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38 yr old, 1.7L pm, how to achieve: House, 30L education, 2L monthly at 53?

Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 08, 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
Niranjan Question by Niranjan on Aug 02, 2024Hindi
Money

My age is 38 male married and have one son age 7 years, earning 1.7 lac per month. 7 lacs in mutual fund, 25 lacs in PF, 7 lacs in NPS, real estate is 45 lacs and 7 lakh cash In hand . Help me to achieve three goals 1)I need to buy one 2 bhk (~80 lakhs) flat down payment amount adjustment immediately. 2) my kids education atleast 30 lakhs 3) Retire at the age of 53 with how much curpus I should build to get monthly income of 2 lakhs

Ans: At 38 years old, you are in a strong financial position. Earning Rs. 1.7 lakhs per month provides a solid income base. You’ve accumulated Rs. 7 lakhs in mutual funds, Rs. 25 lakhs in PF, Rs. 7 lakhs in NPS, and Rs. 7 lakhs in cash. Additionally, you own real estate valued at Rs. 45 lakhs. These assets give you a good starting point for your financial goals. However, achieving your objectives requires careful planning and strategy.

Goal 1: Down Payment for a 2BHK Flat

You plan to purchase a 2BHK flat priced at approximately Rs. 80 lakhs. The immediate challenge is arranging the down payment.

Down Payment Requirement: Typically, the down payment is around 20% of the property’s value, which would be Rs. 16-20 lakhs. With Rs. 7 lakhs available in cash, you’ll need an additional Rs. 9-13 lakhs.

Asset Utilization: Consider liquidating some of your mutual fund investments to cover part of the down payment. Although selling investments might seem counterproductive, securing your home purchase takes priority.

Short-Term Loan Option: If you face a shortfall, a short-term personal loan could help bridge the gap. Ensure that this loan is manageable and plan to repay it quickly to avoid long-term financial strain.

Retain Real Estate Asset: While you may be tempted to sell your Rs. 45 lakh property to fund the down payment, retaining it is advisable. Real estate can appreciate over time and act as a financial safety net or source of rental income in the future.

Emergency Fund Consideration: Ensure that after making the down payment, you still have a sufficient emergency fund. Aim to keep at least 6 months of expenses in liquid assets.

Goal 2: Education Fund for Your Son

Your goal is to save Rs. 30 lakhs for your son’s education. Since your son is currently 7 years old, you have about 10-15 years to build this corpus.

Systematic Investment Plan (SIP): Continue and, if possible, increase your SIP contributions. An increased SIP will help in accumulating the education fund over time, leveraging the power of compounding.

Diversified Portfolio: Investing in a diversified mix of large-cap, mid-cap, and sectoral funds can provide a good balance of risk and growth potential. Avoid putting all your money in one type of fund to reduce risk.

Separate Education Fund: Consider setting up a dedicated education fund to ensure that these savings are not used for other purposes. This fund can be built using child-specific plans or targeted mutual funds aimed at education goals.

Periodic Review: Regularly review and adjust your investments based on market conditions and your son’s education timeline. If you notice any shortfalls or better opportunities, make the necessary adjustments.

Consider Inflation: Education costs are likely to rise due to inflation. Factor this in when planning your Rs. 30 lakh goal. You may need to increase your target to Rs. 40-50 lakhs to account for future inflation.

Goal 3: Retirement at Age 53

You aim to retire at 53 and need a retirement corpus that can provide a monthly income of Rs. 2 lakhs. With inflation, this requirement will increase by the time you retire.

Inflation-Adjusted Income: If we assume an inflation rate of 6%, Rs. 2 lakhs today will equate to approximately Rs. 4.5-5 lakhs monthly in 15 years. Your retirement corpus needs to be large enough to generate this income.

Estimated Corpus: To generate Rs. 4.5-5 lakhs per month, you’ll need a retirement corpus of around Rs. 10-12 crores. This estimate assumes a safe withdrawal rate and a balanced investment strategy during retirement.

Current Investments: You currently have Rs. 25 lakhs in PF, Rs. 7 lakhs in NPS, and Rs. 7 lakhs in mutual funds. Continue contributing to these, particularly to NPS and PF, as they offer tax benefits and steady growth. Increasing your contributions as your income rises will help you reach your goal.

Enhanced SIP Contributions: To build your retirement corpus, consider increasing your SIP contributions as your financial situation allows. Higher contributions now will lead to greater growth through compounding.

Diversification and Growth: Your retirement portfolio should be diversified across equity, debt, and hybrid funds. This approach provides both growth and stability, reducing the risk of market fluctuations affecting your retirement plans.

Debt Clearance: You currently have Rs. 8 lakhs in outstanding loans. Prioritize clearing these debts before retirement. Reducing your liabilities will lower your financial stress and allow you to focus on saving for retirement.

Health and Insurance Considerations: Ensure that you have adequate health coverage and life insurance during your retirement years. Consider increasing your health coverage to safeguard against rising medical costs. Review your life insurance to ensure it provides for your family if something happens to you.

Regular Financial Reviews: Review your retirement plan every 2-3 years. Adjust your investments and strategies based on changes in your financial situation, market conditions, and retirement timeline.

Investment Strategy and Asset Allocation

To achieve all three goals, your investment strategy needs to be aligned with each goal’s timeline and risk profile:

Short-Term Goal (Down Payment): Focus on liquid assets like mutual funds and savings for the down payment. Avoid taking on excessive debt.

Medium-Term Goal (Education Fund): Continue with SIPs in diversified equity funds. This balances growth and risk over a 10-15 year period.

Long-Term Goal (Retirement): Prioritize NPS, PF, and SIPs in equity and hybrid funds. These provide growth and stability over the next 15 years.

Emergency Fund Maintenance: Always maintain an emergency fund equal to 6-12 months of expenses. This ensures that unexpected events don’t derail your financial plan.

Final Insights

Your financial goals are ambitious but achievable with careful planning. For the flat purchase, consider liquidating some mutual funds and, if necessary, taking a small loan. Ensure that this does not impact your long-term financial stability. For your son’s education, focus on systematic investments and inflation adjustments to reach your Rs. 30 lakh goal. Lastly, to retire comfortably at 53 with a monthly income of Rs. 2 lakhs (inflation-adjusted), aim for a retirement corpus of Rs. 10-12 crores. Increasing your SIPs, paying off existing loans, and maintaining a diversified portfolio are crucial steps toward this goal. Regular reviews with a Certified Financial Planner can help you stay on track.

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 Kalirajan  |6625 Answers  |Ask -

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

Asked by Anonymous - May 10, 2024Hindi
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Hi sir, I am 33 years old now and earning of 3.5Lper month and can save up to 2L/month. I have 6L in nps and of 2L and no other savings or mutual funds yet. My daughter is 2yr old. I am planning to have own house with 2/3 cr and children education for mbbs cost around 2/3 cr And retirement 2L / month. Can you help me to achieve this goals.
Ans: Your proactive approach to financial planning at 33 years old, coupled with your robust savings potential, lays a solid foundation for achieving your ambitious goals. Let's embark on a journey to design a comprehensive financial plan that encompasses home ownership, education for your daughter, and a comfortable retirement.

Understanding Your Aspirations and Responsibilities:
Before delving into specific strategies, it's crucial to understand your aspirations for the future and the financial responsibilities you'll encounter along the way.

Crafting a Financial Blueprint:
We'll adopt a holistic approach to address your diverse financial objectives, including:

Home Ownership: Achieving your dream of owning a house valued at 2/3 crores requires diligent savings and strategic investment.

Education Planning: Providing for your daughter's education, especially for a professional course like MBBS, necessitates prudent planning and disciplined investment.

Retirement Security: Securing a retirement corpus that can sustain your desired lifestyle, with an income of 2 lakhs per month, calls for careful long-term planning.

Leveraging Investment Vehicles:
To realize your financial goals, we'll explore a combination of investment avenues tailored to your risk tolerance and time horizon.

Equity Investments: Equities offer the potential for long-term growth and wealth accumulation, making them suitable for achieving ambitious goals like home ownership and retirement security.

Debt Instruments: Debt investments provide stability and income generation, serving as a valuable component of your portfolio to fund short-to-medium-term goals like education expenses.

Systematic Investment Plans (SIPs): SIPs in mutual funds offer a disciplined approach to investing, allowing you to systematically allocate funds towards your financial objectives.

Mitigating Risks and Maximizing Returns:
While pursuing your financial aspirations, it's essential to remain mindful of potential risks and adopt risk mitigation strategies.

Diversification: Diversifying your investment portfolio across different asset classes and sectors helps mitigate risk and optimize returns.

Regular Review: Periodic review of your financial plan ensures alignment with your evolving goals and market dynamics, enabling timely adjustments as needed.

Commitment to Financial Growth:
As we embark on this journey together, rest assured that I'm committed to guiding you every step of the way. Your proactive approach and dedication to securing your family's future are commendable and will undoubtedly lead to financial success.

Conclusion: Empowering Your Financial Journey
In conclusion, by crafting a comprehensive financial plan tailored to your aspirations and responsibilities, we lay the groundwork for achieving your long-term goals. With prudent investment strategies and disciplined savings habits, your vision of home ownership, education for your daughter, and a secure retirement is well within reach.

Best Regards,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 21, 2024

Asked by Anonymous - Jun 10, 2024Hindi
Money
Hi I am 23 year old. I am earning 45k per month. I have 13 lakhs home loan for 25 year and 24 year left ( 11k EMI). I have small-small financial goal for kids and retirement. First is 25k, 50k and 1 lakh per month pension.
Ans: Assessing Your Current Financial Situation
At 23, you have already taken significant steps towards your financial goals. Managing a Rs 13 lakh home loan with an Rs 11,000 EMI shows that you are disciplined and responsible. Your monthly income of Rs 45,000 provides a solid base to build on. Let’s examine how you can work towards your future financial goals, including securing a pension of Rs 25,000, Rs 50,000, and Rs 1 lakh per month.

Understanding Your Financial Goals
Your goals are both realistic and achievable with the right strategy. Securing a comfortable pension is crucial for a stress-free retirement. It is wise to start planning early, as you are already doing. Let’s break down your goals:

Rs 25,000 per month pension: This could be your first milestone in achieving financial independence.

Rs 50,000 per month pension: This target will ensure a comfortable lifestyle, covering most of your needs.

Rs 1 lakh per month pension: This amount will allow you to live without financial stress, supporting a higher standard of living.

Building a Strong Foundation
Before focusing on your long-term goals, it’s essential to establish a solid financial foundation. This involves managing your debt, setting up an emergency fund, and ensuring proper insurance coverage.

1. Managing Your Home Loan
With 24 years remaining on your home loan, the interest paid over time will be substantial. Consider making extra payments towards the principal whenever possible.

Increasing your EMI or making lump-sum payments can significantly reduce the loan tenure and interest burden.

Balance paying off your loan with your investment goals. Don’t sacrifice long-term savings for short-term debt reduction.

2. Establishing an Emergency Fund
An emergency fund is crucial to cover unexpected expenses like medical emergencies, job loss, or home repairs.

Aim to save at least 6 to 12 months’ worth of living expenses in a liquid fund or a savings account.

This fund should be easily accessible but kept separate from your daily spending money.

3. Securing Insurance Coverage
Ensure you have adequate health and life insurance coverage. These are essential to protect your family and assets.

Term insurance is a cost-effective way to secure a substantial life cover, which is crucial, especially with a home loan.

Health insurance protects your savings from unexpected medical expenses.

Strategic Investment Planning
To achieve your pension goals, you need a strategic investment plan. This will involve diversifying your investments, focusing on long-term growth, and regularly reviewing your progress.

1. Investing for Long-Term Growth
Start by investing in a mix of equity and debt mutual funds. Equity funds offer higher returns over the long term but come with higher risk.

Debt funds or fixed-income instruments provide stability and lower risk, balancing your portfolio.

Avoid relying solely on direct funds. While they have lower costs, you might miss professional guidance. Regular plans through a Certified Financial Planner ensure you get expert advice.

2. Systematic Investment Plan (SIP)
Begin a SIP with a portion of your monthly income. Start with an amount you are comfortable with and gradually increase it as your income grows.

SIPs help in disciplined investing and averaging out the cost of investment over time.

Regularly review and adjust your SIPs to align with your changing financial goals.

3. Gold as a Hedge
Consider allocating a small portion of your investment to gold. Gold acts as a hedge against inflation and currency fluctuations.

Gold bonds or gold ETFs are better options than physical gold, offering safety and returns without storage concerns.

Planning for Specific Financial Goals
You mentioned having small financial goals for your kids and retirement. Let’s outline a plan for these:

1. Children’s Education Fund
Start saving for your children’s education as early as possible. Education costs are rising, and a dedicated fund will ensure you are prepared.

Invest in child-specific mutual funds or set aside a portion of your savings in a separate account.

Consider Sukanya Samriddhi Yojana if you have a daughter. It offers good returns and tax benefits.

2. Retirement Fund
Your retirement goal includes a pension of Rs 25,000, Rs 50,000, and Rs 1 lakh per month. Start by estimating the corpus required for each pension target.

Invest in a mix of equity and debt funds to build your retirement corpus. Equity funds offer growth, while debt funds provide stability.

Use a Certified Financial Planner to create a retirement plan that includes inflation-adjusted returns.

3. Long-Term Wealth Creation
Beyond your immediate goals, focus on creating long-term wealth. This includes investing in assets that grow over time, such as mutual funds and stocks.

Avoid investing in index funds as they often underperform in emerging markets like India. Actively managed funds can offer better returns with professional management.

Reinvest dividends and interest earned to maximize your wealth creation potential.

Tax Planning and Optimization
Tax planning is an essential part of your financial strategy. By optimizing your tax liabilities, you can increase your savings and investments.

1. Tax-Saving Investments
Invest in tax-saving instruments like ELSS mutual funds, PPF, and NPS. These not only save tax but also provide long-term growth.

ELSS funds have a lock-in period of 3 years and offer the dual benefit of tax saving and equity exposure.

PPF is a safe option with tax benefits but comes with a 15-year lock-in period.

2. Tax-Efficient Withdrawal Strategy
Plan a tax-efficient withdrawal strategy for your retirement corpus. Withdraw from investments in a way that minimizes tax liability.

Consult with a Certified Financial Planner to create a withdrawal plan that aligns with your pension goals and tax considerations.

Regular Monitoring and Adjustments
Achieving your financial goals requires regular monitoring and adjustments. Life circumstances and financial markets change, and your plan should be flexible enough to adapt.

1. Regular Portfolio Review
Review your portfolio every six months. Assess the performance of your investments and make adjustments if necessary.

Rebalance your portfolio to maintain the desired asset allocation. This might involve selling some assets and buying others.

Use professional guidance to ensure your investments remain aligned with your goals.

2. Adjusting for Life Changes
Major life events, like marriage, children, or career changes, might require adjustments to your financial plan.

Reassess your goals and strategy whenever such events occur. This ensures you stay on track to meet your long-term objectives.

Keep your Certified Financial Planner informed of any significant changes to get tailored advice.

Finally
At 23, you have ample time to build a secure financial future. By following a disciplined approach to saving, investing, and planning, you can achieve your goals of a comfortable pension and financial security for your family. Regularly review your plan and make adjustments as needed, and always seek professional guidance to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 12, 2024

Asked by Anonymous - Jul 02, 2024Hindi
Money
I am 45 year old my salary is 42000, wife is house wife, have only one son 13 year old, i'am investing thousand each Large cap, mid cap and small cap 3000 per month now,want to add 2000 more. And I have investing child star vision 25000per year for last 4 years, need four more years to invest. I also took term plan for myself 500000. I have corporate family health insurance also.10000 we are playing committee we 10 of us ..my dream is after 15 years a 3 bhk house price now 35 lkh now in Delhi.My month ly expenses is House Rant giving 4500, 6000 ration, Child school fees 3000 avarage.So how i should invest so i can manage my kids studies and other house expenses with making some my dream . In future as my salary will increase i can increase investment also.
Ans: I understand your situation and aspirations. Let’s break down your financial planning comprehensively to help you achieve your goals and manage your expenses effectively.

Income and Current Investments

Your monthly salary is Rs. 42,000, and you are already investing Rs. 3,000 in mutual funds (Rs. 1,000 each in large cap, mid cap, and small cap funds). Additionally, you are contributing Rs. 25,000 annually to a Child Star Vision plan, which you will continue for another four years. You also have a term plan with a coverage of Rs. 5,00,000 and corporate health insurance for your family.

You also mentioned participating in a committee with friends, contributing Rs. 10,000. This traditional saving method can be beneficial, but it’s essential to diversify investments for long-term goals.

Understanding Your Monthly Expenses

Your monthly expenses are as follows:

House Rent: Rs. 4,500
Ration: Rs. 6,000
Child’s School Fees: Rs. 3,000
Total Monthly Expenses: Rs. 13,500
Analyzing Current Financial Position

Your monthly income is Rs. 42,000, and after deducting expenses of Rs. 13,500, you are left with Rs. 28,500. Out of this, you are already investing Rs. 3,000 in mutual funds and Rs. 2,083 (approx.) per month in the Child Star Vision plan. This leaves you with Rs. 23,417.

Investment Goals and Planning

You aim to purchase a 3 BHK house in Delhi after 15 years, which currently costs Rs. 35 lakhs. This is a long-term goal that will require disciplined savings and smart investments. Additionally, you want to ensure your child's education and manage household expenses.

Increasing Mutual Fund Investments

You are planning to add Rs. 2,000 more to your monthly investments. Here’s a recommended strategy:

Increase your allocation in large cap funds to Rs. 1,500.
Increase your allocation in mid cap funds to Rs. 1,500.
Continue with Rs. 1,000 in small cap funds.
Large cap funds are generally more stable and less volatile, providing consistent returns over time. Mid cap funds offer growth potential, and small cap funds, though riskier, can provide significant returns in the long run.

Mutual Funds: Categories and Benefits

Mutual funds are a great way to build wealth over time. Here’s a brief overview:

Large Cap Funds: These funds invest in well-established companies with large market capitalization. They are less volatile and offer steady returns.

Mid Cap Funds: These invest in medium-sized companies. They are riskier than large cap funds but can provide higher returns.

Small Cap Funds: These invest in smaller companies. They are highly volatile but have the potential for significant growth.

Benefits of Mutual Funds:

Diversification: Mutual funds spread investments across various sectors, reducing risk.
Professional Management: Funds are managed by experienced professionals.
Liquidity: Mutual funds can be easily bought and sold.
Compounding: Reinvested earnings can grow exponentially over time.
Power of Compounding

Compounding is a powerful concept where your investment earns returns, and those returns earn further returns. Over long periods, this can significantly increase your wealth. For example, investing Rs. 5,000 monthly at an average return of 12% can grow substantially over 15 years.

Child’s Education Planning

Considering your child’s future education, continue with the Child Star Vision plan. Additionally, you can start a dedicated education fund. Allocate Rs. 2,000 monthly in a balanced mutual fund or an aggressive hybrid fund. These funds provide a mix of equity and debt, offering growth with stability.

Balancing Investments and Expenses

Ensure your monthly expenses are well-managed while investing for the future. Here are some tips:

Budgeting: Create a monthly budget to track income and expenses. Identify areas to save and invest the surplus.
Emergency Fund: Maintain an emergency fund equivalent to 6-12 months of expenses. This can be in a savings account or liquid mutual fund.
Insurance: Adequate health and life insurance coverage is crucial. Your current term plan of Rs. 5,00,000 might be insufficient. Consider increasing it to 10-15 times your annual income.
Long-term Goal: Buying a House

To buy a 3 BHK house in Delhi after 15 years, start a dedicated home purchase fund. Given the current price of Rs. 35 lakhs, factor in inflation (average 6-7% annually). You can invest in a mix of equity mutual funds for growth and debt funds for stability.

Recommended Allocation:

Equity Mutual Funds: Rs. 3,000 monthly.
Debt Mutual Funds: Rs. 2,000 monthly.
Review and adjust the allocation annually based on market conditions and goals.

Increasing Investment with Salary Hikes

As your salary increases, proportionally increase your investments. Aim to increase your investment rate by at least 10% annually. This helps in compounding your wealth faster.

Mutual Fund Advantages and Risks

Advantages:

Diversification reduces risk.
Professional management ensures better returns.
Systematic Investment Plans (SIPs) promote disciplined investing.
Risks:

Market volatility can affect returns.
Past performance is not indicative of future returns.
Inflation risk can erode purchasing power.
Disadvantages of Direct Funds

Direct funds require more knowledge and active management. Investing through a Certified Financial Planner (CFP) ensures professional advice, better fund selection, and regular reviews. This can significantly enhance your investment performance.

Avoiding Real Estate Investment

While real estate can be lucrative, it requires significant capital, is less liquid, and involves higher transaction costs. Mutual funds, on the other hand, offer flexibility, liquidity, and professional management.

Managing Committee Contributions

Continue your committee contributions if it aligns with your financial goals. Ensure it doesn’t strain your monthly budget. Utilize the proceeds for lump sum investments or emergency funds.

Final Insights

Achieving your financial goals requires a balanced approach of disciplined savings, smart investments, and regular reviews. Prioritize your child’s education, build a solid emergency fund, and increase investments as your salary grows. By leveraging the power of mutual funds and compounding, you can achieve your dream of owning a 3 BHK house in Delhi and ensure a secure financial future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 12, 2024

Money
I am 45 year old my salary is 42000, wife is house wife, have only one son 13 year old, i'am investing thousand each Large cap, mid cap and small cap 3000 per month now,want to add 2000 more. And I have investing child star vision 25000per year for last 4 years, need four more years to invest. I also took term plan for myself 500000. I have corporate family health insurance also.10000 we are playing committee we 10 of us ..my dream is after 15 years a 3 bhk house price now 35 lkh now in Delhi.My month ly expenses is House Rant giving 4500, 6000 ration, Child school fees 3000 avarage.So how i should invest so i can manage my kids studies and other house expenses with making some my dream . In future as my salary will increase i can increase investment also. Regards Jason
Ans: Jason,

Thank you for sharing your financial goals and current situation. I understand your aspiration to buy a 3 BHK house in Delhi in the next 15 years and ensure a secure future for your family. Let's break down your financial plan step by step.

Current Financial Snapshot
Salary: Rs. 42,000 per month
Wife: Homemaker
Son: 13 years old
Investments:
Rs. 1,000 each in large cap, mid cap, and small cap mutual funds (total Rs. 3,000/month)
Rs. 25,000/year in Child Star Vision (for 4 more years)
Insurance: Rs. 5,00,000 term plan
Health Insurance: Corporate family health insurance
Committee: Rs. 10,000/month
Expenses:
House rent: Rs. 4,500
Ration: Rs. 6,000
Child’s school fees: Rs. 3,000
Investing for Future Goals
1. Increasing SIP Investments

You are already investing Rs. 3,000 per month in mutual funds. Adding Rs. 2,000 more is a wise decision. Here’s how you can allocate the additional amount:

Large Cap Fund: Rs. 1,000
Mid Cap Fund: Rs. 500
Small Cap Fund: Rs. 500
Benefits of Mutual Funds
Diversification: Spreading investments across different sectors.
Professional Management: Managed by experienced fund managers.
Compounding: Potential to grow your wealth over time through compounding.
Evaluating Fund Performance
Actively managed funds can outperform the market with the right strategy. Unlike index funds, actively managed funds aim to beat the market index, providing potentially higher returns.

Child Education Fund
2. Child Star Vision Plan

You have been investing Rs. 25,000 annually for the past four years. Continue this for the next four years to build a substantial education corpus.

Managing Risk and Return
Risk: Medium to high due to market volatility.
Return: Potential for higher returns compared to traditional savings.
Insurance Coverage
3. Term Insurance

Your term plan of Rs. 5,00,000 is essential for financial security. Consider increasing the coverage as your responsibilities grow.

Health Insurance
4. Corporate Health Insurance

Ensure that your corporate health insurance covers all major health risks. Consider a personal health policy for added security.

Monthly Expenses Management
5. Budgeting

Your monthly expenses total Rs. 13,500. Here are some budgeting tips:

Track Expenses: Keep a record of all expenditures.
Reduce Unnecessary Costs: Identify and cut down on non-essential spending.
Saving for a 3 BHK House
6. Long-Term Goal

Your dream of owning a 3 BHK house worth Rs. 35 lakhs in Delhi can be achieved with disciplined saving and investing.

Real Estate Price Inflation: Factor in the potential rise in property prices over 15 years.
Saving Plan: Start a dedicated savings plan for the house down payment.
Education and Other Expenses
7. Child’s Education

Education costs will rise as your child grows. Plan for higher secondary and college expenses.

Increasing Investment as Salary Increases
8. Salary Growth

As your salary increases, boost your investments proportionally.

Review Annually: Assess and adjust your investments yearly.
Emergency Fund: Maintain an emergency fund for unforeseen expenses.
Power of Compounding
The key to building wealth is the power of compounding. By reinvesting your returns, your investments grow exponentially over time.

Understanding Fund Categories
9. Large Cap Funds

Characteristics: Invest in companies with a large market capitalization.
Risk: Lower risk compared to mid and small cap funds.
Return: Stable and steady returns.
10. Mid Cap Funds

Characteristics: Invest in medium-sized companies with growth potential.
Risk: Higher risk than large cap funds.
Return: Potential for higher returns.
11. Small Cap Funds

Characteristics: Invest in small-sized companies with high growth potential.
Risk: Highest risk among the three.
Return: Potential for the highest returns.
Actively Managed Funds vs. Direct Funds
12. Disadvantages of Direct Funds

Research Required: You need to research and manage your portfolio.
Time-Consuming: Regular monitoring is necessary.
13. Advantages of Regular Funds

Expert Management: Managed by professionals.
Convenience: Less time-consuming and hassle-free.
Additional Tips
14. Emergency Fund

Set aside three to six months' worth of expenses in a liquid fund for emergencies.

15. Tax Planning

Invest in tax-saving instruments like ELSS (Equity Linked Savings Scheme) to reduce your tax burden.

Final Insights
Your current financial strategy is a good start. By adding Rs. 2,000 more to your SIPs, you are taking a positive step towards your goals. Keep a close eye on your investments and adjust as needed. Continue investing in your child’s education plan and ensure adequate insurance coverage. With disciplined saving and investing, your dream of owning a 3 BHK house in Delhi is achievable.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Anu Krishna  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Asked by Anonymous - Oct 07, 2024Hindi
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Relationship
Mam i am a 52 year ols women i have never had a secure relationship only who wanted to have s.Marriage in proposals too dint work for me. At late 40 age i met a guy it was all good till start 1 year but since 3 years we just fight my fault to as i have no family no friends and all i have to look after 2 aged parents and i am deep involved my life is just that. This relationship is good to talk on phone as all i do is talk my problems 24 by 7 365 days which i understands upsets him. But i see no effort too from him for meeting planning dates and if i do i pay for it all he never pays . I lost interest felt disappointed after going on saying he never tries to make plans talk future his family finance. I am not sure what i should do stay or live my life alone which i was always doing.
Ans: Dear Anonymous,
Start fresh and if you had a clean slate, what would you want to draw on it?
All your miseries or what you actually want from life?
When you meet someone new and you dump your set of issues on them, how exactly do you think they are going to be interested in taking you out on a date?
Your prospective life partner is not a dumping yard for your life's problems BUT a person that is going to marry you and support you and who you can trust. And will you start this relationship by actually talking only about your problems? Honestly, you need to ask yourself if you will be interested in a guy who keeps ranting about all things going wrong...
Establish a connection by being on a positive ground and showing the other person that you care and also are interested in knowing about them. This interest will let them lower their guard down and actually connect with you at an emotional level and then you can pursue this as a potential life partner association...somewhere down the line, they will be genuinely interested in being a part of your challenges and that's when you make them your strength to solve these challenges. Am I making sense to you?
Do you see how you have been sabotaging your own future? Dust yourself, become genuinely interested in people not to dump your problems on them but to make a genuine connection and watch how things change for you. Prioritize your life not your problems!

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

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Anu

Anu Krishna  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Relationship
Hi, I am a 36yo guy. Married and have 2 beautiful kids. I am a naturally happy person in life and have achieved reasonable success through my hard work. From last 3 years i am in love with a married girl who works at an office near my workplace. We two believe that we are best suited for each other in every aspect i.e. mental, emotional and physical. We share a great chemistry that we never felt with our respective spouses. We decided that we both cant leave our spouses because of our kids. But very often she keeps on getting crazy and tortures and taunts me that i love my wife more and doesnt give value to her. She is mostly unhappy about this in her life and many times abuses me when she sees that i am a naturally happy and content person. I have even told her that if she wants we can take divorce from our spouses and move-in together. But she never accepts that also and keeps on making my life hard. But i do believe that we both love each other like crazy and my sexual life with her is just out of this world. I have a very high libido and she satisfies me like no other girl. My question is how can i make her sane and make her trust me that i am more inclined towards her?
Ans: Dear Avinash,
I am sure by now you realize that having parallel lives is not easy. Maybe you are at that stage where a decision must be made...
You owe at least that much to your respective spouses who have nothing to do this life of yours...

The lady in question wants the cake and wants to eat it too...obviously she needs to see that if she wants her marriage, then you are going to keep your marriage as well and with that all the insecurities that arise must also be accepted as this is something that the two of you got into willingly...did she not know that a relationship outside of marriage comes with its set of challenges like insecurities, doubts, fears, instability and more? I guess it's not about you making her sane and trust you BUT for the two fo you to come to some sort of a decision on where all this is leading?

Again, I say this...leading two lives in parallel ain't easy; especially on an emotional level!

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

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Anu

Anu Krishna  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Asked by Anonymous - Oct 01, 2024
Relationship
Hi Anu, I have been reading since long the advices you give to others expecting that there can be an identical issue which i am suffering, i am 48yrs and my wife 42yrs married for 22yrs & having grown up children, over period of time my wife has become more dominating expecting me to listen and follow everything what she says, everything was going fine for until last six years when she was following me as a dutiful wife, since last 6-7yrs she is disinterested in sex also, i sit and speak with her trying to address all the issues, but things get back to ZERO within days, she has turned very short tempered and egoistic, shouting and using foul language in rage at times, we both are highly educated and give lectures at college with limited reasonable income, the problem is she compares her life to others and disturbs our life, ours is a marriage against parents so both the side relatives are little indifferent and we are not extroverts or that persons who are outgoing to change all that, we just lead our life within ourselves and try to help the relatives whenever they come to us. My question is that is it not cruel for a wife to deprive the husband of sex and develop unreasonable expectations comparing the lifestyles of others. when at peace my wife suggests that i can look outside for sex and she is ok with it but i don't believe in it and in her words, at times in rage she keeps asking for divorce uttering foul language, i keep reminding her that emotions, anger and rage shall only aggravate the issues we should know what we actually want and seek it speaking to each other, i feel that my wife doesn't know what she wants from herself or from me or from life, Anu, Is this all that pre-menopause frustrations which is building up or is it some mental issues which are surfacing due to negligence from me or our relatives? Please suggest? Thank you
Ans: Dear Anonymous,
Let's understand it in 3 ways..

1) Whether your wife is in pre-menopause or perimenopause or menopause stage can be determined only by a doctor. A lot of material floats on the internet convincing people of one over the other BUT it's important to get it validated by a doctor that will help your wife understand what is going on with her body and how it impacts her mind...

2) It is also possible that the current sex routine maybe boring to her and infusing it with some spice can get things going? So, think out of the box here...

3) Also, you might want to think if the emotional bond between the two of you has broken down; women respond to sex easier when they feel emotionally connected and safe with their man...

What will be useful in your situation is: to reconnect with her and aim to connect with her emotionally. This will help her in conveying to you what might be the problem and then it gets easier to solve it or take necessary steps...

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

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Milind

Milind Vadjikar  |418 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

Milind

Milind Vadjikar  |418 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

Milind

Milind Vadjikar  |418 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

Asked by Anonymous - Oct 15, 2024Hindi
Listen
Money
Hi Milind I am 52 years old single woman, from small town and who has worked hard ro reach to level in corporate with good salary. I have a corpus of about 5 crores and small flat in tier 2 town. I dont enjoy yhis new job wirh reputed brand and at a senior level as i dont find ut engaging or doing justice to role. My parents are old and i worry for rhem ans want to spent rkmw with them. With this corpus can i take a call to leave job and get decent income of atleast 2-2.5 lac a month. I have been quite action oriented, but now my mind and body feel exhasuted and also fear rhat without a job i will become lazy. Also living with parents will be a joy, at the same time resteictive to eating or socializing. I am quite concious ,if i leave this well paying ,senior role job with a big renonwed corporate which many of my friends aspired for and whole lot of people congratulated me ,they will think i was not able to justify my role,hence left . I dont want that impression at last stage of career as whole life i have been seen as hard working ,passionate professional. Such rhoughts are taking toll on my mental health. Please advise what should be done
Ans: Hello;

With the corpus that you have (5 Cr) you may buy an immediate annuity from a life insurance company and can expect to receive monthly payout of 2.5 L (pre tax)from the very next month. 6% annuity rate considered, if you shop around and negotiate you may get a better rate.

You can opt for increasing annuity to account for inflation and return of purchase price to your nominee, after you.

Ensure good health insurance policy to cover yourself and your parents.

Think about some vocation which you would like to pursue passionately after retirement.

You are seeking retirement from regular 9 to 5 job not from pursuit of your passion/goals.

It could be in the role of an consultant, counselor or educator.

You should take the decision which you feel is appropriate for you irrespective of what people comment because they will comment in any case.

Learn to ignore such people.

Happy Retirement!!

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Milind

Milind Vadjikar  |418 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

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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