Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 04, 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 - Jun 29, 2024Hindi
Money

My Age is 47, my current saving is as follows 1. EPF : 30 L 2. MF & Equity : 2 L 3. FD : 60L 4. ULIP : 15 One parental house , one kid who is studing class 12 th kindly suggest after retirement need 1.5 L / month

Ans: You've done well in accumulating a substantial savings portfolio. Your current savings include Rs. 30 lakhs in EPF, Rs. 2 lakhs in mutual funds and equity, Rs. 60 lakhs in fixed deposits, and Rs. 15 lakhs in ULIPs. You also have a parental house and a child in Class 12. Your goal is to generate Rs. 1.5 lakhs per month post-retirement.

Let’s dive into the best strategies to achieve this.

Analysing Your Current Investments
EPF (Employee Provident Fund)

EPF is a great way to save for retirement with tax benefits. It offers a stable and secure return. However, it might not be enough to meet your monthly needs alone.

Mutual Funds and Equity

Your Rs. 2 lakhs in mutual funds and equity is relatively low. Equity and mutual funds can provide high returns, especially over long periods. These can be volatile in the short term but tend to grow well over time.

Fixed Deposits (FD)

You have Rs. 60 lakhs in fixed deposits. FDs are secure but offer lower returns. These are good for preserving capital but not the best for wealth creation.

ULIPs (Unit Linked Insurance Plans)

ULIPs combine investment and insurance. While they offer some returns, the charges and fees can be high. They might not be the best option for investment growth.

Parental House

Real estate can be a valuable asset, but it’s not as liquid as other investments. It’s great for security but not ideal for generating monthly income.

Setting Financial Goals and Strategies
Retirement Corpus Calculation

To generate Rs. 1.5 lakhs per month post-retirement, you need to build a substantial corpus. Assuming a 4% withdrawal rate, you would need a corpus of around Rs. 4.5 crores. This ensures you don’t outlive your savings.

Diversification for Stability and Growth

Diversifying your investments is crucial. Don’t rely on a single investment type. Spread your money across various asset classes like equity, debt, and hybrid funds. This balances risk and return.

Optimising Your Current Portfolio
Increasing Mutual Fund Investments

Invest more in mutual funds for long-term growth. Choose a mix of equity and hybrid funds. Equity funds have high growth potential, while hybrid funds balance risk. Actively managed funds can outperform index funds, providing better returns.

Surrendering ULIPs

Consider surrendering your ULIPs. The high fees and charges reduce returns. Reinvest this money into mutual funds for better growth. Regular funds through a certified financial planner (CFP) offer guidance and better returns than direct funds.

Reducing Fixed Deposits

While FDs are safe, they offer lower returns. Reduce your FD investments and move some of this money into mutual funds or debt funds. Debt funds provide better returns than FDs with moderate risk.

Planning for Post-Retirement Income
Systematic Withdrawal Plan (SWP)

Use a systematic withdrawal plan from your mutual fund investments. This provides a regular income post-retirement while keeping your principal invested. It’s tax-efficient and ensures you get a steady income.

Balancing Risk and Return

Post-retirement, focus on a balanced portfolio. Include equity for growth and debt for stability. This ensures your portfolio grows while providing a steady income.

The Power of Compounding
Early and Regular Investments

Start investing early and regularly. The power of compounding grows your wealth significantly over time. Even small regular investments can lead to substantial growth.

Reinvesting Returns

Reinvest your returns to benefit from compounding. This accelerates your portfolio growth and helps you reach your financial goals faster.

Assessing the Risk Factors
Market Volatility

Equity markets can be volatile. But over the long term, they tend to provide high returns. Diversification helps manage this risk.

Inflation

Inflation reduces the purchasing power of your money. Invest in assets that outpace inflation, like equity and hybrid funds.

Longevity Risk

Plan for a longer retirement. Ensure your corpus lasts by investing wisely and managing withdrawals.

Benefits of Professional Guidance
Certified Financial Planner (CFP)

A CFP provides expert advice tailored to your goals. They help you navigate complex financial decisions and optimise your portfolio.

Regular Fund Investments

Investing through a CFP in regular funds offers advantages. You get professional management, better fund selection, and ongoing advice.

Creating a Robust Retirement Plan
Setting Clear Goals

Define your retirement goals clearly. Know how much you need monthly and plan your investments accordingly.

Regular Reviews and Adjustments

Review your portfolio regularly. Adjust your investments based on market conditions and your changing needs.

Building a Safety Net
Emergency Fund

Maintain an emergency fund. It should cover at least 6-12 months of expenses. This provides security against unexpected financial needs.

Health Insurance

Ensure you have adequate health insurance. Medical costs can deplete your savings quickly. A good health insurance plan protects your wealth.

Future-proofing Your Finances
Estate Planning

Plan your estate to ensure your assets are distributed according to your wishes. This includes making a will and considering trusts if needed.

Tax Planning

Optimize your investments for tax efficiency. Use tax-saving instruments and plan withdrawals to minimise tax liabilities.

Final Insights
Planning for retirement is a journey that requires careful consideration and strategic planning. Your current savings provide a strong foundation, but optimizing your investments can help you achieve your goal of Rs. 1.5 lakhs per month post-retirement.

By diversifying your portfolio, increasing your exposure to mutual funds, and leveraging professional guidance from a Certified Financial Planner, you can balance growth and stability. The power of compounding, combined with regular reviews and adjustments, will ensure your financial security and peace of mind in retirement.

Remember, the key to successful retirement planning is starting early, staying disciplined, and making informed decisions. Your future self will thank you for the efforts you put in today.

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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 30, 2024

Listen
Money
My age is 47 years and retirement will be at 58th age. I have 2 daughters one at college and second is school level studying. My current monthly minimum required expenses is Rs.30000/-. Currently my investment in EPF is Rs.25 L, Mutual fund Rs.10 L, Leave encashment balance is Rs.6 L, Gratuity Rs.5 L approx., FDs Rs.3 L, life Insurance saving Rs.2 L. My question is apart from above additionally how much should I invest per month to keep my current lifestyle aftery retirement. I am residing at my own home but though building is strong age has reached 30 years old.
Ans: Considering your current expenses, age, and retirement goals, it's essential to plan your investments carefully to maintain your lifestyle post-retirement. Here's a rough estimate to help you determine how much you should invest monthly:

Calculate your post-retirement expenses: Estimate your expenses after retirement, factoring in inflation, healthcare costs, and any additional expenses you may incur.
Determine your retirement corpus: Based on your post-retirement expenses and expected lifespan, calculate the corpus you'll need to support yourself and your family during retirement.
Assess your existing investments: Take stock of your current investments and determine how much they are likely to grow by the time you retire. Consider consulting a financial planner for a detailed analysis.
Calculate the shortfall: After considering your existing investments, calculate how much additional corpus you need to accumulate by the time you retire.
Determine monthly investment required: Based on the shortfall and the number of years until your retirement, calculate the monthly investment required to bridge the gap and achieve your retirement corpus goal.

..Read more

Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

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

Asked by Anonymous - Apr 17, 2024Hindi
Listen
Money
RamalingamJi, I am 51 years old & having approx. corpus of Rs. 30L. I want to have 1.5L/month after retirement (at the age of 58 yrs.) so how much should I save from now so that I can have this much money w/o trouble. At present I am investing 20K/month in MF, 12.5K/month in PPF, 30K/month in EPF, 12K in Sukanya Smridhi, 17k/month in NPS, 6k/month in another PPF & another 20K/month in other saving schemes making it total 117.5K/month.
Ans: Planning for your Retirement Income
You're taking a great step by planning for your retirement income at 51. Here's how we can estimate how much you might need to save to reach your goal of Rs. 1.5 lakh per month after retirement at 58.

Factors to Consider:

Current Savings: Your current monthly savings of Rs. 1,17,500 is a significant starting point.
Time Horizon: You have 7 years (58 - 51) till retirement.
Desired Retirement Income: Your target monthly income is Rs. 1,50,000.
Inflation: Inflation erodes the purchasing power of money over time. Consider a conservative estimate of 5-7% inflation.
Rate of Return: The expected return on your investments will determine how much you need to save.
Here's a simplified calculation (assuming a fixed rate of return):

Total Corpus Required:

Let's assume an 8% annual return and 7% inflation (adjusted return of 1%).
We can use the formula for perpetuity present value (PV) to calculate the corpus needed: PV = Desired monthly income (adjusted for inflation) / Adjusted annual return PV = (Rs. 1,50,000 * 12) / (1 + 0.01) = Rs. 1,80,00,000
Shortfall in Corpus:

You already have Rs. 30 lakh corpus.
The shortfall would be Rs. 1,80,00,000 - Rs. 30,00,000 = Rs. 1,50,00,000
Additional Monthly Savings:

To calculate the additional monthly savings required, we can use a savings goal calculator available online.
These factors will be considered: time horizon, desired corpus, and expected return.
Important Points to Remember:

This is a simplified calculation. Real-world returns may fluctuate.
Consider consulting a financial advisor for a personalized plan considering your risk tolerance and investment portfolio.
You've mentioned various investments (MF, PPF, EPF, etc.). An advisor can help assess the asset allocation and suggest adjustments if needed.
Positive Aspects of your Current Savings:

Your current savings of Rs. 1,17,500 per month is commendable.
You're invested in a variety of instruments (equity, debt, government schemes).
Next Steps:

Estimate Shortfall: Use a retirement calculator to get a more accurate estimate of the additional monthly savings required.
Review Investments: Consult a financial advisor to assess your current asset allocation and suggest adjustments if necessary to align with your retirement goals.
Increase Savings: If there's a shortfall, consider ways to increase your monthly savings by reviewing expenses or increasing income.
By planning and potentially making some adjustments, you can be well on your way to achieving your desired retirement income.

..Read more

Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 04, 2024

Asked by Anonymous - May 30, 2024Hindi
Money
I am 51 yrs old woman. I have invested till now around 1 CR in MF, different Lic of about in total 10 lakhs that I will receive on maturity. I have different ULip policies which I will receive about 50 -60 lakhs on maturity, NSC of 2 lakh on maturity and negligible amount of 1 . 30 lakhs of Ppf which I invested since last 2 yrs . I have a home loan of about 3 lakhs left . 2 storey house of our own , though under loan . I have 2 children, 19 yrs daughter and 14 yrs son. How much should I save if I plan to retire at 55 . I have no pension
Ans: Planning for retirement at 55 requires a detailed and strategic approach, especially when considering your current financial situation and future needs. At 51, you have four years to build and solidify your retirement corpus. Let’s assess your current financial status and develop a comprehensive plan to ensure a comfortable and secure retirement.

Understanding Your Financial Position

1. Mutual Funds (MF)

You have invested Rs 1 crore in mutual funds. This is a significant investment and provides a strong foundation for your retirement corpus. Regular reviews and adjustments based on market conditions and fund performance are essential.

2. Life Insurance Policies (LIC)

You have different LIC policies worth Rs 10 lakhs. These policies will mature and provide a lump sum amount. This can be used to meet various financial needs or reinvested for better growth.

3. ULIP Policies

Your ULIP policies are expected to yield Rs 50-60 lakhs on maturity. ULIPs combine insurance and investment, offering returns based on market performance. Evaluate these policies to maximize their benefits.

4. National Savings Certificate (NSC)

You have Rs 2 lakhs in NSC, which is a safe investment providing fixed returns. This can be part of your low-risk portfolio.

5. Public Provident Fund (PPF)

You have invested Rs 1.30 lakhs in PPF over the last two years. PPF offers tax-free returns and should be continued for its benefits.

6. Home Loan

You have a home loan of Rs 3 lakhs left. Clearing this loan before retirement is advisable to reduce financial burden.

7. Real Estate

You own a two-storey house, though it’s under loan. Owning your residence is a significant advantage in retirement planning.

8. Dependents

You have two children, a 19-year-old daughter and a 14-year-old son. Their education and other needs must be considered in your financial planning.

Your commitment to building a diversified investment portfolio is commendable. Balancing investments in mutual funds, insurance, and savings schemes reflects a thoughtful approach to financial security. Your proactive planning for your children's future is also admirable.

Analyzing Income and Expenses

1. Monthly Income

Identify all sources of income, including your salary, rental income, or any other income streams. This will help in understanding your saving potential.

2. Monthly Expenses

Calculate your monthly household expenses, including utilities, groceries, education, and other essential expenses. This will provide clarity on your spending and saving capacity.

Investment Analysis and Strategy

1. Enhancing Mutual Fund Investments

Your Rs 1 crore investment in mutual funds is a strong base. Focus on a diversified portfolio with large-cap, mid-cap, and small-cap funds. Regularly review and rebalance to optimize returns.

2. Life Insurance Policies (LIC)

When your LIC policies mature, reinvest the Rs 10 lakhs into diversified mutual funds or other investment avenues for better growth.

3. Maximizing ULIP Benefits

Your ULIP policies are expected to yield Rs 50-60 lakhs. Review these policies with a Certified Financial Planner (CFP) to maximize their returns. Consider partial withdrawals or reinvestment based on performance.

4. Public Provident Fund (PPF)

Continue contributing to your PPF account to take advantage of its tax-free returns. Increase contributions if possible to build a substantial corpus.

5. Clearing Home Loan

Aim to clear your Rs 3 lakhs home loan before retirement. Use any surplus income, bonuses, or the maturity amount from LIC policies to repay the loan.

Planning for Children’s Education

1. Daughter’s Higher Education

Your 19-year-old daughter may soon require funds for higher education. Allocate a portion of your investments or ULIP returns towards her education fund.

2. Son’s Future Education

Your 14-year-old son will also need funds for his education. Plan and save accordingly to ensure his needs are met without straining your retirement corpus.

Retirement Corpus Calculation

1. Estimating Post-Retirement Expenses

Calculate your annual expenses post-retirement, including living expenses, healthcare, travel, and any other lifestyle needs. Factor in inflation to get a realistic estimate.

2. Retirement Corpus Needed

To determine the retirement corpus, use the rule of thumb that suggests having 25-30 times your annual expenses. This ensures you have enough to sustain you through your retirement years.

3. Investment Strategy

Equity for Growth

Invest a significant portion in equity mutual funds for high returns. Equities can outpace inflation, ensuring your corpus grows over time.

Debt for Stability

Allocate funds to debt instruments for stability and regular income. This balances the high-risk equity component and provides a steady income stream.

Diversified Portfolio

Choose diversified mutual funds with a mix of equity and debt. This provides growth potential with reduced volatility.

Tax Planning

1. Maximizing Tax Deductions

Utilize Section 80C for tax-saving investments like ELSS, PPF, and insurance premiums. This reduces your taxable income and increases savings.

2. National Pension System (NPS)

Consider investing in the National Pension System (NPS) for additional tax benefits under Section 80CCD(1B). NPS also provides a steady post-retirement income.

Health and Life Insurance

1. Adequate Health Insurance

Ensure you have comprehensive health insurance for yourself and your family. This covers major medical expenses and critical illnesses, reducing financial strain.

2. Sufficient Life Insurance

Opt for a term life insurance policy covering at least 10-15 times your annual income. This ensures financial security for your family in case of any unforeseen events.

Regular Portfolio Review

1. Annual Review

Review your investment portfolio annually. Adjust investments based on performance and changing financial goals to optimize returns.

2. Rebalancing

Rebalance your portfolio to maintain the desired asset allocation. This involves selling high-performing assets and buying underperforming ones to maintain balance.

Consulting a Certified Financial Planner

1. Personalized Advice

A Certified Financial Planner (CFP) provides tailored advice. They help navigate complex financial decisions and optimize your strategy.

2. Regular Consultations

Schedule regular consultations with your CFP. This ensures you stay on track and make informed decisions based on changing financial circumstances.

Actively Managed Funds

1. Professional Management

Actively managed funds offer professional management. Fund managers make informed decisions to maximize returns.

2. Market Adaptation

These funds adapt to market conditions. They can outperform passive funds, especially in volatile markets.

Disadvantages of Index Funds

1. Lack of Flexibility

Index funds replicate the market. They lack the flexibility to adapt to changing conditions, which can limit growth potential.

2. Average Returns

Index funds typically provide average market returns. Actively managed funds aim to outperform the market, offering higher returns.

Regular Funds Over Direct Funds

1. Professional Guidance

Investing through regular funds provides professional guidance. A Mutual Fund Distributor (MFD) and CFP ensure your investments align with your goals.

2. Regular Reviews

Regular funds offer periodic reviews and adjustments. This maximizes returns and manages risks effectively.

Expense Management

1. Track Spending

Monitor your monthly expenses. Identify areas where you can cut back and save more. This helps in increasing your savings rate.

2. Budgeting

Create a budget and stick to it. Allocate funds for savings, investments, and necessary expenses. This ensures disciplined financial management.

Long-Term Focus and Patience

1. Stay Invested

Remain invested for the long term. Market fluctuations are normal, and staying invested ensures you benefit from compounding.

2. Avoid Impulsive Decisions

Avoid making impulsive decisions based on short-term market movements. Stick to your long-term plan for better returns.

Diversification Across Asset Classes

1. Equity, Debt, and Gold

Diversify across equity, debt, and gold. Each asset class performs differently, providing stability and growth.

2. Balanced Approach

A balanced approach reduces risk and enhances returns. Diversification ensures a robust portfolio.

Tracking Progress and Adjustments

1. Financial Planning Tools

Use financial planning tools to track your progress. These tools help monitor investments and net worth, providing a clear picture of your financial health.

2. Make Necessary Adjustments

Adjust your investments based on changes in financial situation, goals, and market conditions. Stay flexible and proactive.

Staying Informed and Educated

1. Financial Knowledge

Stay informed about financial markets and investment opportunities. Continuous learning empowers better financial decisions.

2. Regular Updates

Keep up with market trends and updates. This helps in making timely adjustments to your portfolio for optimal returns.

Conclusion

Your goal of retiring at 55 is achievable with a disciplined approach. Focus on increasing your investments, managing debt, and staying diversified. Regular reviews and consultations with a Certified Financial Planner will ensure you stay on track. By following this comprehensive plan, you can achieve financial freedom and secure a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 09, 2024Hindi
Money
Dear Sir, My age is 42, my current savings are 1) FD: 70 lakhs 2) MF: 5 lakhs 3) Equity: 10 lakhs 4) EPF: 80 lakhs 5) PPF: 20 lakhs(another 5 years to mature . 1.5 lacs per year is investment amount) I am planning to retire by 58. I need a monthly retirement amount of 2 lakhs per month. I don't have any loans at the moment. I have two kids studying in 8th and 4th. Please let me know if the current investment is sufficient enough to generate this income. Thank you sir.
Ans: Firstly, I must commend you for your diligent saving and planning. You have built a solid financial foundation with significant investments in Fixed Deposits (FD), Mutual Funds (MF), Equity, Employee Provident Fund (EPF), and Public Provident Fund (PPF). Your financial discipline is truly admirable.

Evaluating Your Current Investments
Let's evaluate your current investments:

FD: Rs 70 lakhs
MF: Rs 5 lakhs
Equity: Rs 10 lakhs
EPF: Rs 80 lakhs
PPF: Rs 20 lakhs, with Rs 1.5 lakhs per year investment for the next five years
You have a total of Rs 185 lakhs (Rs 1.85 crores) in savings and investments.

Retirement Goals and Planning
You aim to retire by 58, which gives you 16 more years to save and invest. Your goal is to have a monthly retirement income of Rs 2 lakhs. To achieve this, a well-planned investment strategy is crucial.

Assessing the Required Retirement Corpus
Given your goal of Rs 2 lakhs per month, your annual requirement will be Rs 24 lakhs. Considering a retirement period of 25-30 years, you need a substantial retirement corpus to ensure a comfortable life.

Investment Strategies to Achieve Your Retirement Goals
Diversification and Asset Allocation
Equity Investments:

Equities offer high returns over the long term, essential for building a large corpus. Consider increasing your equity exposure. Actively managed funds with a track record of strong performance can be a good choice. Avoid index funds due to their average performance in fluctuating markets.

Mutual Funds:

Increase your investments in mutual funds. Choose diversified mutual funds with a mix of large-cap, mid-cap, and small-cap funds. Actively managed funds can outperform the market, offering higher returns than passive index funds.

Debt Investments:

Maintain a balance with debt investments for stability and regular income. Your FDs and PPF fall into this category. Consider debt mutual funds for potentially higher returns than traditional FDs.

EPF and PPF:

Continue your contributions to EPF and PPF. These provide a stable and tax-efficient return. The EPF offers a good interest rate and tax benefits, making it a valuable part of your retirement planning.

Systematic Investment Plan (SIP)
Regular Investments:

Start a SIP in mutual funds to benefit from rupee cost averaging and the power of compounding. Regular investments, even in small amounts, can grow significantly over time.

Review and Adjust:

Regularly review your SIP portfolio and adjust based on performance and changing financial goals. Working with a Certified Financial Planner (CFP) can help optimize your SIP strategy.

Risk Management and Insurance
Health Insurance:

Ensure you have adequate health insurance coverage for your family. Medical emergencies can deplete your savings if not adequately insured.

Life Insurance:

Consider term life insurance to cover financial risks. It provides a high coverage amount at a lower premium, ensuring your family's financial security in case of unforeseen events.

Children's Education Planning
Education Fund:

Start an education fund for your children. Invest in child-specific mutual funds or a mix of equity and debt funds. This ensures you have sufficient funds when they pursue higher education.

Systematic Withdrawals:

Plan for systematic withdrawals from your education fund as required. This avoids sudden large expenses disrupting your financial plans.

Maximizing Tax Efficiency
Tax-efficient Investments:

Utilize tax-efficient investments like PPF, EPF, and ELSS (Equity Linked Savings Scheme) mutual funds. These offer tax benefits under Section 80C of the Income Tax Act.

Tax Planning:

Regularly review and adjust your investments to maximize tax efficiency. Consult a CFP for personalized tax planning strategies.

Regular Financial Review
Annual Review:

Conduct an annual review of your financial plan. Assess the performance of your investments, adjust for market changes, and ensure alignment with your goals.

Professional Guidance:

Work with a CFP for regular financial reviews and adjustments. Their expertise can help navigate market complexities and optimize your financial strategy.

Saving and Investing for Retirement
Building a Retirement Corpus
Target Corpus:

Based on your goal of Rs 2 lakhs per month, calculate the target retirement corpus. Considering inflation and a retirement period of 25-30 years, a substantial corpus is needed.

Investment Growth:

Invest in a mix of equity, debt, and mutual funds to grow your corpus. Equities offer high returns, while debt investments provide stability.

Withdrawal Strategy
Systematic Withdrawal Plan (SWP):

Use an SWP in mutual funds to generate regular income during retirement. This allows for periodic withdrawals while keeping the principal invested.

Bucket Strategy:

Divide your retirement corpus into different buckets based on time horizons. Short-term needs are met with liquid funds, while long-term needs are invested in equities and debt.

Future-Proofing Your Finances
Emergency Fund:

Maintain an emergency fund covering at least six months of expenses. This provides a safety net for unexpected financial challenges.

Inflation Protection:

Invest in assets that protect against inflation. Equities and inflation-indexed bonds can help maintain purchasing power over time.

Health and Longevity:

Plan for healthcare costs and longer life expectancy. Adequate health insurance and a well-funded retirement plan are crucial.


You have done an excellent job of saving and planning for your future. Your disciplined approach to managing finances is commendable. With a few adjustments and a well-planned investment strategy, you can achieve your retirement goals and secure a comfortable future for your family.

Final Insights
Financial planning for retirement requires a comprehensive approach. By diversifying investments, increasing equity exposure, and optimizing tax efficiency, you can build a substantial retirement corpus. Regular reviews and professional guidance from a Certified Financial Planner will ensure you stay on track. Your commitment to saving and investing will pay off, providing financial security and peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 30, 2025

Money
Dear Sir, My age is 48 years and I have taken house loan of Rs. 25 Lacs two years back, EMI per month is 20K, my monthly salary is 75 k. I m investing Rs. 39 k per year in LIC, 50k in PPF per year and 12500 per month in SIP. After all this investment at the end of the month I barely able of save Rs. 15K. My son age is 5 years . Please suggest any changes and further future planning so that after retirement I have atleast 1 Cr.
Ans: You have shown good discipline in managing your finances. You have started early planning for your child and your retirement. That is very good. You also have a good monthly income and manageable loan EMI. But, a few adjustments will help build stronger wealth for retirement.

Let me now help you with a step-by-step review of your current financial structure and suggest better ways for future financial well-being.

 
 
1. Income and Expense Overview

Your monthly salary is Rs. 75,000.
 
 

You are paying Rs. 20,000 as home loan EMI.
 
 

You are investing Rs. 12,500 in SIPs every month.
 
 

You are investing Rs. 50,000 per year in PPF. That is around Rs. 4,167 per month.
 
 

You are paying Rs. 39,000 per year in LIC premium. That is around Rs. 3,250 per month.
 
 

After all expenses and investments, you save around Rs. 15,000 per month.
 
 

Your savings habit is strong. That is a great quality. But now, you need to optimise your savings and investments better.

 
 
2. Home Loan Management

Rs. 25 lakhs loan is manageable with your income.
 
 

Rs. 20,000 EMI is reasonable. But loan closure before retirement is important.
 
 

Aim to close the loan by 58 years. That will reduce stress after retirement.
 
 

If you receive any bonus or surplus, use that partly to reduce loan.
 
 

But do not stop SIPs or long-term investments for loan prepayment.
 
 

Balance is important.
 
 
3. LIC Policy Assessment

You are paying Rs. 39,000 yearly in LIC.
 
 

Most likely, this is a traditional endowment or money-back policy.
 
 

Such plans give very low returns. Usually below 5% per year.
 
 

Also, mixing insurance with investment is not ideal.
 
 

What to do now?

If the policy has completed more than 3 years, check surrender value.
 
 

If surrender is financially suitable, stop and reinvest in mutual funds.
 
 

Take pure term insurance separately if not already taken.
 
 

Term plans give large cover at low cost.
 
 

This one change will free up funds and give better returns.
 
 
4. PPF Investment Review

You are investing Rs. 50,000 per year in PPF.
 
 

PPF is safe and gives tax-free returns.
 
 

Current interest is around 7% to 7.5% per annum.
 
 

But this return may not beat inflation over 15–20 years.
 
 

Still, PPF is good for safety and diversification.
 
 

Continue PPF, but do not increase allocation too much.
 
 

Keep PPF limited. Focus more on higher return options.
 
 
5. SIP Investment Strategy

You are investing Rs. 12,500 per month in SIPs.
 
 

SIP in mutual funds is one of the best long-term tools.
 
 

Ensure you are investing in diversified, actively managed funds.
 
 

Actively managed funds give better returns over long term.
 
 

Avoid index funds. They copy the market and don’t beat inflation strongly.
 
 

Avoid direct funds unless you are experienced and review portfolios often.
 
 

Regular plans through a Mutual Fund Distributor with CFP support are better.
 
 

You get proper guidance, rebalancing, and tracking.
 
 

SIP should be your main engine for wealth building.
 
 
6. Retirement Goal Planning

You want Rs. 1 crore at retirement. That is a good starting goal.
 
 

At age 48 now, you have around 12 years left to build this.
 
 

You are already investing in SIP and PPF.
 
 

After surrendering LIC, redirect that amount into mutual funds.
 
 

Even your current Rs. 12,500 SIP + Rs. 3,250 LIC (if re-directed) = Rs. 15,750.
 
 

This amount, if invested in equity mutual funds, can create strong growth.
 
 

Also, your savings of Rs. 15,000/month is available.
 
 

Use part of this savings also to boost your SIP.
 
 

Retirement goal can be achieved. Just need disciplined investing and small adjustments.
 
 
7. Child’s Education Planning

Your son is 5 years old. You have time to build corpus.
 
 

Higher education expenses will start after 13–15 years.
 
 

Create a separate SIP for this goal. Do not mix with other investments.
 
 

Invest in diversified equity mutual funds for child goal.
 
 

Even Rs. 5,000–7,000/month SIP can build good corpus by then.
 
 

Review the portfolio every year with your Certified Financial Planner.
 
 

Do not depend on insurance plans or ULIPs for child goals.
 
 

They give poor returns and lock your money for long.
 
 

8. Insurance Protection Plan

At 48, insurance is critical. You are the family’s main earning member.
 
 

Take pure term insurance of minimum 10–12 times your yearly income.
 
 

That is Rs. 75,000 × 12 × 10 = Rs. 90 lakhs at least.
 
 

Premium will be low if taken soon.
 
 

Do not mix insurance with investment.
 
 

Also take health insurance for family if not already covered.
 
 

Company cover is not enough. Take personal health policy also.
 
 

9. Tax Planning and Optimisation

You are using LIC and PPF for tax benefits.
 
 

Also SIPs in ELSS funds can give tax benefits.
 
 

Consider ELSS only if you need 80C limit and can take 3-year lock-in.
 
 

Do not over-focus on tax saving. Wealth creation is more important.
 
 

If your 80C is already full, invest in non-tax saving mutual funds.
 
 

SIPs in equity mutual funds held for more than one year will attract LTCG.
 
 

LTCG above Rs. 1.25 lakh is taxed at 12.5%.
 
 

Keep track of capital gains yearly. Use your limit smartly.
 
 

10. Emergency Fund Management

Keep at least 4 to 6 months of expenses in emergency fund.
 
 

Use liquid mutual funds or savings account for this.
 
 

Do not invest emergency funds in PPF or SIP.
 
 

You should be able to withdraw anytime when needed.
 
 

Use your Rs. 15,000 monthly saving to slowly build this buffer.
 
 

11. Key Adjustments You Can Make Now

Surrender low-return LIC policy if suitable.
 
 

Redirect Rs. 3,250/month to mutual funds.
 
 

Increase SIP by at least Rs. 5,000 more monthly using your surplus.
 
 

Start a child education SIP separately.
 
 

Build emergency fund of Rs. 3 to 4 lakhs gradually.
 
 

Do not increase EMI. Prioritise investment and loan closure balance.
 
 

Finally

You have already done many things right. That is a great starting point.

Just fine-tune your investment structure now. Shift from low-return products to higher growth investments. Don’t stop your SIPs. Keep increasing SIP as income rises.

Work with a Certified Financial Planner. Review your plan every year. This is not a one-time setup. Financial planning is a regular process.

With the right steps, Rs. 1 crore for retirement is very much possible. Also, your child’s education will be secure. Just stay consistent and focused.

 
 
Best Regards,
 
K. Ramalingam, MBA, CFP,
 
Chief Financial Planner,
 
www.holisticinvestment.in
 
https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Money
Hello Sir/Mam. I have a question related to investment in equity mutual fund.My wife and I both comes under zero percent tax bracket but we both do job and there is chance that in future we both can come in tax slab. I want to invest in equity mutual fund for long term around 18 years or more.there is long term capital gain tax applicable on these fund on redemption.does there is any saving of tax if I invest in these mutual fund on my mom or dad names because they will always remain in 0 percent tax slab?
Ans: It shows your care for long-term wealth creation. You are considering legal ways to reduce tax outgo on mutual fund investments. That is a good initiative. But this kind of decision needs to be taken only after checking all angles. Let’s analyse your situation with full clarity and depth.

Your Objective Is Clear and Appreciated

You plan to invest in equity mutual funds.

Your goal is to invest for 18 years or more.

You and your wife are working now.

Currently in the 0% income tax slab.

In future, you may enter taxable slabs.

You want to know if investing in your parents’ names helps save capital gain tax.

It is thoughtful that you want to plan for future tax impact today.
That foresight is good and appreciated.

Let’s now analyse the idea of investing in parents’ names from all angles.

Capital Gains Tax Rules for Equity Mutual Funds

You mentioned correctly about capital gain tax on equity mutual funds.

Here’s how tax works now:

If you redeem after one year, it is called Long Term Capital Gain.

LTCG above Rs.1.25 lakh in a financial year is taxed at 12.5%.

Short Term Capital Gains (sold within one year) are taxed at 20%.

This tax is applied only on profits, not on total amount withdrawn.
So yes, tax saving is possible if you plan redemptions wisely.

Will Investing in Parents’ Name Help Save Tax?

At first glance, yes, investing in parents’ names may help reduce tax.
Because your parents are always expected to be in 0% tax bracket.

But we must not see only one side.
Let’s assess other angles also.

Benefits If Done Properly

If fund is held in your parent's name, then capital gain tax is calculated for them.

If they are below taxable slab, and LTCG is below Rs.1.25 lakh, no tax is payable.

Even above that, tax may be saved by spreading redemptions.

So yes, technically, this can help reduce tax legally.

But this only works if you follow all rules and documentation carefully.

Risk of Clubbing Provisions

Income tax law has a rule called “Clubbing of Income”.
This applies when you gift money to someone but control remains with you.

In your case, if:

You invest in mutual fund in your mother or father’s name,

But you keep control and benefit from that investment,

Then income tax department can “club” the income in your hands.

So capital gain will be added to your taxable income.
Then your tax saving plan may fail completely.

However, clubbing does not apply when you gift money to parents.
It applies only when gifting to spouse or minor child.

So in your case, clubbing of income will not apply if gifted to parents.
That gives one green signal to this idea.

But still, only gifting is not enough. More care is needed.

Ownership and Control Must Match

Even if clubbing does not apply, ensure these conditions:

Money should be gifted clearly to your parent.

Gift deed can be done, even if not registered.

The mutual fund folio should be in their name.

They must be primary and only holder of folio.

PAN, bank account, KYC should be in their name.

All transactions and redemptions should go through their bank account.

They should be aware of the investment.

If all these are followed, then the ownership is clean.
Then capital gain will be taxed in their hands.
That way, your tax-saving strategy will be strong and correct.

Practical Challenges You Must Understand

Though tax saving is possible, there are some practical challenges:

If your parents are not financially savvy, they may not track the fund properly.

You may need to support them in documentation, signatures, redemptions.

If any emergency occurs, you may face delay in accessing funds.

If something happens to them, the investment will be part of their estate.

Then legal process like transmission and succession will be needed.

Joint holders can help but should be structured properly.

If too much amount is kept in parent’s name, later family disputes may arise.

So even if it helps save tax, execution must be very careful.
Legal clarity and paperwork must be perfect.

Compare Tax Saving vs. Operational Simplicity

You are trying to save 12.5% LTCG tax on long-term gains.
That tax is only on the gain amount, and only above Rs.1.25 lakh.

For example:

If capital gain is Rs.2 lakh, only Rs.75,000 is taxed.

Tax on that is Rs.9,375 only.

Now, compare this small saving with:

Effort of creating separate folio

Managing another PAN and KYC

Following proper gifting route

Tracking tax filing in parent’s name

Managing fund if parent is not tech-friendly

Handling succession if parent passes away

In many cases, the extra effort may not be worth the tax saved.

So you must balance tax saving with ease of control and operation.

Should You Transfer Future SIPs Also to Parents’ Name?

If you plan to invest SIPs for next 18 years, you may think to start those in parent’s name too.

But this brings added complication:

Their age is increasing. Health risks may affect operations.

You may lose easy access to your own long-term money.

Goal ownership gets diluted.

You may not feel emotionally safe in using the funds later.

Tax rates and laws may change in future.

They may also come under taxable income due to FD or other income.

So yes, technically, it is possible.
But it is not always the best path.

A Better Tax Planning Strategy for You

Instead of shifting everything to parent’s name, you can:

Keep investing in your and your wife’s name.

Split investments equally to use both Rs.1.25 lakh LTCG exemption.

Plan redemptions properly over years.

Avoid redeeming large amount in one financial year.

Use goal-linked withdrawals, not random redemption.

Track performance and capital gain in each folio.

Consult Certified Financial Planner to plan exit well.

That way, you stay in full control.
And still reduce long-term tax impact efficiently.

If You Still Want to Invest in Parents’ Name

Then follow these points carefully:

Make a clear gift to parent through cheque or NEFT

Use their PAN and Aadhaar for KYC

Open mutual fund folio in their sole name

Use their email and phone for communication

Bank account should be in their name only

Make them nominee-wise clear

Create Will or succession plan for legal clarity

Keep transaction record of gift amount

By doing this, you build strong documentation.
And avoid future tax queries or disputes.

Don’t Forget About Behavioural Discipline

If you keep investing in your own name, you track it more seriously.
You take responsibility for growth, goals and review.
Parents may not be emotionally connected to the fund’s long-term goals.
They may redeem early or withdraw on someone’s suggestion.
This breaks your compounding journey.

So, sometimes paying a little tax is better than losing long-term focus.

Also, with a Certified Financial Planner, you can design a low-tax withdrawal plan.
No need to shift ownership to parents just for saving tax.

Final Insights

Tax planning should be part of investment planning.
But it should not drive all decisions alone.
Saving Rs.10,000 tax but losing peace of mind is not smart.
Your idea is right. But execution needs full care.

If you decide to invest in parent’s name, follow gifting route properly.
And maintain clarity in ownership and operations.

But for most cases, staying in control and planning exits well works better.
You and your wife can easily enjoy Rs.2.5 lakh combined LTCG exemption every year.
That itself gives huge tax-free withdrawal potential.

Also, tax rules change every 3–5 years.
So keep reviewing your strategy with your Certified Financial Planner.

Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 2025

Asked by Anonymous - Jun 29, 2025Hindi
Money
I am 34 year old male earning 80k per month .home loan emi 20k..ssy for my 3 year old daughter monthly 10k... investing in ppf monthly 10k...sip 2.5k monthly..nps 3.5 k monthly gold etf 3k monthly.. outstanding home loan amount 14lakhs...now I have lumpsum of 5laks is it wise decision to partly pay my home loan or to invest in mutual fund to create wealth...next question the investments I am making today is enough to secure my daughter future for her studies and marriage or do I need to change anything pls guide on that ...I also have a term insurance
Ans: You are already making disciplined efforts.
Now let’s look at your situation from all angles.

Your Current Investment Snapshot
Salary: Rs 80,000 per month

Home Loan EMI: Rs 20,000

SSY: Rs 10,000 monthly for daughter

PPF: Rs 10,000 monthly

NPS: Rs 3,500 monthly

SIP (Mutual Funds): Rs 2,500 monthly

Gold ETF: Rs 3,000 monthly

Term Insurance: Already in place

Lump sum: Rs 5 lakh in hand

Home Loan Outstanding: Rs 14 lakh

You are saving around Rs 29,000 each month outside of EMI.
This is a solid start.

Should You Part Pay Your Home Loan?
Pros of part prepayment now:

You save a lot of interest over time

You reduce your EMI burden for future

It brings peace of mind and security

Good if job stability is uncertain

Cons of part prepayment now:

You lose opportunity to earn better returns

You reduce liquidity buffer in hand

You miss compounding benefit of mutual funds

Now, the rate of home loan is around 8–9%.
Good mutual funds can give better long-term returns than this.

But you don’t have an emergency fund right now.
That is more important than prepaying loans or investing.

What You Should Do With the Rs 5 Lakhs
Split the amount into 3 purposes:

1. Emergency fund: Keep Rs 1.5 lakhs in savings account or FD

This gives peace during job loss or medical emergency

Use only during true need

2. Mutual fund investment: Use Rs 2.5 lakhs for long-term growth

Choose actively managed equity mutual funds

Avoid index funds and ETFs

Index funds copy the market.

They don’t protect during market crash.

Actively managed funds are guided by experts.

These adapt to market changes quickly.

3. Loan prepayment: Pay Rs 1 lakh to reduce principal

Ask bank to apply it toward principal

This lowers your interest burden

It also shortens tenure quietly

This split will give you balance between safety and growth.

Is Your Current Investment Enough for Daughter?
SSY Rs 10,000 monthly is a strong start.
This will mature when she turns 21.
Use this only for marriage or backup.

But for education, add mutual funds.

Higher education costs will go up

Abroad studies may cost Rs 50–80 lakhs

SSY is not enough alone

Add SIPs for education goal

Increase SIP gradually to Rs 5,000–6,000 per month.
Invest through MFD with CFP certification only.
Don’t go for direct plans.
Direct funds seem cheap, but offer no personalised advice.
You miss rebalancing and asset allocation help.

Regular funds with MFD offer better tracking and handholding.

Your Retirement Needs and Strategy
At 34 years, you have 26 years left for retirement.
Current NPS is only Rs 3,500 per month.
You need to grow it to at least Rs 10,000 monthly over time.
Also increase PPF after SSY ends.

Mutual funds are your main wealth builders.
Don't rely on Gold ETF alone.
Gold works for protection—not growth.
Limit gold allocation to 10–15% only.

Build a retirement corpus of Rs 2–3 crore minimum.

Suggestions to Improve Further
Increase SIP every year by 10–15%

Shift lump sum to mutual funds in 3–5 instalments

Use STP (Systematic Transfer Plan) for that

Review goals once every 6 months

Track fund performance yearly with MFD help

Use FD only for emergency and short goals

Avoid ULIPs, endowment, or combo plans

Keep all insurance and investment separate.

Avoid These Mistakes
Don’t invest in direct mutual funds

Don’t use index funds blindly

Don’t invest more in gold than required

Don’t delay term insurance update when salary grows

Don’t stop SIPs during market dips

Don’t ignore inflation while planning daughter’s future

Discipline + Review = True Growth

Final Insights
You are doing great for your age and income.
Your habits are already strong.
Now add clarity, balance, and regular review.

Keep 3 goals separate:

Daughter's education (SIP + MF only)

Daughter’s marriage (SSY can be used)

Your retirement (NPS + MF + PPF)

Don’t mix goals and investments.
Grow SIPs as salary increases.
Keep emergency fund always ready.
Review with a certified financial planner every year.

Rs 5 lakhs should be used wisely—part for safety, part for growth.
That’s how wealth is built and family protected.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Money
Sir, want to make a lumpsum investment around 10 lakhs.My aim to have atleast 18-22%XIRR in coming 15-20 yrs.which funds with having low nav , high Alpha and H ratio should I choose??
Ans: You have clearly thought through your investment expectations. It is good to see that you are aiming for long-term wealth building. Now let’s analyse and guide you in detail with a 360-degree approach.

Clarity on Your Investment Objective

You have Rs.10 lakh to invest as lump sum.

Your goal is 18–22% XIRR over 15–20 years.

You are seeking low NAV funds with high alpha and high Sharpe Ratio.

The desire for strong long-term returns is absolutely fair.
However, the expectations of 18–22% XIRR consistently over two decades need thoughtful evaluation.

Understanding Long-Term Equity Return Expectations

Historically, good equity funds give 12–15% XIRR over long-term.

18–22% range is aggressive and may not be consistent.

Equity markets are volatile. They need time and patience.

Over 15–20 years, compounding works well.
But expecting 18–22% every year may lead to disappointment.
It is better to expect 12–15% XIRR. Anything above that is bonus.

The Truth About Low NAV Funds

Many investors think low NAV means cheap or better value.

But NAV is not like share price.

NAV shows fund’s per unit value. That’s it.

A fund with Rs.10 NAV is not cheaper than one with Rs.200 NAV.
What matters is how the fund grows, not where it starts.

So, do not choose funds just based on low NAV.
Instead, focus on the fund’s performance, consistency, risk-adjusted return, and fund house strength.

What Does High Alpha and Sharpe Ratio Mean

High alpha means fund is beating its benchmark well.

Sharpe ratio shows return vs. risk taken by the fund.

Higher Sharpe ratio means better risk-adjusted return.

So yes, choosing funds with high alpha and Sharpe ratio makes sense.
But they should be consistently high over 5–10 years.
One-year or short-term alpha is not reliable.

You should also see downside protection, past bear market behaviour, and fund manager continuity.

Important Factors for Fund Selection

Instead of chasing only metrics, look at:

Long-term performance: minimum 7–10 years history

Rolling returns: consistency over time, not point-to-point

Fund manager’s experience and track record

Sector diversification and portfolio quality

Volatility and risk control ability of the fund

A fund with lower return but stable and consistent is better than a risky high return fund.

Why Not Index Funds

Some investors suggest index funds due to low cost.
But index funds just copy the index. They don’t beat the market.

Disadvantages of index funds:

No downside protection in falling markets

Returns only match the index, never exceed

Blind allocation to sectors and stocks

Not suitable if you seek 18–22% XIRR

In contrast, actively managed funds aim to beat the index.
They adapt based on market trends, sector shifts, and economic changes.

With proper selection and regular tracking, active funds can deliver alpha.
So if your goal is high XIRR, avoid index funds.

Why Not Direct Plans

Some investors invest in direct mutual funds without guidance.
But direct funds lack personalised support, rebalancing, and review.

Disadvantages of direct funds:

No one helps track, switch, or reallocate your money

No behaviour control during market corrections

Investors may panic or make wrong decisions

Returns may suffer due to wrong timing

Instead, invest via regular plans under a Certified Financial Planner.
You get portfolio monitoring, expert guidance, and emotional support.
This helps you stay disciplined for 15–20 years.

The cost difference is worth the value added.
A small fee ensures long-term confidence and correct allocation.

Best Strategy for Your Rs.10 Lakh Lump Sum

Since you are investing a lump sum, avoid full one-shot exposure into equity.
Even though horizon is long, entering gradually is better.

Here is a better path:

Step 1: Park Rs.10 lakh in a suitable ultra short term or low duration fund

Step 2: Use STP (Systematic Transfer Plan) to move money to equity over 12–18 months

Step 3: Choose 2–3 well-diversified active equity mutual funds

Step 4: Monitor every year with a Certified Financial Planner

Step 5: Rebalance based on market cycle and fund performance

This phased entry reduces market timing risk.
Also gives better average buying cost.

Which Type of Funds to Choose

Avoid small cap or sectoral funds for lump sum.
They are volatile and need tactical allocation.

Instead, select:

Large & Mid Cap Funds

Flexi Cap Funds

Focused Equity Funds

Multi Asset Funds (for some balance)

These fund categories give:

Diversification

Good upside

Controlled downside

Flexibility for fund manager

With long-term investing, these fund styles build wealth steadily.
They also protect better during market falls.

You don’t need too many funds.
Just 2–3 high-quality ones are enough.

Things to Watch as You Invest

Always link your investment to goal, not just return.

Monitor the funds every year for consistency.

Avoid churning. Let compounding do the work.

Don’t react emotionally to short-term falls.

Stay invested fully for 15–20 years.

Avoid temptation to switch often.
Discipline and patience bring more return than constant change.

MF Tax Rules to Keep in Mind

When you exit your equity mutual funds:

If held for over 1 year:

LTCG above Rs.1.25 lakh taxed at 12.5%

If sold within 1 year:

STCG taxed at 20%

Plan your redemptions properly.
Spread withdrawals over years to save tax.
Avoid redeeming in panic.

Role of Certified Financial Planner in Long-Term Investing

To reach 18–22% return, fund selection is not enough.
You need portfolio design, rebalancing, emotional support, and tax planning.

This is where a Certified Financial Planner helps:

Suggest best funds for your profile

Plan STP for smooth entry

Review and rebalance every year

Prevent emotional exits

Track performance vs. your goal

Provide goal-based reports

A guided long-term approach works better than random investing.
Your planner acts like your investment partner.

Mistakes to Avoid

Please avoid the below traps:

Don’t invest full lump sum in equity at once

Don’t choose funds based on low NAV

Don’t focus only on return, ignore risk

Don’t pick direct funds without expert help

Don’t expect 20% yearly return every year

Don’t react to market noise

Don’t keep changing funds too often

Avoiding mistakes is as important as choosing good funds.

What You Should Do Now

Decide on your 15–20 year goal clearly

Park Rs.10 lakh in short-term fund

Start STP into 2–3 strong equity mutual funds

Choose funds with high alpha, Sharpe, and 10-year performance

Avoid index and direct plans

Invest via regular plan through Certified Financial Planner

Review every year with professional help

Stay invested for long term patiently

Expect 12–15% XIRR, not 22%

Let compounding work quietly

Finally

Your intent to invest long-term is excellent.
A Rs.10 lakh investment over 20 years can grow substantially.
Even at 12–15% XIRR, it can create good wealth.
Stay disciplined, invest right, and follow a guided path.
Choose actively managed funds, and avoid risky shortcuts.
Returns will follow when strategy is sound.

Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |9460 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 2025

Money
what should i do i have having 2 lakh debt and no source of income and not having any savings or money in my hand how i manage to pay them and no friends and other people are helping me to pay
Ans: It needs a clear and strong action plan.
Right now, your goal is simple—get stable, earn income, and repay.

Let’s look at it from all angles.

Accept the Situation Without Blame
You have Rs 2 lakh loan.

No income. No savings. No support.

This can feel heavy. But it can be handled.

You are not alone. Many have faced this and come out.

You must now focus only on practical steps.

Stop the Debt From Growing
Talk to the lender immediately.

Ask for a pause on EMI or lower interest.

Don’t delay. Hiding will worsen your situation.

If it is credit card debt, avoid minimum payments.

Ask for settlement option if needed.

Document every conversation with lender.

Try converting high interest into low EMI if possible.

No More Borrowing Anymore
Don’t borrow from anyone now.

Don’t take payday or app loans.

Don’t give in to online loan offers.

They increase your stress and risk.

Break this debt chain now.

Focus only on earning and repaying what’s due.

Start a Job or Work Immediately
Even small income is better than no income.

Start with temporary, part-time or gig work.

Choose food delivery, customer care, retail helper, warehouse, or typing jobs.

Try home tuitions, ironing services, cooking support, packaging work.

Check Swiggy, Zomato, Blinkit, UrbanClap, Taskmo, Amazon Flex.

Try YouTube channels or blogs for zero-investment side income ideas.

Any job is a good start.
From zero, even Rs 500 a day is a win.

Sell What You Can Spare
Check if you have any small gold jewellery.

Sell unwanted gadgets, phone, speakers, old laptop.

Sell furniture or clothes you don’t need.

Use Facebook Marketplace, OLX, Quickr.

Even Rs 10,000–15,000 can give relief.

Use this money to pay part of debt.
This builds lender confidence.

Join Government Free Skilling Programs
Join PMKVY (Pradhan Mantri Kaushal Vikas Yojana).

Many courses are free with placement help.

Learn data entry, tailoring, mobile repair, electrician, housekeeping.

Check nearest govt ITI or District Skill Center.

One certificate can get a Rs 8K–15K/month job.
That’s enough to begin repaying.

Reduce Your Monthly Costs
Shift to very low-cost living for next 6–12 months.

Ask relatives for temporary stay if possible.

Don’t eat out. Avoid transport costs.

Use ration shops and free food centers.

Borrow clothes, avoid buying new ones.

Don’t buy on EMI or credit.

Every rupee saved helps you rebuild.

Handle Mental Pressure Calmly
Financial crisis hurts confidence.

Take daily walks. Practice deep breathing.

Write down 3 actions every morning.

Focus only on that.

Your mental health is your real asset.
Strong mind = strong comeback.

Free Help You Can Try
Approach NGOs giving emergency help.

Try Milaap, GiveIndia, Ketto for verified assistance.

Join local self-help groups.

Ask old teachers, colleagues, or ex-employers.

Even strangers can support if you ask with clarity.

Once You Earn, Follow This Plan
Start by saving Rs 500 monthly.

Keep Rs 5,000–10,000 as emergency fund.

Pay Rs 1,000–2,000 monthly to lender.

Once income stabilizes, pay faster.

After clearing debt:

Start SIPs through certified MFD only.

Never invest in direct mutual funds.

Don’t use index funds or ETFs.

Actively managed mutual funds give better results.

Use regular funds with MFD advice.

Invest for future—not under panic.

Don’t Invest in ULIPs or Policies
If someone sells you insurance + investment plan, avoid it.

They are high-cost and give low returns.

No LIC, ULIP, or endowment for now.

Just focus on savings and mutual fund SIPs.

You need simple, flexible plans, not fancy products.

Don’t Fall for Quick Money Scams
Don’t try crypto or forex for quick returns.

Don’t join MLM or chain business schemes.

Don’t pay anyone who promises fast loan approval.

Anything that looks magical will take your money away.

Final Insights
You are strong for asking for help.

Many fear to face it. You are not hiding.

Your comeback will begin with action—not emotion.

Today is your first day of financial rebuilding.

You will repay the Rs 2 lakh. Slowly but surely.

You will build Rs 5 lakh in next 3–5 years.

And more after that.

Keep this plan close. Follow it daily.
You will rise again—step by step.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Nayagam P

Nayagam P P  |8247 Answers  |Ask -

Career Counsellor - Answered on Jul 08, 2025

Asked by Anonymous - Jul 08, 2025Hindi
Career
Sir,I am getting spit ece and dj sanghvi cse.Which will be the best option for me?.In both the colleges I am getting tfws seat through mhtcet
Ans: Both Sardar Patel Institute of Technology's Electronics & Communication Engineering and DJ Sanghvi College of Engineering's Computer Science & Engineering are offered at NAAC-accredited institutions with strong infrastructure, qualified faculty, industry-linked internships and dedicated placement cells. SPIT Mumbai's ECE program benefits from autonomous status, advanced VLSI and communication labs, mandatory six-month internships and achieved an 82–95% placement consistency over three years. DJ Sanghvi's CSE program holds NAAC A-grade accreditation, features specialized AI/ML and software development labs, semester-long internships and recorded a 96% CSE placement rate with an average package of ?10.78 LPA in 2023-24. Both institutions offer TFWS seats for eligible Maharashtra state candidates with family income below ?8 lakh, providing complete tuition fee waiver throughout the four-year duration. The scheme reserves 5% of total sanctioned seats as supernumerary seats, ensuring cost-effective quality education.

recommendation
For superior software development opportunities and higher placement consistency, recommendation is DJ Sanghvi CSE under TFWS. If specialized electronics and communication training with strong hardware industry exposure appeals more, choose SPIT ECE under TFWS. Both options provide excellent value through the tuition fee waiver scheme. All the BEST for Admission & a Prosperous Future!

Follow RediffGURUS to Know More on 'Careers | Money | Health | Relationships'.

...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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x