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Ramalingam

Ramalingam Kalirajan  |8365 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 01, 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
Surender Question by Surender on Jul 01, 2024Hindi
Money

Dear sir, My age is 53 years and my current per month salary is 1.35 L. I have 26 lakh in FDs and 4.5 lakh in Axis Bank Mutual fund. No home loan and No other liability. Daughter got married and my son is working independently. I will also get around 22 lakhs in 2026 when my LIC policies will mature. I can invest upto 25-30k per month in mutual fund. Please advise the suitable MF for investment

Ans: First off, congratulations on achieving financial stability! Your daughter is married, your son is independent, and you have no liabilities. This puts you in a great position to focus on your investments. At 53, with a current monthly salary of Rs. 1.35 lakh, you have a solid foundation. Additionally, you have Rs. 26 lakh in fixed deposits (FDs), Rs. 4.5 lakh in Axis Bank Mutual Funds, and a substantial Rs. 22 lakh coming from maturing LIC policies in 2026. You also plan to invest Rs. 25-30k per month in mutual funds. Let’s create a plan to maximize your returns.

Evaluating Your Current Investments
Fixed Deposits (FDs)
Your Rs. 26 lakh in FDs is a secure investment, providing steady returns. However, FDs often offer lower returns compared to other investment options like mutual funds. It's wise to keep a portion in FDs for safety, but diversifying into mutual funds can provide higher growth.

Axis Bank Mutual Funds
Your existing Rs. 4.5 lakh in Axis Bank Mutual Funds is a good start. Mutual funds offer the benefit of professional management and diversification. Let’s build on this foundation with a diversified mutual fund portfolio.

LIC Policies
Your LIC policies maturing in 2026 will provide Rs. 22 lakh. LIC policies often give lower returns compared to mutual funds. Once matured, we can reinvest this amount into mutual funds for better returns.

Setting Clear Financial Goals
It’s essential to establish your financial goals. Given your age, let’s focus on creating a retirement corpus, ensuring you have enough to sustain a comfortable lifestyle post-retirement. With no major liabilities and children settled, your primary goal can be wealth creation and retirement planning.

Creating a Diversified Mutual Fund Portfolio
Types of Mutual Funds
Equity Mutual Funds
Equity mutual funds invest in stocks and have the potential for high returns. They are suitable for long-term investments. Given your age, a portion of your monthly investment can be allocated here for growth.

Debt Mutual Funds
Debt mutual funds invest in fixed-income securities like bonds and government securities. They provide stable returns and are less volatile than equity funds. This is ideal for a conservative portion of your portfolio.

Hybrid Mutual Funds
Hybrid mutual funds invest in a mix of equity and debt. They offer balanced risk and returns, making them suitable for moderate risk-takers. A mix of hybrid funds can provide stability and growth.

Systematic Investment Plan (SIP)
Investing Rs. 25-30k per month through SIPs in mutual funds is a disciplined approach. SIPs help in averaging out the cost of investment and benefit from the power of compounding. Here’s how you can allocate your monthly investment:

Equity Funds Allocation
Allocate Rs. 10-15k per month in diversified equity mutual funds. Choose funds with a good track record and consistent performance. Actively managed funds can offer better returns than index funds due to professional management.

Debt Funds Allocation
Allocate Rs. 5-10k per month in debt mutual funds. These funds provide stability and are less risky. They are ideal for preserving capital and generating steady returns.

Hybrid Funds Allocation
Allocate Rs. 5-10k per month in hybrid mutual funds. These funds offer a balanced approach, providing exposure to both equity and debt. They are suitable for moderate risk tolerance.

Benefits of Professional Guidance
Certified Financial Planner (CFP)
A Certified Financial Planner can help tailor your investments to your specific goals and risk tolerance. They bring expertise in selecting the right funds and creating a balanced portfolio. Consulting a CFP ensures your investments are professionally managed.

Personalized Advice
CFPs provide personalized advice, considering your financial situation and goals. They help in selecting funds with good track records, ensuring your investments align with your risk profile and financial objectives.

Avoiding Common Pitfalls
High-Risk Investments
Avoid high-risk investments like direct stocks or speculative ventures. These can offer high returns but come with significant risks. Given your goal of wealth creation and retirement planning, a balanced approach is safer.

Index Funds
Index funds simply mimic market indices. While they have lower management fees, actively managed funds can provide higher returns through expert management. Professional fund managers can make strategic decisions to outperform the market.

Direct Mutual Funds
Direct mutual funds may seem attractive due to lower costs. However, investing through a CFP ensures professional guidance. This maximizes your returns and aligns your investments with your financial goals.

Building Your Retirement Corpus
Projecting Future Needs
Estimate your post-retirement expenses to determine the corpus needed. Consider factors like inflation, healthcare, and lifestyle changes. This helps in setting a clear target for your retirement savings.

Regular Reviews
Regularly review your investment portfolio to ensure it stays on track. Market conditions change, and so should your investment strategy. Consult your CFP to make necessary adjustments based on performance and goals.

Reinvesting Maturing Funds
When your LIC policies mature in 2026, reinvest the Rs. 22 lakh in mutual funds. This will significantly boost your retirement corpus. Choose a mix of equity, debt, and hybrid funds to balance risk and returns.

Benefits of Mutual Funds
Professional Management
Mutual funds are managed by professional fund managers. They have the expertise to select the best stocks and bonds, ensuring optimal returns. This professional management is crucial for maximizing your investments.

Diversification
Mutual funds offer diversification, spreading your investment across various assets. This reduces risk and ensures stability. A diversified portfolio is key to balanced growth and risk management.

Compounding Returns
Investing in mutual funds through SIPs leverages the power of compounding. The returns earned are reinvested, generating further returns. This significantly boosts your investment growth over time.

Financial Discipline
Budgeting
Create a monthly budget to track your income and expenses. This helps in identifying areas where you can cut costs and allocate more towards investments. Financial discipline is key to achieving your goals.

Emergency Fund
Maintain an emergency fund to cover unforeseen expenses. This prevents you from dipping into your investments. An emergency fund ensures financial stability and peace of mind.

Avoiding Unnecessary Expenses
Limit unnecessary expenses and focus on essential spending. This ensures more funds are available for investments, accelerating your wealth creation and retirement planning.

Staying Informed
Regular Updates
Stay informed about your investments by regularly checking their performance. Use financial news, market analysis, and updates from your CFP to make informed decisions. Knowledge is power in managing your investments.

Continuous Learning
Educate yourself about different investment options and market trends. Continuous learning helps in making better investment choices and understanding the financial landscape.

Feedback from CFP
Regularly seek feedback from your CFP regarding your investment strategy. They can provide valuable insights and recommendations based on market conditions and your financial goals.

Final Insights
Creating a robust investment plan at 53 is crucial for your financial security and retirement planning. By diversifying your investments, leveraging SIPs, and seeking professional guidance, you can effectively grow your wealth and achieve your goals. Stay informed, maintain financial discipline, and regularly review your portfolio to ensure it aligns with your objectives. Investing in a mix of equity, debt, and hybrid mutual funds will provide a balanced approach, ensuring both growth and stability.

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

Asked by Anonymous - Jun 04, 2024Hindi
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Age: 44years. Please suggest a MF which works best for retirement, child's education and long term capital appreciation. I could invest lumpsum Rs 100000/
Ans: Planning for Your Future: Retirement, Education & Growth
At 44, you're making a smart move by planning for your future goals: retirement, child's education, and long-term wealth creation. A single mutual fund might not be the best fit for all these needs, but let's explore some options:

Diversification is Key

Since your goals have different time horizons (retirement is farther away than your child's education), it's wise to diversify your investments. This means spreading your money across different asset classes to manage risk.

Actively Managed Funds for Growth

Given your long-term perspective and willingness to take on some risk, actively managed funds can be a good option. Here's why:

Outperforming the Market: Actively managed funds have fund managers who try to pick promising stocks and beat the market average. This has the potential for higher returns compared to passively managed options like index funds.
Matching Risk to Goals

Here's a possible approach to consider, but remember, this is general advice:

Retirement (Long Term): Invest a larger portion (say 60-70%) in aggressive actively managed funds like multi-cap funds. These invest in a mix of large, mid, and small-cap companies, offering growth potential along with diversification.

Child's Education (Mid Term): Allocate a mid-range portion (say 20-30%) to a balanced actively managed fund. These funds balance between equity and debt, offering some growth potential with a lower risk profile compared to aggressive funds.

Remember, your situation is unique. A Certified Financial Planner (CFP) can help you create a personalized asset allocation plan based on your risk tolerance and specific goals.

Rs. 1 Lakh Lump Sum Investment

A lump sum investment of Rs. 1 lakh can be a great way to jumpstart your investment journey. Consider investing across different actively managed funds based on your asset allocation plan.

Regular Investment (SIP) is Powerful

Don't stop with the lump sum! Regular investments (SIPs) can be a powerful tool for long-term wealth creation. Even a small amount invested regularly can benefit from rupee-cost averaging, where you purchase more units when the price is low and fewer units when the price is high.

A CFP Can Help You:

Choose the Right Funds: They can recommend actively managed funds with a good track record and experienced fund managers.

Asset Allocation: They can advise on the right mix of asset classes (multi-cap, balanced, etc.) for your goals.

Review and Rebalance: A CFP will monitor your progress and adjust your asset allocation as needed to stay on track.

Taking Charge of Your Tomorrow

By planning and investing for your future, you're taking control of your tomorrow. Actively managed funds within a diversified portfolio can be a powerful tool for growth, but remember, they also carry risk. A CFP can help you navigate your options and make informed investment decisions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Dr Nagarajan J S K   |392 Answers  |Ask -

NEET, Medical, Pharmacy Careers - Answered on May 14, 2025

Career
I'm preparing for Neet and wanted to take a drop but my parents wanted me to do something with it like a partial Drop......And right now I'm totally confused what to do and what not.........i think I should take BSC zoology in private colleges , can anyone suggest me something..........
Ans: Hi Prirhvi,

Based on your query, there are two main issues to consider:

1. You want to take a break (which may be partial or full).
2. You want to pursue a BSc in Zoology.

Before making any decisions, take some time to think and analyze your situation.

Firstly, evaluate your marks in the HSC and your recent NEET exam scores (if you have appeared for NEET 2025). If you have completed both exams, focus on turning your weaker subjects into strengths. Be prepared to answer any questions someone may pose. Without this preparation, taking a break may not be effective.

Secondly, if you decide to take a gap year, you should not also consider studying another course concurrently, as this could divert your attention and hinder your main goal. Remember, undergraduate courses are semester-based, meaning you will need to manage both NEET preparation and your regular UG courses (including internal exams, semester exams, etc.). Juggling both can be quite challenging.

If you believe it is possible to manage both, I suggest that instead of choosing Zoology for your UG, you consider subjects like Chemistry or Physics. These subjects are foundational and can be better understood through regular UG coursework. Therefore, you should not worry too much about that particular subject. However, it’s not advisable to select Zoology and take a break for NEET preparation at the same time. If you have doubts in Physics or Chemistry, you can seek clarification from your lecturers.

In summary, my suggestion is to concentrate on one goal and work towards achieving it.

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I have always taken pride for being an empathetic and approachable leader at work. Over the years, my team members have confided in me about their personal losses, burnout, even interpersonal conflicts within the team. While I am glad that they trust me, I have also noticed that my tendency to take on their emotional weight sometimes clouds my judgment when it comes to managing performance issues. In one instance, I gave extended flexibility to someone underperforming due to personal stress, and it affected the team's morale. Do you think being a compassionate leader can affect my accountability? I feel they might be taking me for granted.
Ans: Hi!!
It is extremely important to have empathy and approachability as qualities in a leader. You have them so congratulations!!

As a leader it is important for you maintain a safe distance too , so that people don't take you for granted and that your judgement is not clouded.

You need to tell people that everyone has personal problems, so the only way forward is to shut them out when they come to work and perform to the best of their abilities.

You really can't quote one incident and draw conclusions here, you might have made a mistake as regards to this team member you are mentioning, it's ok , you are human. Forgive yourself and move on.
You need to find a balance between empathy and accountability...it's a tough job to be a leader, and a compassionate one that too. Apply the concept of "different strokes to different people at different times". Set boundaries, take care of yourself and your time. You must take care of your emotional well being too, you can't allow everyone to dump their baggage on you.

Take every experience as an experience to make you wiser, have a discerning eye and know when to put your foot down and when you need your inherent compassionate quality.

Enjoy being a leader...you really can make a difference in people's lives, but at the same time you have to take care of yourself.

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

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