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Ramalingam

Ramalingam Kalirajan  |4998 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 06, 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
Saurav Question by Saurav on Jun 27, 2024Hindi
Money

My age is 49 , my wife's age is 44 and daughters age is 16 years I have taken a 15 L health insurance family floater policy from New India assurance 4 years back where the bonus accumulated is 7.5 L hence total coverage is now 22.5 L. I am paying premium of 37 K now for this. I was keen on public sector insurer as I came across lot of complaints with private sector insurers. We don't have any health issue except my wife have have family history of heart problem and cancer . How much more insurance coverage we need to take considering the premium is going to rise over time? Does it make sense to take critical illness or cancer policy separately.Please suggest.

Ans: Taking the right health insurance coverage is crucial, especially given the rising medical costs. With your current family floater policy of Rs. 22.5 lakhs and considering your wife's family history, it’s essential to evaluate your needs. Here’s a comprehensive guide to help you decide on additional coverage and whether a critical illness or cancer policy is necessary.

Current Health Insurance Coverage
Your existing policy has served you well, accumulating a bonus of Rs. 7.5 lakhs, increasing your coverage to Rs. 22.5 lakhs. This is a good base, especially since you’ve prioritized a public sector insurer due to concerns over private insurers.

Public sector insurers have a reputation for reliability and fewer complaints. Your choice is wise, given your specific concerns.

Assessing Your Coverage Needs
Health insurance needs can vary based on several factors, including age, family medical history, and lifestyle. Considering these factors, let's analyze your situation:

Age: At 49 and 44, you and your wife are approaching an age where medical issues become more common. Your daughter, at 16, still has a relatively low risk.

Medical History: Your wife’s family history of heart problems and cancer is a significant factor. This history increases the likelihood of needing substantial medical care in the future.

Rising Medical Costs: Medical inflation in India is high. Treatments for severe illnesses can easily exceed Rs. 20 lakhs, especially in metropolitan areas.

Given these points, it might be wise to consider additional coverage. A coverage of Rs. 30-50 lakhs could be more appropriate.

Evaluating the Need for Additional Coverage
To determine if you need more coverage, consider these aspects:

Hospitalization Costs: Major treatments and surgeries can be very expensive. Even with Rs. 22.5 lakhs coverage, a few hospitalizations could exhaust your policy limits quickly.

Treatment Advances: Medical technology is advancing, leading to higher costs for newer treatments and procedures.

Geographical Location: If you live in a metro city, medical costs are generally higher compared to smaller towns.

A top-up or super top-up policy could be a cost-effective way to increase your coverage without significantly increasing premiums. These policies kick in after a certain threshold is met, offering higher coverage at a lower cost.

Critical Illness and Cancer Policies
Given your wife's family history, a critical illness policy or a specific cancer policy could be beneficial. These policies provide a lump-sum payment on diagnosis of specific illnesses, which can be used for treatment, recovery, or even daily expenses.

Critical Illness Policy: Covers a range of severe illnesses like heart attack, stroke, kidney failure, and more. It provides financial support at a crucial time, helping to cover costs that may not be included in a regular health policy.

Cancer Policy: Specifically designed for cancer treatment. Cancer treatment can be prolonged and expensive. This policy ensures that financial constraints do not hinder the treatment process.

Benefits of Critical Illness Policies
Lump-Sum Payment: On diagnosis, you receive a lump-sum amount which can be used for any purpose, giving you flexibility.

Wide Coverage: Covers several major illnesses which can be financially draining if not insured.

Peace of Mind: Knowing you have coverage for major illnesses can reduce stress and allow you to focus on recovery.

Benefits of Cancer Policies
Specialized Coverage: Tailored specifically for cancer, ensuring comprehensive coverage for all stages of the disease.

Enhanced Support: Provides financial support for expensive treatments, ensuring quality care without worrying about costs.

Flexibility: The payout can be used for treatment or other related expenses, providing financial flexibility during tough times.

Premium Considerations
Health insurance premiums do rise with age and medical inflation. To manage premium costs while ensuring adequate coverage, consider the following strategies:

Top-Up Plans: As mentioned, these can provide high coverage at lower premiums compared to base policies.

Family Floater Plans: These can sometimes be more economical than individual plans, especially when covering multiple family members.

Regular Review: Periodically review and adjust your coverage to match your current needs and financial situation.

Practical Steps to Enhance Coverage
Assess Your Needs Regularly: Health needs change over time. Regularly assess your insurance coverage to ensure it aligns with your current and future needs.

Consider Top-Up Policies: If you find your current coverage inadequate, a top-up policy can provide additional coverage at a reasonable cost.

Evaluate Critical Illness and Cancer Policies: Given your wife's family history, these policies can provide financial security in case of serious illnesses.

Consult a Certified Financial Planner: They can provide personalized advice, ensuring your insurance strategy fits within your broader financial plan.


You’ve taken commendable steps to ensure your family's health and financial security. Your proactive approach to health insurance is admirable. It’s evident that you care deeply about your family's well-being, and you're making informed decisions to protect them.

Final Insights
Ensuring adequate health insurance coverage is crucial, especially with rising medical costs and potential health risks. Your current coverage of Rs. 22.5 lakhs is a good start, but considering additional coverage could provide more security.

A top-up policy could enhance your coverage cost-effectively. Given your wife's family history, a critical illness or cancer policy could offer additional peace of mind and financial support.

Health insurance is not just about covering hospital bills; it's about securing your financial future against unforeseen medical expenses. By carefully evaluating your needs and considering additional coverage options, you can ensure comprehensive protection for your family.

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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I am 73 (DOB 10-07-1949). I had an open heart surgery in Sept., 1999. I am taking blood thinner otherwise ok. My wife is 66 (DOB 13-09-1956). She has no problems. I have a 5L Family Floater health insurance from Oriental Insurance - Bank Saathi Policy at an annual premium of about Rs. 35,000 for self and wife. Since in these days this is not sufficient, I want another policy for 5L or Top Up for 5 / 10 L for self and wife. Please advise an honest suitable minimum cost affordable policy since I have limited capacity to pay because my life time savings in Punjab & Maharashtra co-op Bank Ltd., Mumbai, has been looted by bank Management, Senior Employees, HDIL Construction Co. (Wadwhans), RBI, Politicians and Govt. Another point. Earlier I had policies with National Insurance, New India Insurance and Oriental Insurance from my Bank tie-up but one after the other they broke the tie up with Banks and offered their direct policy raising annual premium from 11,000 to 43,000 (National Insurance) and others also on same lines because they follow dishonest business policy and just want to loot the common man. How anybody can afford such increase after 8 years with Govt. co. insurance Policy? IRDA is also on their side being dishonest. Not only private but Govt. cos. are also dishonest, corrupt and want to kill the common man.
Ans: Hi Mr RN Mitra, sorry to hear about your condition, wish you good health and recovery.

As far as the top up plan is considered, given your age and pre-existing diseases, your risk profile is high and most insurers may not be able to offer Super top up plans.

The best option is to apply for a new base plan with a higher sum insured, however the premium will be on the higher side.

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 I am an employee of central govt. PSU. My family consists of myself, spouse, two minor children and mother. I am covered by a corporate group medical insurance policy for Rs 2 lakh with an additional emergency coverage of Rs 4 lakh by the employer. I also have a personal Family Floater policy for Rs 3 lakh and a Sr. Ctzn. Policy for Rs 1 lakh. I have not used the personal policies till date for any hospitalisation claim. I am aware that a claim exceeding the corporate policy limit can be claimed in the personal policy. Recently I was made to know that any planned hospitalisation exceeding the corporate claim limit, cannot be done using the second policy. I also know that there is a product called as top up policy which can be used in such cases. I have 8 years of remaining service where there is a medical insurance cover during the period. After retirement, the employer provides a basic policy of 1.5 lakh for the family. The same feels to be insufficient in today’s times. What would be your advice with regards to the existing medical insurance policies and their amounts? Should I need to undertake any tweaking of the policy amounts or switch to a top up policy?
Ans: Hi Pradeep, yours is a legit concern. It would be best if you take advice from a professional person or company – having the necessary qualifications -- after discussing your issue with them.

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Financial Planner - Answered on Mar 14, 2024

Asked by Anonymous - Mar 13, 2024Hindi
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I am 69. I had an open-heart surgery in July 2000. I have an Oriental Insurance Co. health insurance family floater for self and wife for Rs 10 Lakh. They did not increase the amount to 15 Lalh. I am looking for only self or family floater health insurance for 10 Lakh or top up of Rs 10 lakh. Please advise if possible and to contact which Co.
Ans: Unfortunately, finding a new health insurance policy with pre-existing conditions like open-heart surgery can be challenging, especially at the age of 69. Here's why:

• Pre-existing Conditions: Most insurers are hesitant to cover pre-existing conditions, and open-heart surgery falls under that category.
• Age: As you age, premiums tend to rise, and insurers might be more cautious about taking on new senior citizens.

However, there are still some options to explore:

1. Renew Existing Policy with Oriental:

Check with Oriental Insurance Co. again regarding renewal. While they might not increase the sum insured to 15 lakh, they might still offer renewal on the existing 10 lakh plan.

2. Senior Citizen Mediclaim Plans:

Many insurers offer senior citizen health insurance plans designed for people above 60. These plans may have limitations on pre-existing conditions, but they could offer some coverage. You can explore options from reputable companies like Max Bupa, Care Health Insurance, or Cholamandalam MS. Research these companies online or consult an insurance broker for plan details.

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These plans work alongside your existing policy and provide additional coverage in case your existing sum insured gets exhausted. However, pre-existing condition exclusions might still apply. Explore top-up plans offered by your existing insurer or other companies.

4. Finding the Right Plan:

• Use online insurance comparison platforms or consult an insurance broker to compare different senior citizen mediclaim or top-up plans.
• Carefully review the policy documents, especially exclusions related to pre-existing conditions.
• Consider factors like network hospitals, co-pay clauses, and claim settlement ratio before finalising a plan.

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Ramalingam

Ramalingam Kalirajan  |4998 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 2024

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Hi I am 42 years old and am married with 2 daughters. My monthly take home is 1.8 lakhs and have an additional fixed income of 1 lakh. I need 1 lakh for monthly maintenance of my home including my car loan of 40 thousand. Can you please share me a investment plan for the future. When can I have enough investment to retire.
Ans: You are 42 years old. You are married with two daughters. Your monthly take-home pay is Rs. 1.8 lakhs. You also have a fixed income of Rs. 1 lakh. Your monthly expenses are Rs. 1 lakh, which includes a car loan of Rs. 40,000.

Assessing Your Financial Goals
To create an investment plan, we need to identify your financial goals. Key goals may include:

Children's education and marriage
Retirement planning
Paying off the car loan
Building an emergency fund
Monthly Savings and Investments
Your total income is Rs. 2.8 lakhs per month. After expenses, you have Rs. 1.8 lakhs available for savings and investments.

Investment Strategy
1. Emergency Fund:

First, ensure you have an emergency fund. This should cover 6-12 months of expenses. Set aside Rs. 6-12 lakhs for this purpose. Keep it in a liquid fund or savings account.

2. Debt Repayment:

Your car loan is Rs. 40,000 monthly. Ensure timely repayments to avoid penalties. If possible, consider pre-paying the loan to reduce interest costs.

3. Children's Education and Marriage:

Start investing in child-specific funds. Education and marriage expenses can be high. Estimate the costs and start SIPs (Systematic Investment Plans) in mutual funds.

4. Retirement Planning:

Invest systematically for retirement. Diversify your investments across:

Mutual Funds:
Choose a mix of equity and debt funds.
Actively managed funds can offer better returns than index funds.
Public Provident Fund (PPF):
Offers tax benefits and guaranteed returns.
National Pension System (NPS):
Provides an additional tax benefit and helps build a retirement corpus.
5. Monthly Investment Allocation:

Emergency Fund: Rs. 6-12 lakhs initially
Children's Education and Marriage: Rs. 40,000 per month
Retirement Planning: Rs. 1 lakh per month
Car Loan Repayment: Rs. 40,000 per month
Remaining amount can be allocated to other investment options like mutual funds or debt instruments.
Risk Management
1. Diversification:

Diversify your investments to reduce risk. Invest in a mix of equities, debt, and fixed-income instruments.

2. Insurance:

Ensure adequate insurance coverage. Health insurance and term insurance are essential. They protect your family and assets.

Tax Planning
1. Tax-efficient Investments:

Invest in tax-saving instruments. ELSS funds, PPF, and NPS offer tax benefits.

2. Tax-saving Strategies:

Utilise strategies to reduce tax liability. Plan investments to maximise tax benefits under Section 80C, 80D, and others.

Monitoring and Review
1. Regular Monitoring:

Monitor your investments regularly. Track performance and make adjustments as needed.

2. Annual Review:

Review your financial plan annually. Assess progress towards your goals. Adjust investments based on performance.

When Can You Retire?
To determine your retirement timeline, consider:

Your desired retirement corpus
Your current savings and investments
Your monthly contributions
Expected rate of return on investments
Assuming a balanced portfolio with a mix of equity and debt, you can expect an average annual return of 10-12%. Based on your current savings and investments, a rough estimate can be made. However, consulting with a Certified Financial Planner (CFP) can provide a detailed analysis and a more accurate timeline.

Final Insights
Achieving your financial goals requires disciplined planning and regular monitoring. Invest systematically, diversify your portfolio, and utilise tax-saving strategies. With careful planning and professional guidance, you can build a secure financial future and achieve your retirement goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Ramalingam Kalirajan  |4998 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 2024

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I am 35 and have a monthly income of 50000 and my savings are zero and all my commitment are cleared. I am ready to invest 12000 per month for the next 25 years. Can u please suggest how and where to invest.
Ans: At 35, with a monthly income of Rs. 50,000 and no current savings, you have a great opportunity to start building your financial future. Investing Rs. 12,000 per month over the next 25 years can help you achieve significant wealth. Here’s a detailed plan to guide your investments.

Investment Strategy
1. Diversified Portfolio:

Equity Mutual Funds: These funds have the potential for high returns over the long term.
Debt Mutual Funds: These funds provide stability and lower risk.
Gold: A small portion in gold can act as a hedge against inflation.
Fixed Deposits: While they offer lower returns, they add safety to your portfolio.
2. Systematic Investment Plan (SIP):

SIPs help in disciplined investing.
They average out market volatility over time.
Investing Rs. 12,000 monthly through SIPs will ensure regular and consistent investments.
Recommended Allocation
Equity Mutual Funds:

Allocate 60% of your investment to equity mutual funds.
This equals Rs. 7,200 per month.
Choose a mix of large-cap, mid-cap, and small-cap funds for diversification.
Debt Mutual Funds:

Allocate 20% to debt mutual funds.
This equals Rs. 2,400 per month.
These funds provide stability and reduce overall portfolio risk.
Gold:

Allocate 10% to gold.
This equals Rs. 1,200 per month.
Invest through gold bonds or gold ETFs.
Fixed Deposits:

Allocate 10% to fixed deposits.
This equals Rs. 1,200 per month.
This provides a safety net and liquidity.
Step-by-Step Plan
1. Start with Emergency Fund:

Build an emergency fund to cover 6 months of expenses.
Use your fixed deposit allocation to build this fund initially.
2. Begin SIPs:

Set up SIPs for equity mutual funds, debt mutual funds, and gold.
Automate your investments to ensure consistency.
3. Review and Adjust:

Review your portfolio every six months.
Adjust your allocations based on performance and market conditions.
4. Increase Investment Over Time:

Aim to increase your monthly investment by 5-10% annually.
This helps in countering inflation and increasing wealth.
Choosing the Right Funds
Equity Mutual Funds:

Look for funds with a consistent track record.
Choose funds managed by experienced fund managers.
Diversify across different sectors and market capitalizations.
Debt Mutual Funds:

Opt for funds with lower credit risk.
Look for funds that invest in high-quality debt instruments.
Consider funds with a good track record of stable returns.
Gold Investments:

Prefer sovereign gold bonds for better returns.
Gold ETFs offer liquidity and ease of investment.
Additional Tips
1. Tax Planning:

Utilize tax-saving mutual funds (ELSS) for tax benefits.
ELSS funds have a lock-in period of three years but offer tax deductions.
2. Financial Discipline:

Avoid withdrawing from your investments prematurely.
Stick to your investment plan regardless of market fluctuations.
3. Knowledge and Awareness:

Stay informed about market trends and financial news.
Consider consulting a Certified Financial Planner for personalized advice.
Final Insights
Starting your investment journey at 35 with a disciplined approach can yield significant returns over 25 years. Diversify your portfolio across equity, debt, gold, and fixed deposits to balance risk and reward. Regularly review and adjust your investments to stay on track with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4998 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 2024

Asked by Anonymous - Jun 13, 2024Hindi
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Hello, I want to invest 3lakh amount for a short period of 6 months. What is the best way to do it?
Ans: Short-Term Investment Options
When investing for a short period like 6 months, safety and liquidity are paramount. Here are some suitable investment options:

Fixed Deposits (FDs)
Bank Fixed Deposits:

Safety: High, as they are backed by the bank.
Interest Rate: Typically 3-5% for short-term deposits.
Liquidity: Moderate, with penalties for early withdrawal.
Post Office Time Deposits:

Safety: Very high, as they are backed by the government.
Interest Rate: Similar to bank FDs.
Liquidity: Moderate, with penalties for early withdrawal.
Liquid Mutual Funds
Description:

Safety: Moderate to high, as they invest in short-term government and corporate securities.
Returns: Typically 3-6%, higher than savings accounts.
Liquidity: High, with redemption usually processed within 24 hours.
Ultra Short-Term Debt Funds
Description:

Safety: Moderate, slightly higher risk than liquid funds.
Returns: Typically 4-7%.
Liquidity: High, but may take a few days for redemption.
Savings Accounts
High-Interest Savings Accounts:

Safety: High.
Interest Rate: Typically 3-4%.
Liquidity: Very high, with easy access to funds.
Money Market Accounts
Description:

Safety: High, as they invest in low-risk securities.
Returns: Typically 3-4%.
Liquidity: Very high, with easy access to funds.
Considerations
Risk Tolerance: Choose an option that matches your risk tolerance. For a 6-month period, lower-risk options are generally preferable.

Liquidity Needs: Ensure the investment option allows easy access to funds without significant penalties.

Returns: Look for options that offer the best returns for the risk level you're comfortable with.

Final Insights
Given your need for a short-term investment of 3 lakhs for 6 months, the following options stand out:

Liquid Mutual Funds: These offer better returns than savings accounts and have high liquidity.

Bank Fixed Deposits: Safe and offer moderate returns, but check for any penalties on early withdrawal.

High-Interest Savings Accounts: Offer easy access to funds with decent returns.

Evaluate the specifics of each option based on your preferences for risk, return, and liquidity. Consulting with a Certified Financial Planner can provide personalized advice tailored to your financial situation.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

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Ramalingam Kalirajan  |4998 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 2024

Asked by Anonymous - Jun 14, 2024Hindi
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Currently I am 54 years old & following is the corpus build till now, left job / voluntarily retired 3 months ago, need financial advise for future!!!! 1. Total 3 nos Flat owned, current market value a. Rs 2.60 Cr (out of which Rs 1.25 Cr Home loan balance OD a/c) b. Rs 1.4Cr & c. Rs 35 Lacs (currently residing) 2. Rs 90 Lacs Cash parked in OD Home loan a/c 3. Rs 90 lacs accumulated in EPF a/c, getting interest & not planning to withdraw till 58 years of retire age. 4. Receiving monthly Rent from Flat a. & b. = Rs. 1 lac + Rs 50k = Rs. 1.5 Lac/month 5. Rs 2 Lakhs in Equity 6. Term insurance - 1.25 Cr+ 1Cr = 2.25 Cr Liability:- a. Daughters education (1 year in India & 2 years Masters in Australia + Marriage b. Rs 90 lacs home loan balance as. Stated above... c. monthly Expenses - 75k Kindly suggest investment ideas to increase corpus for healthy retirement .. Thanks & Regards
Ans: Real Estate Assets
You own three flats with a total market value of Rs 4.35 crores. The first flat has a home loan balance of Rs 1.25 crores. The second and third flats have a combined market value of Rs 1.75 crores.

This is a significant asset base. The rental income from these properties is Rs 1.5 lakhs per month. This steady income is a positive aspect of your portfolio.

Cash Reserves
You have Rs 90 lakhs parked in your OD home loan account. This reduces the interest burden on your home loan. It's wise to keep this amount liquid for emergencies and short-term needs.

EPF Accumulation
Your EPF account has Rs 90 lakhs. It’s generating interest, and you plan to keep it until 58 years. This is a good strategy for tax-efficient growth.

Equity Investments
You have Rs 2 lakhs in equity investments. This is a small part of your portfolio. Equities can provide high returns but come with high risks. Diversification is essential to balance risk and return.

Insurance Coverage
You have term insurance coverage of Rs 2.25 crores. This ensures financial security for your family in case of an unfortunate event.

Liabilities and Obligations
Your primary liabilities include:

Rs 1.25 crore home loan balance.
Funding your daughter's education and marriage.
Monthly expenses of Rs 75,000.
Investment Strategy for Healthy Retirement
Debt Management
Continue using the Rs 90 lakhs in your OD account to reduce the home loan interest. Pay off the home loan faster to reduce financial stress. This will improve your cash flow.

Rental Income
Ensure your rental properties are well-maintained. This will help retain tenants and maintain rental income. Consider rental agreements for security.

Equity Investments
Increase your exposure to equity investments. Equity mutual funds can provide better returns than direct stocks. Consider large-cap and diversified equity funds. This will balance risk and returns.

Systematic Withdrawal Plan (SWP)
Start an SWP from your mutual funds after you retire fully. This will provide a steady monthly income. It’s tax-efficient and offers better returns than fixed deposits.

Emergency Fund
Keep at least 6 months of expenses as an emergency fund. This should be in a liquid and accessible form. Consider liquid mutual funds or high-interest savings accounts.

Health Insurance
Ensure you have adequate health insurance. Medical costs can be high, especially in retirement. A family floater health insurance plan is recommended.

Daughter’s Education and Marriage
Start a separate fund for your daughter’s education and marriage. Consider child-specific mutual funds. This will ensure you have enough when needed without affecting your retirement corpus.

Retirement Corpus Growth
Maximize your retirement corpus growth by investing in a mix of debt and equity funds. A balanced fund can provide a good mix of stability and growth. Regular funds with a Certified Financial Planner’s guidance can help optimize returns.

Tax Planning
Utilize tax-saving instruments to reduce your tax liability. ELSS funds can offer tax benefits under Section 80C. Plan withdrawals from your EPF and other investments to minimize tax.

Regular Reviews
Regularly review your investment portfolio. Adjust your investments based on market conditions and your financial goals. A Certified Financial Planner can help you stay on track.

Final Insights
Your current financial situation is strong. Focus on reducing liabilities, optimizing returns, and planning for your daughter’s future. Maintain adequate insurance and an emergency fund.

Consult a Certified Financial Planner for personalized advice. They can help tailor a strategy to your needs and ensure a healthy, stress-free retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4998 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 2024

Asked by Anonymous - Jun 14, 2024Hindi
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I am 36 yrs Old with saving of 80 lac and can invest 1.5 lac everymonth. I want to retire at 45 and pursue my habby. I don't enjoy working and have been largely unsatisfied with my Job. My monthly expenses is 35K and have no Debt. Is it possible to accumulate a corpus of 5-6 cr in the next 9-10 years
Ans: Your savings are Rs. 80 lakh. You can invest Rs. 1.5 lakh every month. You aim to retire at 45. Your current age is 36. Your monthly expenses are Rs. 35,000. You have no debt. Let's evaluate your goals and create a plan.

Assessing Retirement Goals
Your target corpus is Rs. 5-6 crore in 9-10 years. This is achievable with disciplined planning. Consistent investments and strategic asset allocation are key.

Investment Strategy
1. Monthly Investments:

Invest Rs. 1.5 lakh monthly. Diversify across asset classes. Consider a mix of mutual funds and other investment options.

2. Mutual Funds:

Actively managed funds can outperform index funds. They offer better potential returns. Choose funds with a strong track record.

3. Equity Investments:

Equities can offer high returns over the long term. Diversify your portfolio. Balance between large-cap, mid-cap, and small-cap stocks.

4. Debt Instruments:

Include debt funds for stability. They offer lower risk compared to equities. They provide steady returns.

5. Fixed Deposits:

FDs offer guaranteed returns. They are low-risk investments. Include them in your portfolio for stability.

6. Balanced Allocation:

Maintain a balanced allocation. Adjust based on market conditions. Review and rebalance your portfolio regularly.

Risk Management
1. Diversification:

Spread your investments. Reduce risk by diversifying. Don’t put all your money in one asset class.

2. Emergency Fund:

Maintain an emergency fund. It should cover 6-12 months of expenses. This provides financial security.

3. Insurance:

Ensure you have adequate insurance. Health and term insurance are essential. They protect your family and assets.

Tax Planning
1. Tax-efficient Investments:

Choose tax-saving instruments. ELSS funds can offer tax benefits. They also provide potential growth.

2. Tax-saving Strategies:

Use strategies to reduce tax liability. Invest in options under Section 80C. Plan investments to maximise tax benefits.

Monitoring and Review
1. Regular Monitoring:

Monitor your investments regularly. Track performance. Make adjustments as needed.

2. Annual Review:

Review your financial plan annually. Assess progress towards your goal. Adjust investments based on performance.

Benefits of a Certified Financial Planner
1. Expertise:

A Certified Financial Planner (CFP) offers expertise. They provide professional advice tailored to your goals.

2. Guidance:

A CFP guides you through complex financial decisions. They help optimise your investment strategy.

3. Monitoring:

A CFP monitors your investments. They make adjustments to align with your goals.

4. Support:

A CFP offers ongoing support. They help you stay on track. They provide peace of mind.

Final Insights
Achieving a corpus of Rs. 5-6 crore in 9-10 years is possible. Consistent investments, diversification, and strategic planning are key. Regular monitoring and professional guidance will help you reach your goal.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4998 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 2024

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Age 42 years currently draw 30 lac per annum have Sip in mutual fund 30000 month Shares sip 20000 month Gold sip 5000 month Current portfolio Mutual fund 30lac Shared 20 lac Gold bond 2 lac Fd 3lac Family of 4 and 2 kids 1 in 5th and other in kg Current expenses are 75000 and Want 1.5 lac per month post retirement at 55 years How to invest further
Ans: Current Financial Overview
You have a robust portfolio and consistent investments. Your annual income is Rs. 30 lakh, and your expenses are Rs. 75,000 per month. You are investing Rs. 30,000 in mutual fund SIPs, Rs. 20,000 in shares SIPs, and Rs. 5,000 in gold SIPs each month. Your portfolio includes Rs. 30 lakh in mutual funds, Rs. 20 lakh in shares, Rs. 2 lakh in gold bonds, and Rs. 3 lakh in fixed deposits.

Your goal is to retire at 55 with a monthly income of Rs. 1.5 lakh. Let's evaluate and plan for this goal.

Evaluating Current Investments
Mutual Funds:

You have Rs. 30 lakh in mutual funds.
Investing Rs. 30,000 per month in SIPs.
Mutual funds provide good returns over the long term.
Shares:

You have Rs. 20 lakh in shares.
Investing Rs. 20,000 per month in SIPs.
Shares can be volatile but offer high returns.
Gold:

You have Rs. 2 lakh in gold bonds.
Investing Rs. 5,000 per month in SIPs.
Gold is a safe investment but grows slowly.
Fixed Deposits:

You have Rs. 3 lakh in FDs.
FDs provide safety but lower returns.
Investment Strategy Moving Forward
Increase Mutual Fund Investments:

Mutual funds offer diversification and professional management.
Consider increasing your SIP in mutual funds for long-term growth.
Review Share Investments:

Ensure your share investments are in well-researched companies.
Regularly review and adjust your share portfolio for better returns.
Gold Investments:

Gold adds stability but has lower growth.
Keep your gold SIP but focus more on mutual funds and shares.
Fixed Deposits:

FDs are safe but offer low returns.
Limit your FD exposure and invest more in higher-return assets.
Planning for Retirement
Set Clear Goals:

Your target is Rs. 1.5 lakh per month post-retirement.
Break down this goal into smaller, achievable milestones.
Regular Review:

Review your portfolio every six months.
Adjust based on market conditions and personal goals.
Diversify Your Portfolio:

Continue diversifying across asset classes.
Balance risk and return according to your risk tolerance.
Emergency Fund:

Maintain an emergency fund for unexpected expenses.
Ensure this fund covers at least 6-12 months of expenses.
Insurance and Contingency:

Have adequate health and life insurance.
Review your policies to ensure sufficient coverage.
Education and Child Planning
Child Education Fund:

Start investing in a dedicated fund for your children’s education.
Consider child-specific mutual funds or balanced funds.
Systematic Withdrawal Plans:

Post-retirement, consider SWPs for regular income.
SWPs from mutual funds can provide tax-efficient regular income.
Final Insights
Your current investments are commendable. You have a diversified portfolio and a clear retirement goal.

To achieve your target, consider increasing your investments in mutual funds and shares. Review your portfolio regularly and adjust based on market conditions.

Ensure you have a robust emergency fund and adequate insurance coverage. Start a dedicated fund for your children’s education.

This balanced approach will help you achieve financial independence and a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4998 Answers  |Ask -

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

Asked by Anonymous - Jul 14, 2024Hindi
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Is unrated safe to invest Sbi advantage Icici pru opportunities????
Ans: Unrated funds, like SBI Balanced Advantage and ICICI Pru Opportunities, lack official ratings from agencies. This doesn't necessarily mean they are bad options. It simply means they haven't been evaluated by rating agencies yet. This could be due to the funds being relatively new or less popular.

Risks and Considerations
Higher Risk
Unrated funds come with higher uncertainty. They do not have a track record to assess their performance and risk profile. This makes it challenging to predict their future performance.

Potential Rewards
Despite the higher risk, unrated funds can offer potential rewards. New funds often aim to attract investors by performing well initially. However, this is not guaranteed and requires careful consideration.

Investing in Funds with Better Track Records
Proven Performance
It is advisable to invest in funds with a proven track record. These funds have historical data showing how they perform in different market conditions. This provides more confidence in their future performance.

Stability and Reliability
Funds with better track records have demonstrated their ability to manage market volatility. They offer more stability and reliability, which is crucial for long-term investment goals.

Active vs. Index Funds
Benefits of Actively Managed Funds
Actively managed funds can outperform the market. Skilled fund managers make strategic decisions based on market conditions. This can lead to higher returns, especially in volatile markets.

Regular vs. Direct Funds
Advantages of Regular Funds
Investing through a Certified Financial Planner (CFP) provides professional guidance. CFPs help with fund selection and portfolio management. This ensures your investments align with your financial goals.

Final Insights
Investing in unrated funds like SBI Balanced Advantage and ICICI Pru Opportunities carries higher risk due to the lack of track record. It is generally safer to invest in funds with proven performance and a stable track record. Consulting with a Certified Financial Planner can help you make informed decisions and build a diversified portfolio.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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