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Is buying a 65 lakh house with a 60k salary and 5 lakh savings feasible?

Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Oct 03, 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 - Oct 02, 2024Hindi

Money

Should I buy a 65 lakh house with 60k salary, 5 lakh savings

Ans: Buying a house is a significant financial decision, especially with your current situation: Rs 60,000 salary and Rs 5 lakh in savings. Let’s break this down from multiple perspectives before making a well-informed decision.

Assessing Affordability
A common rule in personal finance is that your home loan EMI should not exceed 30%-40% of your monthly take-home salary. With a salary of Rs 60,000, the maximum EMI you can comfortably afford is around Rs 18,000 to Rs 24,000 per month.

Loan Eligibility
Banks typically offer home loans based on 50-60% of your monthly income. In your case, this means the maximum loan you may be eligible for is around Rs 20-25 lakhs. But for a Rs 65 lakh house, you’ll need a loan much higher than that. Even if banks offer a higher amount, it would strain your monthly budget.

Down Payment
You have Rs 5 lakh in savings, but typically, banks require a 10%-20% down payment for home purchases. For a Rs 65 lakh home, you would need Rs 6.5 lakh to Rs 13 lakh just for the down payment. Your current savings fall short of this requirement, and spending your entire savings on a down payment will leave you with no buffer for emergencies.

Monthly Financial Strain
Assuming you take a larger loan, say Rs 60 lakh, your EMI could range from Rs 50,000 to Rs 60,000 per month, depending on the interest rate and tenure. With your current income, this would leave you with very little for other monthly expenses, bills, or even unforeseen costs.

Increased Financial Pressure
Paying such a high EMI will heavily strain your monthly budget, making it difficult to cover essential expenses like groceries, utilities, and savings. Any unexpected event like a medical emergency or job loss could lead to financial stress.
Consider Building Savings First
Increase Savings Before Buying
Before purchasing such a large property, it’s better to save more and aim for at least a 20% down payment. This will reduce your loan burden and make your EMIs more manageable.

Focus on Emergency Fund
Having an emergency fund is critical. Right now, your savings of Rs 5 lakh should be kept as an emergency reserve instead of spending it all on a down payment.

Renting vs. Buying
Renting Could Be a Better Option
Given your financial position, renting a home is more affordable and less financially draining at this stage. You can rent a similar house for a fraction of the cost and continue saving toward buying a house in the future when you are in a stronger financial position.
Finally
Buying a Rs 65 lakh house with your current income and savings would likely lead to financial strain. It’s better to wait, focus on increasing your savings, and possibly go for a smaller property or increase your income before committing to such a large financial decision.

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

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 52 years of age. Our monthly income is more than 1 lakh. Is it wise to take a home loan of 50 lakh now?

Ans: The rate of income for you will be higher and hence please consider your monthly expenses as well before opting for the home loan.

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Asked by Anonymous - Jun 22, 2024Hindi

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Hello Sir, I am 57 yrs Male employed, residing in Bangalore and have total savings of 2.8 Crores (1.5 crores in MF (74% eq, 20% debt, 6% gold); 50 lakhs in PMS, 50 lakhs in PF & Gratuity and 30 lakhs in FD). Planning an early retirement next year. Current monthly expns of Rs.60000 including 20k house rent. My wife is insisting to buy a house which will cost around 75 lakhs but I want to continue in rental house. My Son would be joining college next year and expect around 25 lakhs total for his engineering degree and his marriage expenses (25 lakhs) after 10 years which would be funded from my savings. Is it advisable to buy a house which will reduce monthly expenses to Rs.40000 and continue with SWP to meet the monthly expenses for the rest of our life assuming 7% inflation. Thanks

Ans: At 57 years old, you have accumulated substantial savings of Rs. 2.8 crores, divided into various investments:

Mutual Funds: Rs. 1.5 crores (74% equity, 20% debt, 6% gold).

PMS (Portfolio Management Services): Rs. 50 lakhs.

Provident Fund & Gratuity: Rs. 50 lakhs.

Fixed Deposits (FD): Rs. 30 lakhs.

Your current monthly expenses are Rs. 60,000, including Rs. 20,000 for house rent. You are considering early retirement next year and are evaluating whether to purchase a house for Rs. 75 lakhs, which could reduce your monthly expenses to Rs. 40,000.

Your son will be joining college next year, with an estimated education cost of Rs. 25 lakhs. Additionally, you anticipate needing Rs. 25 lakhs for his marriage in 10 years.

Evaluating the Decision to Buy a House
Buying a house is a significant financial decision. Let’s assess the pros and cons of purchasing a house versus continuing to rent.

Advantages of Buying a House
Reduced Monthly Expenses: Purchasing a house could reduce your monthly expenses from Rs. 60,000 to Rs. 40,000. This will give you more disposable income and lower your financial stress in retirement.

Asset Appreciation: Over the long term, the value of the house may appreciate, providing you with a valuable asset.

Emotional Security: Owning a home can provide emotional security and stability, which might align with your wife's desires for a permanent residence.

Disadvantages of Buying a House
Liquidity Concerns: Buying a house will significantly reduce your liquid savings. This could affect your ability to handle unforeseen expenses or investment opportunities.

Investment Opportunity Cost: By using Rs. 75 lakhs to buy a house, you may miss out on potential higher returns from other investments, such as mutual funds or PMS.

Maintenance Costs: Owning a house comes with maintenance costs, property taxes, and other expenses that could offset the savings on rent.

Evaluating Your Current Investments
Your current investment portfolio is well-diversified, which is essential for long-term financial stability.

Mutual Funds: Your allocation of 74% in equity, 20% in debt, and 6% in gold is balanced. Equity investments can provide growth, while debt and gold offer stability.

PMS: PMS is a good option for those looking for active management. However, the returns can be volatile. It's advisable to regularly review its performance.

Provident Fund & Gratuity: These are safe investments providing regular income post-retirement. They also offer tax benefits.

Fixed Deposits: While FDs are safe, the returns are relatively low, especially after adjusting for inflation.

Planning for Your Son’s Education and Marriage
Your son’s education and marriage expenses are significant financial goals. Here's how you can plan for them:

Education Fund: Set aside Rs. 25 lakhs specifically for your son’s education. You can use a combination of your provident fund, gratuity, and part of your mutual fund investments to meet this goal.

Marriage Fund: You have 10 years to accumulate Rs. 25 lakhs for his marriage. Consider using your fixed deposits and the returns from your mutual fund investments to fund this expense. A Systematic Withdrawal Plan (SWP) from your mutual funds can provide a steady flow of funds when needed.

Systematic Withdrawal Plan (SWP) for Retirement
An SWP from your mutual funds can provide you with a regular income during retirement. This option allows you to withdraw a fixed amount periodically, while the remaining amount continues to grow.

Adjusting for Inflation: With inflation assumed at 7%, your expenses will increase over time. It’s essential to invest in a mix of equity and debt to ensure your corpus grows while providing regular income.

Portfolio Rebalancing: As you approach retirement, gradually shift a portion of your equity investments into debt to reduce risk. This will protect your corpus while ensuring a steady income.

Final Insights
Balancing the decision between buying a house and continuing to rent depends on your comfort with liquidity, potential investment returns, and emotional factors.

Consider Renting: Renting might be a better option if you prefer maintaining liquidity and investing your money in higher-return instruments. This aligns with your current investment strategy and allows you to focus on generating a regular income through SWP.

Allocate Funds Wisely: Set aside specific amounts for your son’s education and marriage. Use your current investments to meet these goals without disrupting your retirement plan.

Review and Rebalance: Regularly review your investment portfolio and rebalance it to align with your retirement goals. Focus on maintaining a mix of growth (equity) and stability (debt).

Plan for Inflation: Ensure your retirement corpus is protected against inflation. Adjust your SWP to account for rising expenses over time.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 01, 2024

Asked by Anonymous - Jun 30, 2024Hindi

Money

Asked on - Jun 22, 2024 Hello Sir, I am 57 yrs Male employed, residing in Bangalore and have total savings of 2.8 Crores (1.5 crores in MF (74% eq, 20% debt, 6% gold); 50 lakhs in PMS, 50 lakhs in PF & Gratuity and 30 lakhs in FD). Planning an early retirement next year. Current monthly expns of Rs.60000 including 20k house rent. My wife is insisting to buy a house which will cost around 75 lakhs but I want to continue in rental house. My Son would be joining college next year and expect around 25 lakhs total for his engineering degree and his marriage expenses (25 lakhs) after 10 years which would be funded from my savings. Is it advisable to buy a house which will reduce monthly expenses to Rs.40000 and continue with SWP to meet the monthly expenses for the rest of our life assuming 7% inflation. Thanks

Ans: Your current financial position is impressive. You have Rs. 2.8 crores in savings. This includes Rs. 1.5 crores in mutual funds (MFs), Rs. 50 lakhs in portfolio management services (PMS), Rs. 50 lakhs in provident fund (PF) and gratuity, and Rs. 30 lakhs in fixed deposits (FDs). You plan to retire early next year, which is a significant life decision.

Your monthly expenses are Rs. 60,000, including Rs. 20,000 for house rent. Your wife wants to buy a house costing around Rs. 75 lakhs, but you prefer to stay in a rental house. Your son will be starting college next year, and you expect his engineering degree to cost around Rs. 25 lakhs. You are also planning for his marriage, estimating another Rs. 25 lakhs in 10 years.

Evaluating the Decision to Buy a House
Pros of Buying a House
Reduced Monthly Expenses: Owning a house will reduce your monthly expenses from Rs. 60,000 to Rs. 40,000. This is a significant saving.

Stability and Security: Having your own house provides stability and a sense of security, especially in retirement.

No Rent Hike: You won't have to worry about rent increases every few years.

Cons of Buying a House
Large Upfront Cost: Buying a house for Rs. 75 lakhs will require a substantial chunk of your savings.

Maintenance Costs: Owning a house comes with maintenance costs, property tax, and other expenses.

Less Liquidity: A house is not a liquid asset. In case of emergencies, it may not be easy to sell quickly.

Assessing Your Preferences
While buying a house has its advantages, staying in a rental house provides flexibility. It allows you to keep your investments diversified and liquid. This can be crucial in managing unexpected expenses in retirement.

Planning for Your Son's Education and Marriage
Education Expenses
You have estimated Rs. 25 lakhs for your son's engineering degree. This is a significant amount but manageable with your current savings. Ensuring these funds are in relatively safe and easily accessible investments is crucial.

Marriage Expenses
You plan to set aside Rs. 25 lakhs for your son's marriage in 10 years. This goal is long-term, allowing you to invest in a mix of equity and debt to grow this corpus.

Managing Retirement Expenses
Systematic Withdrawal Plan (SWP)
You plan to use a systematic withdrawal plan (SWP) to meet monthly expenses. This is a wise strategy. It allows you to withdraw a fixed amount regularly, ensuring a steady cash flow while keeping your investments growing.

Inflation Consideration
Assuming a 7% inflation rate, your current monthly expenses of Rs. 60,000 will increase over time. Ensuring your investments grow at a rate that outpaces inflation is crucial.

Evaluating Your Investment Portfolio
Mutual Funds
Your Rs. 1.5 crores in MFs are diversified (74% equity, 20% debt, 6% gold). This is a balanced approach, providing growth potential and stability. However, regularly reviewing and rebalancing your portfolio is essential.

Portfolio Management Services (PMS)
Your Rs. 50 lakhs in PMS are managed by professionals. This is a good strategy, but monitoring performance and fees is crucial to ensure they align with your financial goals.

Provident Fund and Gratuity
The Rs. 50 lakhs in PF and gratuity are safe, long-term investments. These provide a steady and secure return, which is beneficial in retirement.

Fixed Deposits
Your Rs. 30 lakhs in FDs provide liquidity and safety. However, returns on FDs are usually lower. Balancing between safety and growth is crucial.

Assessing the Need for Professional Guidance
Certified Financial Planner
A Certified Financial Planner (CFP) can provide personalized advice tailored to your financial situation. They can help you optimize your investment strategy, ensuring it aligns with your retirement goals and risk tolerance.

Benefits of Active Management
Actively managed funds, overseen by a CFP, can outperform index funds. They offer flexibility to adjust investments based on market conditions, potentially providing better returns.

Addressing Direct and Regular Funds
Disadvantages of Direct Funds
Direct funds require active management and monitoring, which can be time-consuming. Without professional guidance, you may miss opportunities or fail to optimize your portfolio.

Benefits of Regular Funds
Investing through a CFP provides expert management and regular reviews. This ensures your investments are aligned with your financial goals, offering peace of mind.

Planning for Future Uncertainties
Health Care Costs
Healthcare costs can be a significant expense in retirement. Ensuring you have adequate health insurance and a contingency fund is essential.

Emergency Fund
Maintaining an emergency fund to cover unexpected expenses is crucial. This should be in a liquid and easily accessible form, like a savings account or FD.

Estate Planning
Proper estate planning ensures your assets are distributed according to your wishes. This includes making a will and considering potential tax implications.

Final Insights
Your financial situation is strong, providing a solid foundation for early retirement. Balancing your wife's desire to buy a house with your preference to stay in a rental is crucial. Consider both financial and emotional aspects in this decision.

Ensuring you have adequate funds for your son's education and marriage is essential. A diversified investment strategy, guided by a CFP, will help you achieve these goals while managing retirement expenses.

Regular reviews and adjustments to your investment portfolio are crucial to keep pace with inflation and changing market conditions. Professional guidance can provide valuable insights and peace of mind.

Balancing safety and growth, maintaining liquidity, and planning for future uncertainties will help you enjoy a comfortable and secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |7290 Answers |Ask -Follow

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

Question by Surinder - Oct 22, 2024Hindi

Money

I am 64 Years of age still earning rs 18 LPA living on rent @ 21000pm, should i go to purchase a house of 60 lacs my saving may be 80 Lacs I dont have any further liability me and my wife is there only , Two daughters married. Please advise

Ans: You are 64 years old and still earning Rs. 18 lakhs annually. Living on rent for Rs. 21,000 per month seems manageable. You have savings of Rs. 80 lakhs and no other liabilities. With your two daughters married, you and your wife are financially secure in terms of dependents.

You are considering purchasing a house worth Rs. 60 lakhs. This is a significant decision and requires careful evaluation.

Assessing the Need for Purchasing a House
Renting vs. Owning
You are currently paying Rs. 21,000 monthly in rent, which equals Rs. 2.52 lakhs annually. This is a reasonable amount compared to your income of Rs. 18 lakhs per year. Owning a house, however, will bring additional costs such as property tax, maintenance, and repairs. Let's consider the benefits and drawbacks of buying a house at this stage.

Advantages of Renting:
Flexibility to move if needed.
Lower ongoing financial commitment.
Savings can continue to grow and be invested elsewhere.
Advantages of Owning:
Stability and security of owning your home.
No monthly rent payments.
Potential long-term capital appreciation.
Buying a house would use up a large portion of your savings. It might limit your liquidity and leave you with less cash for emergencies or future needs. At your age, liquidity is crucial for managing unforeseen expenses, especially healthcare-related ones.

Liquidity and Emergency Planning
You and your wife need a financial cushion for healthcare and daily living expenses. Though your earnings are good, retirement could be on the horizon. The Rs. 80 lakhs you have saved should be allocated wisely to provide for your post-retirement years.

Buying a house will deplete Rs. 60 lakhs, leaving only Rs. 20 lakhs for other needs. This may not be sufficient for future healthcare, emergencies, or lifestyle expenses.

Investment Potential
House as an Investment Option
While buying a house may seem like a good investment, it is a less liquid asset. If you need cash in the future, selling property may take time. Property prices also fluctuate based on market conditions. In contrast, keeping your savings liquid in mutual funds, fixed deposits, or other financial instruments can offer flexibility and consistent growth.

A Certified Financial Planner would typically advise against locking up too much of your savings in real estate, especially at this age. It may be better to focus on investments that offer liquidity, safety, and steady returns.

Health Care and Long-Term Planning
As you and your wife age, healthcare costs will likely rise. Keeping a significant portion of your Rs. 80 lakh savings in easily accessible and growth-oriented investments is essential. Healthcare emergencies or long-term care may arise, and selling a house during such times might not be feasible.

Consider enhancing your health insurance coverage if needed. Also, set aside funds in safe, liquid investments that can be accessed easily during emergencies.

Evaluating Your Current Income and Expenses
You are earning Rs. 18 lakhs annually, which gives you good financial stability. Your current rent of Rs. 21,000 per month is reasonable compared to your income. This leaves you with plenty of room for savings and investments.

Buying a house worth Rs. 60 lakhs may disrupt this balance. You will not only lose liquidity but also face additional expenses like property tax, maintenance, and repairs. Renting, on the other hand, provides flexibility without burdening your finances.

Benefits of Actively Managed Funds over Real Estate
If you are considering investing your Rs. 80 lakhs, actively managed mutual funds can provide better returns and more flexibility than real estate. Actively managed funds have the potential to outperform the market, as professional fund managers can adjust the portfolio based on market conditions.

In contrast, real estate is an illiquid investment and can take time to sell if needed. Moreover, real estate prices can stagnate or even decline in certain areas, making it a less attractive investment compared to mutual funds that offer both growth and liquidity.

Disadvantages of Index Funds
Some people prefer index funds for their low fees, but they are not the best option for everyone. Index funds merely replicate the market performance and may not provide significant returns over inflation in the long run. Actively managed funds, on the other hand, can potentially beat the market and give higher returns, making them more suitable for long-term wealth creation.

Disadvantages of Direct Mutual Funds
You may have considered direct mutual funds because of lower expense ratios. However, these funds do not come with expert advice, which is crucial, especially when managing significant retirement savings.

Investing through a Certified Financial Planner (CFP) and a Mutual Fund Distributor (MFD) provides access to personalized guidance. A CFP will help you balance your portfolio based on your goals, risk appetite, and time horizon. This can make a big difference in managing your wealth efficiently.

Maintaining Financial Independence
Given your age and the absence of any liabilities, it is vital to maintain your financial independence. Your income is good, but in the coming years, you may want to transition into retirement. Financial independence means having enough liquid assets to cover living expenses, healthcare, and unforeseen emergencies without worrying about market fluctuations.

Locking a large portion of your savings in real estate could compromise your financial independence. In contrast, keeping your savings in a diversified portfolio of liquid investments ensures that you can continue to manage your expenses and live comfortably.

Final Insights
Here are some important points for your situation:

Liquidity: Retain liquidity to cover emergencies, healthcare, and lifestyle expenses.

Renting: Renting at Rs. 21,000 per month is affordable and gives flexibility.

Owning a House: Buying a house may limit your liquidity and increase your financial burden.

Investments: Actively managed mutual funds offer better growth and liquidity than real estate.

Healthcare: Consider enhancing health insurance and setting aside emergency funds.

Long-Term Financial Independence: Focus on investments that provide liquidity and steady growth for retirement.

At this stage of life, maintaining financial flexibility and independence should be the priority. Locking your savings into real estate may not be the best decision.

Best Regards,

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

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NEET, Medical, Pharmacy Careers - Answered on Dec 21, 2024

Asked by Anonymous - Nov 19, 2024Hindi

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Hello sir I am mbbs graduated from russia in 2020,n passed with my fmge exam in india in 2021, I want to ask if i want to practice medicine or work as doctor in uk ? Is it necessary for me to pass plab exam exam? Or if i get sponsorship from any uk i will be able to work there and simultaneously i will give plab exam?? Please guide me i m so confused?

Ans: Hi, I understand that you pursued a medicine course in Russia (a non-European country) and, since you are from India, you have completed the FMGE. Now you want to practice or work in the UK as a doctor?

Based on your question, you are eligible to practice in India after completing your internship (which you haven't mentioned, but I assume you have completed it). The FMGE is essentially a licensure exam for Indian students who have completed their medical studies abroad, so you are eligible to practice in India only.

If you want to practice medicine in the UK, you need to complete the PLAB test, as you are from outside the UK/Switzerland/European countries (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland).

You also inquired about sponsorship. Here is the information related to sponsorship for practicing medicine in the UK.
(Extracted from general medical council, uk org. )Applying for registration using sponsorship
If you apply through sponsorship, you will have to satisfy the sponsor that you possess the knowledge, skills and experience required for practising as a fully registered medical practitioner in the UK. Each sponsor has their own scheme which we have pre-approved. If you can satisfy the requirements of their scheme, they will issue you with a Sponsorship Registration Certificate (SRC) which you will need for your application with us. Please ensure this is a Sponsorship Registration Certificate for GMC registration, as we can’t accept UK visa sponsorship certificates for your application for registration.
Please note that a core part of all sponsors' criteria is that a doctor applying for an offer of sponsorship must have been engaged in medical practice for three out of the last five years including the most recent 12 months. If you cannot meet these minimum criteria, it is unlikely that you'll be able to supply sufficient evidence to support your application for sponsorship.
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• University Hospitals Birmingham NHS Foundation Trust - UHB LED Fellowship Programme
• University Hospitals Bristol and Weston NHS Foundation Trust – Bristol Children's Hospital International Fellowship Scheme
• University Hospitals Bristol and Weston NHS Foundation Trust - Department of General Internal Medicine at Weston General Hospital
• University Hospitals Coventry and Warwickshire NHS Trust
• University Hospitals of Leicester NHS Trust - Postgraduate Clinical Fellowship Programme
• University of Buckingham – Master of Medicine
• University of Buckingham – Master of Surgery
• University of Chester and Cheshire and Wirral Partnership NHS Trust – International Training Fellows Psychiatry
• University of Hertfordshire – Professional Doctorate in General Internal Medicine (Clinical MD) Programme
KINDLY NOTE: If your sponsor is not on this list then you cannot apply using sponsorship.
If you have any further questions, please visit the GMC website for more information.

WISH YOU ALL THE VERY BEST.

Dr Nagarajan Jsk |183 Answers |Ask -Follow

NEET, Medical, Pharmacy Careers - Answered on Dec 21, 2024

Asked by Anonymous - Aug 02, 2024Hindi

Career

I’m mbbs final year student from Kathmandu university want pg medicine from UAE

Ans: You have provided very limited information. I understand that you are a student from Kathmandu University and wish to pursue higher education in medicine in the UAE. To provide a more accurate response, I need the following details:

What is your nationality? (Based on your nationality, I can check the relevant requirements from the health department regarding courses and internships).

Dr Nagarajan Jsk |183 Answers |Ask -Follow

NEET, Medical, Pharmacy Careers - Answered on Dec 21, 2024

Asked by Anonymous - Dec 20, 2024Hindi

Career

Sir my son has 92 percentile in cat 2024..what are his scopes of admission.

Ans: Hi Sir,
You have provided very limited information to obtain the details. However, the percentile of the candidate will not solely determine the admission process. Other factors are also involved, including:

- Course
- Institution
- Caste
- Creamy layer
- Gender

But, there may be possibilities for admission to the following IIMs: IIM Visakhapatnam, Udaipur, Bodhgaya, Shillong, and Rohtak.

Ramalingam Kalirajan |7290 Answers |Ask -Follow

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

Asked by Anonymous - Dec 21, 2024Hindi

Money

Hi Sir, I follow your articles regularly and your detailed assessment is really awesome.I am 47yrs Male with wife, 20&18 years kids, elder one is in B.Tech and younger one is 12th. My wife is a home maker. Coming to financials. I have 4 houses including the one residing worth 10cr(total) and getting rental income of 70k per month, invested in stocks and MFs worth 60L, have foreign stocks of worth 1.7cr, accumulated pf around 1.3cr. I have farm lands worth 5cr. Have 1.2cr loan and salary of ~4L (net). current sips in equity 70k/month, have 5Cr term plan, health insurance for family 50L. How do I plan my retirement at 52-53years assuming 80 years life expectancy. Don't want to depend on kids and need regular income ~3-4L per month.

Ans: Asset Evaluation
Real Estate:
You own four houses worth Rs 10 crore, generating Rs 70,000 monthly rental income. This is a solid base for passive income. However, real estate can have fluctuating maintenance costs, tenant issues, and varying rental yields over time.

Stocks and Mutual Funds:
Your Rs 60 lakh investment in stocks and mutual funds is a commendable step. Active mutual funds offer professional fund management and can outperform index funds over time.

Foreign Stocks:
Your Rs 1.7 crore portfolio in foreign stocks adds geographical diversification. Monitor currency exchange fluctuations and global market trends.

Provident Fund (PF):
With Rs 1.3 crore in PF, this is a reliable retirement corpus. The fund provides fixed returns and tax benefits, adding stability.

Farm Lands:
Farm lands worth Rs 5 crore are an illiquid but valuable asset. They might not generate consistent income unless leased or developed.

Loans:
A loan liability of Rs 1.2 crore needs prioritised repayment. Focus on loans with higher interest rates first.

Insurance Coverage:
A Rs 5 crore term plan is robust. Your Rs 50 lakh health insurance is sufficient for unexpected medical emergencies.

Retirement Goals
You need Rs 3–4 lakh monthly for 27–28 years post-retirement.
The portfolio must generate steady, inflation-adjusted returns.
Action Plan for Retirement
Debt Management
Prepay High-Interest Loans:
Use a portion of your surplus income to prepay loans. This reduces interest outflow and increases your cash flow.

Avoid New Loans:
Focus on reducing existing liabilities instead of taking on new ones.

Portfolio Restructuring
Real Estate:
Retain essential properties. Sell underperforming or non-essential properties to reduce concentration in real estate. Invest proceeds in mutual funds or debt instruments for diversification.

Mutual Funds (MFs):
Increase SIPs in actively managed funds. They outperform direct funds due to guidance from Certified Financial Planners and MFDs. Regular funds offer better tracking and professional assistance.

Stocks:
Monitor direct equity investments closely. Consider reallocating underperforming stocks to mutual funds for better management.

Debt Instruments:
Invest in high-quality debt funds or fixed-income securities for stability. These instruments balance equity volatility and ensure steady returns.

SIP Strategy
Increase SIPs from Rs 70,000 to Rs 1 lakh/month.
Allocate 70% to equity funds for long-term growth.
Invest 30% in debt funds for stability and liquidity.
Emergency Fund
Maintain a 12-month expense reserve in liquid funds or fixed deposits.
This covers unexpected expenses without disturbing investments.
Income During Retirement
Systematic Withdrawal Plan (SWP)
Use SWPs in mutual funds to generate regular income.
Withdraw 6–8% annually from your mutual fund portfolio for a steady income stream.
Rental Income Optimisation
Review property rents regularly.
Invest part of rental income in equity or debt mutual funds for compounding.
Dividend Stocks
Retain high-dividend-yield stocks for regular income.
Reinvest surplus dividends for long-term growth.
Tax Efficiency
Equity Funds Taxation:
Long-term gains above Rs 1.25 lakh are taxed at 12.5%. Short-term gains are taxed at 20%.

Debt Funds Taxation:
Both short- and long-term gains are taxed per your income slab.

Real Estate Capital Gains:
Use exemptions under Sections 54 or 54F to save tax on property sales.

Inflation Protection
Allocate 60–70% of your portfolio to equity investments.

Equity provides inflation-adjusted returns over time.

Debt funds and fixed instruments safeguard against equity market volatility.

Estate Planning
Draft a will to allocate assets transparently among family members.
Use nomination and joint ownership to avoid legal complications.
Consider a family trust for farm lands to avoid disputes.
Periodic Review
Review your financial plan every six months.
Adjust investments based on market conditions, goals, and needs.
Consult a Certified Financial Planner regularly for updates.
Finally
A well-diversified portfolio ensures financial independence post-retirement. Focus on debt repayment, portfolio balance, and tax-efficient withdrawals. Your assets can comfortably generate Rs 3–4 lakh monthly income, adjusted for inflation.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Kanchan Rai |444 Answers |Ask -Follow

Relationships Expert, Mind Coach - Answered on Dec 21, 2024

Question by Kevin - Dec 19, 2024Hindi

Relationship

I am the eldest sibling in our families and aged 51. Normally, whenever anyone in the family has a problem - financial, mental, psychological, issue with people or anything else, they come up to discuss with me and share. Well, many would say I am lucky as people look up to me when they are in any kind of a problem. But that is not the case. Sadly no one is around with whom I can discuss or even think to share my issues, my problems. I do not have any friends. Sadly, yes, that is a fact and at my age, I dont expect that here we have a culture where we can get to making friends, at least the kind of friends with whom you can confide, share your feelings, problems. I tried and failed. Maybe because I am introvert or maybe I am too cautious. To make it more complicated, I dont work in the regular kind of job. I am a lone person who works as a freelance from home. This limits my outreach when it comes to interacting with real people. I have clients, business contacts, but I cannot get personal with them. It will never be a good choice. My wife is busy with her job + we do not have any relation beyond the daily matters related to household and it has been more than 10 years now that we live this way. Tried to sort out things with her but she just does not have time and interest (after all who wants to add on to tensions, stress). My daughter is after all my daughter - I cannot share these with her, and definitely at 10 she is too young to be one to discuss such stuff. I am not sure how far this issue can be fixed but I am hopeful to find some path here.

Ans: Dear Kevin,
Starting small can be helpful. Consider connecting with people through shared interests or hobbies, either online or in person, where the pressure to immediately open up is minimal. Online communities, local meetups, or volunteer activities can create low-stakes opportunities to connect with like-minded individuals. The goal isn’t to instantly find someone to confide in but to slowly build a sense of belonging and companionship.

Your relationship with your wife appears to be another significant source of emotional distance. While her lack of interest in deep conversations may seem like a barrier, it’s worth exploring other ways to reconnect—perhaps by spending time together in shared activities or revisiting moments that once brought you closer. Sometimes, relationships stuck in routines benefit from new experiences or even professional counseling to navigate the underlying dynamics.

Regarding your daughter, while it’s clear she cannot shoulder your emotional burdens, she can still be a source of joy and connection. Investing time in activities with her can provide a sense of fulfillment and grounding that counters loneliness.

Above all, remember that reaching out for professional support, such as therapy, is not a sign of weakness but an act of self-care. A therapist can provide a safe space to express your feelings and help you develop strategies to foster deeper connections and manage emotional isolation.

You deserve to feel supported and connected, and even if the journey to finding that seems long, every step you take toward opening up or seeking out others is a move toward a more fulfilling and less lonely existence.

T S Khurana |260 Answers |Ask -Follow

Tax Expert - Answered on Dec 21, 2024

Asked by Anonymous - Nov 22, 2024Hindi

Money

My Question is for New Tax Regime for Financial Year 2024 – 25. Total gross Income is Rs.9 lakhs and along with that income from share / stock trading i.e short term gains of Rs. 1 lakh. Could you please help me advise if what would be the tax liability?

Ans: 01. Considering your Income of Rs.9.00 lakhs as business income & Rs.1.00 lakh as STCG on securities, without any tax savings, your tax liability would be around Rs.62,400.00 in New tax regime. If we opt for the old tax regime, your tax liability would be much more than this.
Most welcome for any further clarifications. Thanks.

T S Khurana |260 Answers |Ask -Follow

Tax Expert - Answered on Dec 21, 2024

Question by SA - Nov 11, 2024Hindi

Money

I got a residential property through will from my mother,,property is 30 years old and i am planning to sell it, in that case i am going to get Rs 165lacks,, what will be the tax implication and how to avoid the same kindly advise i am 55 years old married man with a daughter

Ans: 01. In this case, you would be subjected to LTCG (Long Term Capital Gain) tax.
02. To work out LTCG, you should reduce its Cost from the Sale proceeds (Rs.165.00 lakhs).
of property, which was costed to your mother.
03. However, following details may help you to assess your tax liability.
Under present provisions of Income Tax Act, you may opt any of the options (Long Term
Capital Gains), as under :
(a). Tax Rate 12.50% without indexation or
(b). Tax Rate of 20% with Indexation.
04. You may calculate your tax liability under both options & may opt for the tax regime, where tax liability is minimum.
05. To avoid tax, you may invest in purchase of some house property. Exemption available would be minimum of Cost of new house property or the LTCG, which ever is less.
06. You have the option to purchase Capital Gain Bonds of NHAI etc., for tax saving.
07. Most welcome for any further clarifications. Thanks.

T S Khurana |260 Answers |Ask -Follow

Tax Expert - Answered on Dec 21, 2024

Asked by Anonymous - Dec 19, 2024Hindi

Money

Hello Sir, I worked in a Pvt Ltd company from 2006 to 2011, and they had their own PF trust. The company was later sold off to another firm. I still haven't withdrawn the my PF amount. How will i be able to do that. I have the PF number and ESP number. Since this was before 2011 , my UAN is not linked to this account. How will i be able to retrieve my PF amount that is still stuck here.

Ans: Kindly keep in touch with your previous employer (present owner of the company), in this connection. There should not be any problem in getting your PF amount, except certain formalities/ forms to be submitted.
Most welcome for any further clarifications. Thanks.

T S Khurana |260 Answers |Ask -Follow

Tax Expert - Answered on Dec 21, 2024

Asked by Anonymous - Dec 21, 2024Hindi

Money

Dear Guru. I have inherited a property in Mumbai from my deceased father which was purchased in 1983 by him. If today i sell the property which is worth 2.60 Crs whats my capital gains tax and how will it be calculated

Ans: 01. In absence of exact figures, it is not possible to calculate your Capital Gains Tax. However, following details may help you to assess your tax liability.
02. Under present provisions of Income Tax Act, you may opt any of the options (Long Term
Capital Gains), as under :
(a). Tax Rate 12.50% without indexation or
(b). Tax Rate of 20% with Indexation.
03. You may calculate your tax liability under both options & may opt for the tax regime, where tax liability is minimum.
04. Most welcome for any further clarifications. Thanks.

Ramalingam Kalirajan |7290 Answers |Ask -Follow

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

Question by Anil - Dec 20, 2024Hindi

Money

Top4 sips with 15k amount suggest me

Ans: Here’s an updated strategy for your Rs. 15,000 SIP allocation, replacing the sectoral/thematic fund with a small-cap fund for better long-term growth potential.

Suggested SIP Allocation (Rs. 15,000)
Large-Cap Fund

Allocation: Rs. 4,000/month
Objective: Stability and steady growth by investing in India’s top 100 companies.
Why Choose: Provides consistent returns and low volatility in your portfolio.
Flexi-Cap Fund

Allocation: Rs. 4,000/month
Objective: Diversified exposure across large, mid, and small-cap stocks.
Why Choose: Offers balanced risk and returns with flexibility during market cycles.
Mid-Cap Fund

Allocation: Rs. 3,500/month
Objective: Tap into the growth potential of medium-sized companies.
Why Choose: Higher returns with manageable risk compared to small caps.
Small-Cap Fund

Allocation: Rs. 3,500/month
Objective: Focus on fast-growing small-cap companies.
Why Choose: High-growth potential over the long term, though with higher volatility.
Why Include Small-Cap Funds?
Long-Term Growth: Small-cap companies have immense potential to grow significantly over time.
Diversification: Adds exposure to an underrepresented segment, complementing large and mid-caps.
High Returns: Potential for higher returns compared to other categories, albeit with higher risk.
Key Considerations
Investment Horizon: Stay invested for at least 7-10 years to mitigate short-term volatility.
Active Fund Management: Avoid direct or index funds to leverage professional expertise.
Regular Monitoring: Review fund performance periodically with a Certified Financial Planner.
Tax Implications
Equity Funds:
LTCG above Rs. 1.25 lakh/year taxed at 12.5%.
STCG (held less than 1 year) taxed at 20%.
Final Insights
This updated allocation ensures a mix of stability, moderate risk, and high growth. With consistent SIPs and periodic reviews, you can achieve robust wealth creation over the long term. A Certified Financial Planner can assist in optimising your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

See more questions »

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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