and small-cap stocks or equity mutual funds to diversify your equity exposure.
Debt Instruments:

Allocate another portion of your investment towards debt instruments like fixed deposits, debt mutual funds, or bonds.
Debt instruments provide stability and regular income, making them suitable for risk mitigation.
Systematic Investment Plan (SIP):

Consider investing through a SIP in mutual funds to benefit from rupee-cost averaging and mitigate the impact of market volatility.
SIPs allow you to invest a fixed amount regularly, regardless of market fluctuations, fostering disciplined investing.
Monitoring and Review
Regular Portfolio Review:

Periodically review your investment portfolio to ensure it remains aligned with your financial goals and risk tolerance.
Make adjustments as needed based on changing market conditions or personal circumstances.
Continuous Learning:

Stay informed about financial markets and investment strategies to make informed decisions about your portfolio.
Consider seeking guidance from a Certified Financial Planner to optimize your investment strategy.
Conclusion and Encouragement
Your proactive approach towards investing is commendable and lays a strong foundation for your financial future. By implementing a diversified investment strategy and maintaining disciplined investing habits, you're well-positioned to achieve your long-term financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2717 Answers  |Ask -

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

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Iam 57 years old male. Iam going to retire after 3 yrs. I have invested 2. 5 lakhs in icici balance advantage fund . Can i contine investing or change can you advice
Ans: Evaluating Investment Strategy for Retirement
Understanding Your Current Situation
It's commendable that you're actively planning for your retirement. Let's assess your investment in ICICI Balance Advantage Fund and explore whether it aligns with your retirement goals.

Genuine Appreciation for Retirement Planning
Planning for retirement demonstrates foresight and responsibility towards securing your financial future. It's a crucial step towards achieving financial independence in your golden years.

Assessing Your Investment Choice
ICICI Balance Advantage Fund:
This fund follows a dynamic asset allocation strategy, aiming to balance risk and return by adjusting exposure to equities based on market conditions.
It offers the potential for growth while providing downside protection through tactical allocation.
Evaluating Investment Strategy for Retirement
Investment Horizon:

With retirement on the horizon in three years, your investment horizon is relatively short.
Short-term investment goals typically require a more conservative approach to minimize the impact of market volatility.
Risk Tolerance:

As you approach retirement, preserving capital becomes increasingly important.
Consider reassessing your risk tolerance and shifting towards more stable investment options to safeguard your savings.
Considering Alternatives
Debt Funds:

Debt funds offer lower volatility and can provide steady income, making them suitable for retirement portfolios.
Consider allocating a portion of your portfolio to debt funds to enhance stability and reduce overall risk.
Systematic Withdrawal Plan (SWP):

SWP allows you to systematically withdraw a fixed amount from your investments at regular intervals, providing a steady income stream during retirement.
Explore the possibility of implementing an SWP strategy to meet your income needs post-retirement.
Conclusion and Recommendation
Given your proximity to retirement, it's prudent to reassess your investment strategy and prioritize capital preservation. While ICICI Balance Advantage Fund offers growth potential, it may carry higher risk, which might not align with your current financial objectives.

Considering your retirement timeline, I recommend exploring more conservative options such as debt funds and implementing a systematic withdrawal plan to ensure a steady income stream post-retirement. Consult with a Certified Financial Planner to tailor an investment strategy that suits your retirement goals and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2717 Answers  |Ask -

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

Asked by Anonymous - May 20, 2024Hindi
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Hello sir, I'm investing in quant small cap fund(5000 pm) and Aditya Birla Sun life PSU equity(10000pm), how much corpus should I expect after 2 or 3 years.
Ans: Assessing Potential Corpus Growth in 2-3 Years
Understanding Your Investment Strategy
It's great to see your commitment to investing and building wealth for your future. Let's analyze the potential corpus growth based on your current investments.

Compliments on Your Investment Initiative
Your proactive approach to investing is commendable. With careful planning and disciplined execution, you can achieve your financial goals effectively.

Analyzing Investment Horizon and Portfolio
Investment Horizon:

You're targeting a corpus growth within 2-3 years, indicating a short to medium-term investment horizon.
Short-term goals typically require a more conservative investment approach to mitigate risk.
Investment Allocation:

Currently, you're investing in two funds: Quant Small Cap Fund and Aditya Birla Sun Life PSU Equity.
These funds cater to different segments of the market, providing diversification.
Evaluating Potential Corpus Growth
Quant Small Cap Fund:

Small-cap funds are known for their potential for high returns but also carry higher risk.
Given the short investment horizon, anticipate moderate to high fluctuations in returns.
Aditya Birla Sun Life PSU Equity:

PSU equity funds primarily invest in stocks of public sector enterprises, offering stability but moderate growth potential.
Expect relatively lower volatility compared to small-cap funds.
Factors Influencing Corpus Growth
Market Performance:

Equity markets' performance significantly impacts the growth of your investment.
Economic conditions, corporate earnings, and geopolitical factors influence market movements.
Fund Performance:

Past performance of the selected funds provides insight but doesn't guarantee future returns.
Monitor fund performance regularly to assess its alignment with your goals.
Expected Corpus Growth Range
Quant Small Cap Fund:

Considering the high-risk nature of small-cap funds, anticipate a potential growth range of 10-15% annually.
Over 2-3 years, this could translate to a cumulative growth of 20-45%.
Aditya Birla Sun Life PSU Equity:

PSU equity funds typically offer more stability with potential growth in the range of 8-12% annually.
Over 2-3 years, expect a cumulative growth of approximately 16-36%.
Conclusion and Recommendation
Given the investment horizon of 2-3 years, it's crucial to balance risk and return expectations. While small-cap funds offer higher growth potential, they also come with increased volatility. PSU equity funds, on the other hand, provide stability but moderate growth.

Considering your risk tolerance and investment objectives, a combination of both funds can provide a balanced approach to corpus growth. Regularly review your portfolio's performance and adjust your investment strategy as needed to stay on track towards your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2717 Answers  |Ask -

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

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Sir, my son is now 27 years old and would like to invest approx Rs. 10,000- 12,000 per month for the next 15-20 years and an approximate increase of 10-15% per year. Kindly suggest which type of investment should be planned in addition to any other suggestion's which would create a substantial monthly income after 20 years taking into consideration the money value and inflation
Ans: That's a fantastic plan for your son. Starting investments early creates a solid financial future. Let's explore some options to build a good monthly income after 20 years:

Building a Strong Investment Portfolio:

Diversification is key: Invest in a mix of asset classes like Equity (stocks), Debt (bonds), and Hybrid (mix of equity and debt) to manage risk and target long-term growth.
Consider Equity Mutual Funds: Actively managed Equity Mutual Funds can potentially generate good returns over the long term. They are professionally managed by experts.
Investing for Growth and Beating Inflation:

Systematic Investment Plan (SIP): Regular monthly investments (SIP) of Rs. 10,000-12,000 with a planned 10-15% annual increase is a smart approach. It inculcates discipline and leverages rupee-cost averaging.
Long-term horizon: A 20-year investment timeframe allows for market fluctuations to even out, focusing on long-term growth that outpaces inflation.
Planning for Future Income:

Goal-based investing: While aiming for monthly income, consider your son's future goals like retirement or higher studies. Tailor the investment mix accordingly.
Review and Rebalance: Regularly review the portfolio performance and rebalance allocations if needed to maintain the desired asset class mix.
Getting Professional Advice:

Talk to a CFP professional: A Certified Financial Planner can create a personalized investment plan for your son, considering his risk tolerance and financial goals.
Investment planning is crucial: A CFP can help navigate different investment options and choose the ones that best suit your son's needs.
Remember: Consistent investing, diversification, and professional guidance are key to building a strong financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2717 Answers  |Ask -

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

Asked by Anonymous - May 07, 2024Hindi
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Hi, I have a query regarding health insurance. I have 2 policies from different providers. 1 policy has copay clause. Can I claim the copay amount from the other provider?
Ans: Claiming Copay from Another Health Insurance Policy
That's a good question! Unfortunately, you cannot claim the copay amount you pay under one health insurance policy from another provider. Here's why:

Copay is a fixed amount you share with your first insurer for covered medical expenses. It reduces your premium but requires you to pay upfront.
Each insurance policy works independently. They only cover your expenses as per their terms and conditions.
Here's how things work:

You file a claim with the insurer that has the copay clause.
They approve the claim amount after deducting the copay amount.
You pay the copay directly to the hospital or yourself (depending on the policy).
Alternatives to Consider:

Choose plans without copay: If copays are causing trouble, consider switching to plans with higher premiums but no copay requirement.
Increase coverage limits: If your current plans have low coverage limits, explore options with higher limits to minimize out-of-pocket expenses.
Speak to a CFP Professional:

A Certified Financial Planner can review your health insurance plans and suggest options that better suit your needs. They can also help you understand coverage details and claim procedures.

Remember: It's important to choose health insurance plans that complement each other and provide comprehensive coverage.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2717 Answers  |Ask -

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

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Im 62 year old and retired person. I am looking for health insurance policy for me and my wife who is 52 year old and housewife. I am suffering from high BP, Cervical and Lumber spondylitis, knee osteoarthritis, IBS and taking medicines for last 10-12 years. My wife has hypothyroidism, spondylitis and diabetes Please suggest better health insurance policy. Also suggest whether individual or family policy will be better Regards
Ans: I understand you're looking for a good health insurance plan for you and your wife. That's a smart decision, especially considering your health conditions. Let's break it down to help you choose the best option:

Understanding Pre-existing Conditions:

Your existing health conditions (BP, spondylitis, etc.) are called pre-existing conditions. These might affect your policy options and premiums.
Individual vs. Family Plan:

Family plan: Covers you and your wife together under one plan. It can be cheaper, but coverage limits get shared.
Individual plans: Separate plans for each of you. More flexibility, but might cost slightly more overall.
Considering Your Needs:

Pre-existing condition coverage: Look for plans that cover pre-existing conditions after a waiting period (if any).
Hospitalization coverage: Choose a plan with sufficient coverage for hospitalization expenses.
Medicines: Check if the plan covers medicines you take regularly.
Finding the Right Plan:

Talk to a CFP professional: A Certified Financial Planner can assess your needs and recommend suitable plans from different insurers.
Compare plans online: Many insurance companies offer online plan comparisons. Look for plans that cover pre-existing conditions and have good network hospitals in your area.
Here's a quick tip: Since your wife is younger and has a different health profile, individual plans might be better. This allows you to get customized coverage based on your specific needs.

Remember: Don't hesitate to ask questions! Choosing the right health insurance is important, and a CFP professional can guide you through the process.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...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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