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Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 02, 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
Vivek Question by Vivek on Mar 19, 2024Hindi
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Hi, my age is 29. Married. My daughter is 8 months old. My monthly salary is Rs. 1.33L PM. Monthly expense - Rs. 35,000 Current commitments are: Home Loan EMI - Rs. 43,535 (8 months completed. 30 years tenure) Term Insurance - 1cr (Annual premium - Rs. 36,000 for 10 years. 7 more premium pending) Current NPS Balance - Rs. 75,000. Investing Rs. 15,000 pm SSY - Rs. 12,500 pm. APY - Rs. 409 pm I'm planning to save for Emergency Corpus Fund, get a medical insurance floater policy. My short term goal is to save Rs. 20 lakhs within 4 years for registeration and interior work for house. My long term goals are for daughters UG education, wedding, retirement at 55 years. I took investment risk test and Im an aggressive investor and planning to invest more on equity. Also, I want to diversify the portfolio and invest across asset class.

Ans: It's great to see your proactive approach to financial planning! With your solid income and clear goals, here's a suggested plan:

Emergency Corpus Fund: Aim for 6-12 months' worth of living expenses in a high-yield savings account for emergencies.
Medical Insurance Floater Policy: Ensure adequate coverage for your family's healthcare needs, including your daughter.
Short-Term Goal - House Expenses: Consider a mix of equity and debt mutual funds for potential growth while safeguarding against market volatility.
Long-Term Goals - Daughter's Education, Wedding, Retirement: Continue investing in equity through mutual funds or stocks for higher returns over the long term. Also, explore options like PPF, NPS, and diversified funds for diversification across asset classes.
Review and Adjust: Regularly review your portfolio's performance and make adjustments as needed to stay on track with your goals.
Remember, financial planning is dynamic. Consulting a Certified Financial Planner can provide personalized guidance tailored to your unique circumstances and aspirations. With discipline and strategic investing, you'll be well-positioned to achieve your financial dreams.
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  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2024

Asked by Anonymous - Oct 31, 2023Hindi
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Hi, My age is 28. Married. My daughter is 4 months old. My monthly salary is Rs. 1.22L PM. Monthly expense - Rs. 35,000 Current commitments are: Home Loan EMI - Rs. 36,011 (4 months completed. 30 years tenure) Term Insurance - 1cr (Annual premium - Rs. 36,000 for 10 years. 7 more premium pending) Current NPS Balance - Rs. 75,000. Investing Rs. 15,000 pm SSY - Rs. 12,500 pm. APY - Rs. 409 pm I'm planning to save for Emergency Corpus Fund, get a medical insurance floater policy. My short term goal is to save Rs. 20 lakhs within 4 years for registeration and interior work for house. My long term goals are for daughters UG education, wedding, retirement at 55 years. I took investment risk test and Im an aggressive investor and planning to invest more on equity. Also, I want to diversify the portfolio and invest across asset class.
Ans: It sounds like you've got a clear vision for your financial future, which is fantastic, especially at your age. With your goals in mind and being an aggressive investor, here's a potential strategy to consider:

Emergency Corpus Fund: Aim for at least 6-12 months' worth of expenses. Start with setting aside a portion of your savings each month until you reach this target.
Medical Insurance: A comprehensive floater policy covering your family is essential. Ensure the coverage amount is adequate to handle potential medical emergencies without denting your savings.
Short-term Goals - House: For the Rs. 20 lakhs target in 4 years, consider equity mutual funds with a mix of mid-cap and large-cap funds. You could also consider debt funds or fixed deposits for stability.
Long-term Goals:
Daughter's UG Education: Equity mutual funds can be a great option, given your aggressive risk profile. Start with diversified equity funds and gradually shift to balanced or hybrid funds as the goal approaches.
Daughter's Wedding: Again, equity mutual funds can be beneficial here. Also, considering gold ETFs or sovereign gold bonds can be a good diversification strategy.
Retirement: NPS is a good start, given its tax benefits and long-term nature. You might want to increase your contributions over time. Additionally, diversify with equity mutual funds and other retirement-oriented funds.
Diversification Across Asset Classes:
Equity: You're already inclined towards equity, so continue investing in diversified equity funds, large-cap, mid-cap, and maybe even some small-cap funds.
Debt: Given your aggressive stance, limit this to around 20-30% of your portfolio. Short to medium-term debt funds or fixed deposits can be considered.
Gold: Gold ETFs or sovereign gold bonds can be a good hedge against market volatility.
Real Estate: Since you're planning for a house, that's a good start. Real estate can be an excellent long-term investment, but ensure it doesn't over-concentrate your portfolio.
Regular Review: As your life progresses, your financial goals and risk appetite may evolve. Regularly reviewing and adjusting your portfolio ensures you stay on track.
Remember, while being aggressive can offer higher returns, it also comes with increased volatility. It's crucial to stay invested for the long term and avoid reacting to short-term market fluctuations. Consulting with a financial advisor can help tailor this strategy further to your needs and provide ongoing guidance.

..Read more

Moneywize

Moneywize   |174 Answers  |Ask -

Financial Planner - Answered on Jan 27, 2024

Asked by Anonymous - Jan 26, 2024Hindi
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Hi, My age is 38. Married. My daughter is 4 years old. My monthly salary is Rs. 1.02 lakh . Monthly expense - Rs. 30,000 and Current commitments are: Home Loan EMI - Rs. 32,011 (4 months completed. 20 years tenure) Term Insurance - 75 lakh (Annual premium - Rs. 32,000 for 10 years. 7 more premium pending) Current NPS Balance - Rs. 100,000. Investing Rs. 25,000 pm SSY - Rs. 15,000 pm. APY - Rs. 509 pm I'm planning to save for emergency corpus fund, get a medical insurance floater policy. My short term goal is to save Rs. 15 lakh within 5 years for registeration and interior work for house. My long term goals are for daughter's graduation, post-graduation and wedding, retirement at 58 years. I took investment risk as I am an aggressive investor and planning to invest more in stocks. Also, I want to diversify the portfolio and invest across asset class. What would you suggest?
Ans: It's great that you have a clear understanding of your financial goals and have started making investments. Here are some suggestions to align your investment strategy with your goals:

Emergency Corpus Fund:

• Aim for at least 3-6 months' worth of living expenses as an emergency corpus. Given your monthly expenses are Rs. 30,000, target an emergency fund of Rs. 90,000 to Rs. 1,80,000.
• Consider keeping this fund in a liquid or easily accessible instrument like a savings account or a short-term fixed deposit.

Medical Insurance:

• Get a comprehensive family floater health insurance policy. Ensure that the coverage is adequate to handle medical expenses for you, your spouse, and your daughter. The coverage should include hospitalisation expenses, critical illness coverage, and other relevant features.
• Review your policy periodically to make sure it remains adequate for your family's needs.

Short-Term Goal (Rs. 15 lakh in 5 years):

• Consider a mix of equity and debt instruments to achieve this goal. Since it's a short-term goal, a balanced approach is advisable. You may allocate a portion to equity mutual funds and the rest to fixed-income instruments like debt mutual funds, recurring deposits, or short-term bonds.
• Regularly monitor the progress towards your short-term goal and make adjustments as needed.

Long-Term Goals (Daughter's education, marriage, retirement):

• Since you have a long investment horizon for your daughter's education, marriage, and your retirement, you can afford to take more risk. Continue investing in equity-oriented instruments for these goals.
• Diversify across asset classes such as equity mutual funds, Public Provident Fund (PPF), Employee Provident Fund (EPF), and other suitable investment options.
• Gradually increase your equity exposure and consider allocating a portion to international funds for additional diversification.

Diversification and Asset Allocation:

• Ensure your portfolio is well-diversified across different asset classes (equity, debt, gold) to manage risk effectively.
• Periodically rebalance your portfolio to maintain the desired asset allocation based on your risk tolerance and financial goals.
• Keep an eye on the performance of individual investments and make adjustments if needed.

Regular Review and Monitoring:

• Regularly review your portfolio's performance and make adjustments based on changes in your goals, risk tolerance, and market conditions.
• Reassess your insurance needs periodically to make sure your coverage aligns with your family's requirements.
• As your income increases, consider increasing your monthly investments to align with your financial goals.

Remember, it's crucial to consult with a financial advisor to tailor a plan that suits your specific needs and risk tolerance. Adjust your strategy as life circumstances change, and stay disciplined in your long-term investment approach.

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

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Hello sir, Myself Prakash, age 31. I am a salaried person (married) working in private sector and my in hand salary is 50k. I have joint bank loan of 33L for 20 years for our house jointly by three of us (brothers) in which I am paying 9-9.5k per month (4 yrs already passed). My monthly expenses are approx 35k. I have a Emergency Corpus of 1.5L. I have a term insurance policy of 1 cr with a premium of 1.7k to be paid till 2032. I have health insurance also for my family with premium of 1.5k We also have covered our parents in separate health policy of premium 40-42k per year split equally between three of us. Pls suggest investment for my below mentioned goals. A. Short term goal 1. Small Car after 6 yrs of approx 7-8L 2. Own house after 15 years of approx 35-40L B. Long term goal 1. Child education fund after 17 yrs of 15L 2. Child marriage fund after 24 yrs of 25 L 3. Retirement fund after 24 yrs which would give me monthly 50k. Pls advise.
Ans: Dear Prakash,

It's great to see your proactive approach towards financial planning, especially with such diverse goals. Let's outline a comprehensive investment strategy to help you achieve your short and long-term objectives.

Your dedication to securing your family's future through meticulous financial planning is truly commendable and sets a strong example for responsible wealth management.

Short-Term Goals
Small Car Purchase (6 Years):
Savings Approach:
Allocate a portion of your monthly savings towards a dedicated fund for the small car purchase. Aim to save at least 7-8 lakhs over the next 6 years.
Own House (15 Years):
Investment Strategy:
Consider long-term investment options such as mutual funds or Public Provident Fund (PPF) to accumulate the required down payment for your future house. Aim for a corpus of 35-40 lakhs in 15 years.
Long-Term Goals
Child Education Fund (17 Years):
Systematic Investment Plan (SIP):
Start a SIP in equity mutual funds or balanced funds to build a corpus of 15 lakhs for your child's education over the next 17 years. Opt for a diversified portfolio to manage risk.
Child Marriage Fund (24 Years):
Strategic Investing:
Begin investing in equity-oriented instruments or a combination of equity and debt to accumulate 25 lakhs for your child's marriage expenses over 24 years. Review and adjust your investment portfolio periodically.
Retirement Fund (24 Years):
Retirement Planning:
To generate a monthly income of 50,000 post-retirement, focus on building a substantial retirement corpus through a mix of equity, debt, and other income-generating assets.
Diversified Portfolio:
Invest systematically in retirement-oriented mutual funds, National Pension System (NPS), and other retirement-focused investment avenues. Ensure a balanced allocation to minimize risk and maximize returns.
Risk Management and Insurance
Term Insurance:

Your existing term insurance coverage of 1 crore provides essential financial protection for your family. Continue paying premiums regularly to maintain coverage.
Health Insurance:

Maintain your health insurance coverage for your family and parents to safeguard against unforeseen medical expenses. Consider reviewing your policy periodically to ensure adequate coverage.
Conclusion
By adopting a disciplined approach to saving and investing, you can effectively achieve your short and long-term financial goals. Remember to periodically reassess your financial plan and make necessary adjustments to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 02, 2024

Asked by Anonymous - Jun 23, 2024Hindi
Money
Im 33 yers old earning 1.9L per month I have 5L in MF 3.5L in PPF 2L in NPS n 4L in stock market making a sip of 20k in MF ,PPF10k, NPS 5k ,gold 12k every month and having a home loan of 60L paying EMI currently 60K. Please help me are my investment planning is good where I should investment my goal to achieve good corpus for my daughter education and marriage now she is 5 months old.
Ans: First, congratulations on being proactive about your financial planning at a young age. At 33, you have a stable income of Rs. 1.9 lakhs per month and a diversified portfolio. Your investments include Rs. 5 lakhs in mutual funds, Rs. 3.5 lakhs in PPF, Rs. 2 lakhs in NPS, and Rs. 4 lakhs in the stock market. You are also making a SIP of Rs. 20,000 in mutual funds, Rs. 10,000 in PPF, Rs. 5,000 in NPS, and Rs. 12,000 in gold every month. Additionally, you have a home loan of Rs. 60 lakhs with an EMI of Rs. 60,000.

Evaluating Your Investment Strategy
Your investment strategy shows a balanced approach with exposure to various asset classes. However, let's analyze and optimize your investments to ensure you achieve your goals for your daughter's education and marriage.

Diversifying Your Portfolio
Mutual Funds
Mutual funds are a great way to grow your wealth. You have Rs. 5 lakhs invested in mutual funds and are contributing Rs. 20,000 monthly through SIPs. Ensure you are investing in a mix of equity and debt funds to balance risk and returns. Equity funds can provide high growth over the long term, while debt funds offer stability.

Public Provident Fund (PPF)
PPF is a safe investment with tax benefits and guaranteed returns. Your Rs. 3.5 lakhs investment in PPF is good for long-term goals due to its 15-year lock-in period. Your monthly contribution of Rs. 10,000 is also beneficial.

National Pension System (NPS)
NPS is a good option for retirement planning with tax benefits. Your Rs. 2 lakhs investment in NPS and Rs. 5,000 monthly contribution are helping you build a retirement corpus.

Stock Market
Direct stock investments can provide high returns but come with higher risk. Your Rs. 4 lakhs investment in the stock market adds an aggressive growth component to your portfolio. Regularly review and manage your stock investments to mitigate risks.

Gold
Gold is a good hedge against inflation and market volatility. Your monthly investment of Rs. 12,000 in gold is a prudent strategy for diversification.

Managing Your Home Loan
Your Rs. 60 lakhs home loan with an EMI of Rs. 60,000 is a significant commitment. Ensure you maintain an emergency fund to cover at least 6-12 months of EMIs to safeguard against financial uncertainties.

Optimizing Your Investments for Your Goals
Goal 1: Daughter’s Education
Assuming your daughter will need funds for higher education in 18 years, you should focus on long-term growth investments.

Increase SIP in Equity Mutual Funds: Equity mutual funds can offer high returns over the long term. Consider increasing your SIP contributions in equity funds to build a substantial corpus for her education.

Child Education Plan: Consider investing in child-specific mutual fund schemes designed to meet education expenses. These funds often come with a lock-in period, ensuring the money is saved for the intended purpose.

Goal 2: Daughter’s Marriage
Assuming your daughter’s marriage in 25-30 years, you need to plan for a significant corpus.

Balanced Mutual Funds: Invest in balanced or hybrid mutual funds which provide a mix of equity and debt exposure. They offer growth with stability and are suitable for long-term goals.

Systematic Investment Plan (SIP): Continue with your SIPs in mutual funds and consider increasing the amount gradually as your income grows. This disciplined approach will help in accumulating the required funds.

Advantages of Mutual Funds
Professional Management

Mutual funds are managed by professional fund managers who have the expertise to make investment decisions.

Diversification

Mutual funds invest in a diverse range of securities, which helps spread risk and reduce volatility.

Liquidity

Mutual funds offer high liquidity, allowing you to redeem units as per your financial needs.

Tax Efficiency

Certain mutual funds provide tax benefits under Section 80C, which can help in tax planning.

Power of Compounding

The returns from mutual funds, when reinvested, can grow exponentially over time, helping in wealth accumulation.

Disadvantages of Real Estate as an Investment
Illiquidity

Real estate investments are not easily converted to cash, making them less liquid than other investments.

Entry and Exit Costs

Buying and selling real estate involves significant costs, including stamp duty, registration fees, and brokerage.

No Partial Withdrawals

Unlike mutual funds, you cannot partially withdraw from a real estate investment. It is an all-or-nothing situation.

White Transactions

Real estate transactions often involve a mix of white and black money, complicating the process and reducing transparency.

Risk Management
Diversification

Diversify your investments across various asset classes to reduce risk. Avoid concentrating too much in one area.

Regular Review

Periodically review your portfolio to ensure it aligns with your goals. Adjust your investments based on performance and market conditions.

Emergency Fund

Maintain an emergency fund to cover at least 6-12 months of expenses. This fund should be easily accessible and invested in safe, liquid instruments.

Insurance

Ensure you have adequate life and health insurance to protect your family against unforeseen events.

Power of Compounding
The power of compounding is a key factor in growing your wealth. By reinvesting the returns from your investments, you earn returns on both the initial principal and the accumulated returns. This exponential growth can significantly enhance your corpus over time.

Seeking Professional Guidance
While you have a solid understanding of investments, consulting a Certified Financial Planner (CFP) can provide you with personalized advice and strategies. A CFP can help you navigate complex financial decisions and ensure your investments are aligned with your goals.

Final Insights
You have made commendable progress in your financial journey at 33 years old. Your diversified investments and disciplined approach are commendable. Here’s a summary of the key steps to enhance your financial plan:

Increase SIPs in Equity Mutual Funds: Boost your contributions to equity mutual funds to build a substantial corpus for your daughter's education and marriage.
Maintain Diversification: Continue diversifying across mutual funds, PPF, NPS, gold, and stocks to balance risk and returns.
Review and Adjust: Regularly review your portfolio and make adjustments as needed to stay on track with your goals.
Consult a CFP: Seek guidance from a Certified Financial Planner to refine your investment strategy and achieve your financial objectives.
Your commitment to financial planning and investing for your daughter's future is admirable. With a well-structured plan and disciplined execution, you can achieve your goals and secure a bright future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
T S Khurana

T S Khurana   |197 Answers  |Ask -

Tax Expert - Answered on Nov 23, 2024

Asked by Anonymous - May 11, 2024Hindi
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Can you please suggest on capital gains as per Indian taxation laws arising in the below two queries : 1) property purchased with joint ownership, me and my wife’s name in 2015 at a cost of 64,80,000, housing improvements done for the cost of 1000000 and brokerages of 200000 paid and sold the same property at 10000000 in Dec 2023? 2) 87% of the proceeds got from the deal i.e 8700000, have been reinvested to pay 25% amount in purchasing another joint ownership property in Dec 2023, 3) I have invested in another under construction property in Nov 2023 by taking housing loan, which is on me and my wife’s name worth 1.4 cr, here the primary applicant is me only while wife is just made a Co applicant in the builder buyer agreement and also on the housing loan . So what are the LTCG tax liabilities arising from the above 3 scenarios for FY 2023-2024 and FY 2024-2025. I intend to sale off the property acquired in (2) by Dec 2024 and use that proceeds to close the housing loan for the property acquired in (3), will this sale of property be inviting any tax liabilities if the complete proceeds received from the sale of the property in (2) would be utilised to close the housing loan taken in Nov 2023 for the property in (3) ? Since in FY 23-24, I would be claiming the LTCG from the sale proceeds of 1) invested in the purchase of property in 2), and I intend to sale off this property in Dec 2024, will the LTCG claim be forfeited on the property sale in (1), should I hold this property at least for further 1 year so that sale of this property in 2) will not invite STCG?
Ans: (A). Let's first talk about F/Y 2023-24 :
You jointly sold a Property during the year for Rs.76.80 lakhs (64.80+10.00+2.00), & sold the same for Rs.100.00 lakhs.
You have jointly also purchased Property No.3 (I suppose it is Residential only), for Rs.140.00 lakhs.
You should avail exemption u/s-54 & file your ITR accordingly. Please disclose all details about sale & purchase in your ITR.
02. Now coming to the F/Y 2024-25 :
You intend to Sell Property No.2, which was acquired in 2023-24. Any Gain on Sale of it would be Short Term capital Gains & taxed accordingly.
Alternatively, you may hold this sale of property no.2 (for 2 years from its purchase) & avoid STCG
You are free to utilize the sale proceeds in a way you like, including paying off your housing Loan.
Please note to avail exemption u/s 54 only from investment in property no.3 & not 2.
Most welcome for any further clarifications. Thanks.

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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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