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50-Year-Old Male Needs Advice on Choosing a Good Fund for SWP

Ramalingam

Ramalingam Kalirajan  |8265 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 14, 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
PREM Question by PREM on Dec 14, 2024Hindi
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Money

Can you please suggest good fund , for SWP.

Ans: For a Systematic Withdrawal Plan (SWP), selecting funds depends on your risk appetite and income needs. Generally, balanced advantage funds or conservative hybrid funds are suitable for stable withdrawals. For higher growth, consider large-cap equity funds. It’s essential to match the fund with your goals and tax considerations. Consult a Certified Financial Planner (CFP) or Mutual Fund Distributor (MFD) for a personalised solution tailored to your financial needs.

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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Ramalingam

Ramalingam Kalirajan  |8265 Answers  |Ask -

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

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I am 65 and retired, want to invest 50L in SWP scheme with monthly withdrawal of 50k after one year of investing. Pl suggest good fund ????????
Ans: It's wonderful that you're considering investing in a Systematic Withdrawal Plan (SWP) to generate a steady income stream during your retirement years. Given your investment horizon and income requirement, it's essential to choose a fund that balances growth potential with stability.

For your SWP scheme, you may want to consider investing in a balanced or hybrid fund. These funds typically allocate a portion of their assets to equities for growth potential and the remainder to debt instruments for stability.

Balanced funds aim to provide a blend of capital appreciation and income generation by investing in a mix of equities and debt securities. They can be suitable for retirees looking for a steady income stream while also seeking potential growth opportunities.

When selecting a balanced fund, look for one with a consistent track record of performance, low expenses, and a seasoned fund manager. Additionally, consider the fund's asset allocation, risk profile, and investment strategy to ensure it aligns with your financial goals and risk tolerance.

It's crucial to review your investment periodically and make adjustments as needed to ensure your portfolio remains aligned with your income requirements and financial goals.

Before making any investment decisions, I highly recommend consulting with a Certified Financial Planner who can assess your retirement needs and recommend a suitable SWP scheme tailored to your specific circumstances.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8265 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 27, 2024

Money
My father's is retiring next year in 2025 and would like to Invest Rs 50 Lakhs I I need to know best funds for SWP which would provide 20-25K monthly Income ?
Ans: Congratulations to your father on his upcoming retirement! It's wonderful that he is thinking about how to invest his Rs. 50 lakhs to generate a steady monthly income. Let’s explore the best options for setting up a Systematic Withdrawal Plan (SWP) to provide a monthly income of Rs. 20,000-25,000.

Understanding SWP (Systematic Withdrawal Plan)
A Systematic Withdrawal Plan (SWP) is an excellent option for retirees. It allows regular withdrawals from a lump sum investment in mutual funds. This way, your father can receive a fixed amount monthly while keeping the rest of his money invested.

Benefits of SWP
Regular Income: SWP ensures a steady income stream, making it easier to manage monthly expenses. This is particularly beneficial during retirement when a consistent cash flow is essential.

Tax Efficiency: SWP can be more tax-efficient than traditional fixed deposits. Only the capital gains portion of the withdrawal is taxed, not the principal amount. This can lead to significant tax savings, especially over the long term.

Capital Appreciation: The remaining invested amount continues to grow, offering potential capital appreciation over time. This means your father's investment can keep pace with inflation and potentially increase in value.

Flexibility: SWP allows changes in withdrawal amounts and frequency based on financial needs. If your father's expenses increase or decrease, he can adjust the SWP accordingly.

Factors to Consider When Choosing Funds for SWP
Risk Tolerance
Your father's risk tolerance is crucial. Since he is retiring, preserving capital while generating income is vital. Balanced funds or conservative hybrid funds are ideal. They offer a mix of equity and debt, providing stability and growth potential.

Investment Horizon
Although your father needs regular income, the investment horizon should be long-term. This helps mitigate market volatility and maximizes returns. A mix of equity and debt ensures that the portfolio is not overly exposed to market risks.

Fund Performance
Choose funds with a consistent track record. Look for funds that have performed well over the last 5-10 years. Stability and reliability are key when selecting funds for retirement income. Past performance is not a guarantee of future returns, but it can indicate how the fund has managed market cycles.

Expense Ratio
Opt for funds with low expense ratios. High expense ratios can eat into returns, reducing the amount available for monthly withdrawals. A lower expense ratio means more of your money stays invested and working for you.

Professional Management
Actively managed funds are preferable. They are managed by experienced professionals who adjust the portfolio based on market conditions. This reduces risk and improves returns compared to index funds. Active management can provide the necessary expertise to navigate volatile markets and optimize returns.

Types of Funds Suitable for SWP
Balanced Funds
Balanced funds invest in a mix of equities and debt. They provide stability and growth, making them ideal for SWP. They aim to balance risk and return, which is crucial for retirees. By investing in both equities and debt, balanced funds can offer the potential for higher returns than pure debt funds while maintaining a lower risk profile than pure equity funds.

Conservative Hybrid Funds
These funds invest primarily in debt instruments and a smaller portion in equity. They offer stability with some growth potential. They are suitable for investors with a low risk appetite. The debt component provides steady income and preserves capital, while the equity component offers growth potential.

Equity Savings Funds
These funds invest in a mix of equity, debt, and arbitrage opportunities. They offer moderate risk and return. The debt component provides stability, while the equity component offers growth. Arbitrage opportunities help in reducing risk further and can provide consistent returns even in volatile markets.

Monthly Income Plans (MIPs)
MIPs primarily invest in debt instruments and a small portion in equity. They aim to provide regular income while preserving capital. They are suitable for conservative investors. The primary goal of MIPs is to provide a steady income stream, making them ideal for retirees looking for regular income.

Setting Up the SWP
Calculating the Withdrawal Amount
To generate Rs. 20,000-25,000 monthly, the SWP should be set up based on expected returns. Assuming a conservative annual return of 8%, an SWP can be structured to withdraw around Rs. 20,000-25,000 monthly without depleting the capital too quickly. This calculation ensures that the withdrawals are sustainable over the long term.

Starting the SWP
Once the funds are selected, invest the Rs. 50 lakhs in these funds. Set up the SWP to withdraw the desired amount monthly. Regularly review and adjust the SWP based on fund performance and changing needs. It's important to start the SWP after understanding the withdrawal rate that ensures the capital lasts through the retirement period.

Tax Implications
SWP is tax-efficient. Only the capital gains portion of the withdrawal is taxed. Long-term capital gains from equity funds (held for more than a year) are taxed at 10% above Rs. 1 lakh per year. Short-term gains are taxed at 15%. Debt fund gains are taxed based on the holding period, with indexation benefits for long-term gains. Understanding the tax implications can help in effective planning and maximizing after-tax returns.

Monitoring and Adjusting the SWP
Regular Review
Regularly review the SWP and the performance of the funds. This ensures the strategy remains aligned with financial goals. Adjustments might be necessary based on market conditions and changing financial needs. Regular reviews help in ensuring that the withdrawals are sustainable and the investment continues to meet the income needs.

Rebalancing the Portfolio
Periodically rebalance the portfolio to maintain the desired asset allocation. This ensures the portfolio remains aligned with risk tolerance and investment goals. Rebalancing helps in managing risk and ensuring that the investment strategy remains effective.

Emergency Fund
Maintain an emergency fund separate from the SWP. This provides a buffer for unexpected expenses without disrupting the SWP. An emergency fund ensures that you don't have to withdraw more than planned from the SWP, preserving the capital for future needs.

Final Insights
Investing Rs. 50 lakhs through an SWP is a smart move for generating a steady monthly income for your father. By choosing the right mix of balanced, conservative hybrid, equity savings, and monthly income plans, he can achieve a stable income while preserving his capital. Regular reviews and adjustments will ensure the SWP remains effective and aligned with his financial goals.

Remember, it’s important to consult a certified financial planner for personalized advice. They can help tailor the SWP to your father’s specific needs and circumstances, ensuring a secure and comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8265 Answers  |Ask -

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

Money
Which fund best for swp plan
Ans: A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your mutual fund investments at regular intervals. It's a great option if you need a regular income, especially post-retirement. The key advantage of an SWP is that it provides a steady cash flow without completely redeeming your investments. The remaining invested amount continues to grow and can help you combat inflation over time.

Criteria for Selecting Funds for SWP
Choosing the right fund for SWP is crucial to ensuring a steady and reliable income. Here are some important criteria to consider:

1. Consistent Performance
Look for funds with a consistent track record of returns. The fund should have performed well across different market cycles, ensuring stability and reliability.

2. Low Volatility
Funds with lower volatility are preferable for SWP. High volatility can lead to fluctuating returns, which might impact your regular income.

3. Balanced Exposure
A mix of equity and debt exposure is often recommended. This balance helps in achieving a stable return while minimizing risks.

4. Post-Tax Returns
Consider the post-tax returns, especially if you fall into a higher tax bracket. Funds that offer tax efficiency should be preferred, as it will increase your effective income.

5. Regular Payouts
The fund should have a structure that supports regular payouts. This ensures that you get a fixed amount at your chosen interval without interruptions.

6. Historical SWP Performance
Evaluate the fund’s historical SWP performance. Check if it has been able to sustain payouts without eating into the principal over time.

Best Types of Funds for SWP
1. Balanced Advantage Funds
These funds adjust the allocation between equity and debt based on market conditions. This flexibility allows them to capture upside potential in rising markets while protecting the downside during market corrections. Their moderate risk profile makes them a good choice for SWP.

2. Equity Savings Funds
Equity savings funds invest in a mix of equity, debt, and arbitrage opportunities. They provide better risk-adjusted returns compared to pure equity funds, making them suitable for SWP. The diversified nature of these funds helps in maintaining a steady income.

3. Multi-Asset Funds
Multi-asset funds invest across various asset classes like equity, debt, and gold. This diversification reduces the overall risk and enhances the stability of returns. They are ideal for investors looking for a mix of growth and income through SWP.

4. Conservative Hybrid Funds
Conservative hybrid funds invest predominantly in debt, with a smaller allocation to equity. This makes them less volatile and suitable for investors with a low-risk appetite who still want some equity exposure for growth.

5. Debt-Oriented Hybrid Funds
These funds primarily invest in debt instruments, with a small portion in equity. They offer stability and relatively lower risk, making them ideal for conservative investors seeking regular income through SWP.

Disadvantages of Index Funds for SWP
While index funds are popular for their low cost, they might not be the best choice for SWP. Here’s why:

1. Lack of Flexibility
Index funds strictly follow the market index. They don’t have the flexibility to avoid underperforming sectors or capitalize on emerging opportunities. This could lead to inconsistent returns, which is not ideal for SWP.

2. Market-Linked Returns
Since index funds replicate market indices, their returns are directly linked to market performance. During market downturns, the returns can be lower, affecting your SWP payouts.

3. No Active Management
Index funds are passively managed, meaning they don’t have fund managers actively making investment decisions. This can limit the fund's ability to manage risks and enhance returns.

Disadvantages of Direct Funds for SWP
Investing in direct funds might seem cost-effective due to lower expense ratios, but there are drawbacks, especially when setting up an SWP:

1. Lack of Professional Guidance
Direct funds don’t come with professional guidance. A Certified Financial Planner can provide personalized advice, regular reviews, and adjustments to your SWP based on changing financial goals or market conditions.

2. Risk of Inappropriate Fund Selection
Without expert guidance, you might choose funds that don’t align well with your SWP needs. This could lead to a mismatch between your income requirements and the fund’s performance.

3. Missed Rebalancing Opportunities
Regular rebalancing is crucial for maintaining the desired asset allocation in your portfolio. Direct investors might miss these opportunities, leading to suboptimal performance and affecting SWP payouts.

Strategy for a Successful SWP
To maximize the benefits of an SWP, consider the following strategies:

1. Start with a Sufficient Corpus
Ensure that you have a sufficient corpus to support your withdrawal needs without depleting the principal too quickly. A well-planned withdrawal rate, typically between 5% to 8% annually, can help sustain the SWP for a longer duration.

2. Choose the Right Withdrawal Rate
Set a withdrawal rate that matches your income needs and investment corpus. A higher withdrawal rate might lead to faster depletion of funds, while a lower rate might not meet your income needs.

3. Reinvest Surplus Income
If you don’t need the entire SWP amount immediately, consider reinvesting the surplus in a debt fund or other safe investment. This can help maintain the value of your corpus and extend the duration of your SWP.

4. Regularly Review Your SWP
Market conditions and your financial situation can change over time. Regularly review your SWP and make adjustments as needed. This might involve changing the withdrawal rate, switching funds, or even modifying your investment strategy.

5. Seek Professional Advice
Work with a Certified Financial Planner who can help you design and maintain an effective SWP strategy. They can provide personalized advice, ensuring that your SWP aligns with your long-term financial goals.

Finally
Selecting the right fund for an SWP involves careful consideration of various factors, including fund performance, risk, and post-tax returns. Avoid index and direct funds for SWP due to their limitations. Instead, focus on actively managed funds that align with your income needs and risk tolerance. Regularly review your SWP strategy and seek advice from a Certified Financial Planner to ensure that your plan remains on track for the long term.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8265 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 19, 2025

Money
I have invested Rs 50000 in Aditya Birla Sun life Psu equity fund direct growth in August 2024 .It gone down and am at a loss of around 7000 now ..should I continue and keep a watch or withdraw the amount .Kindly advice
Ans: You’ve invested Rs. 50,000 in a PSU-focused equity mutual fund (direct growth) in August 2024. You are currently facing a notional loss of around Rs. 7,000.

Let’s evaluate your concern with a 360-degree analysis. We’ll consider fund nature, risk, tenure, emotional behaviour, tax impact, and expert support.

We truly appreciate your initiative in seeking proper guidance. It shows a responsible investment mindset.

Let’s assess this decision from all angles.

 

Nature of Investment Chosen
You invested in a sector-specific equity fund.

 

Sector funds are very high-risk and concentrated.

 

PSU theme is based on government-owned businesses.

 

These funds follow a very narrow investment style.

 

When sector underperforms, your entire fund gets affected.

 

Even good companies may fall if the sector is weak.

 

Sector and Volatility
PSU stocks are affected by government policy decisions.

 

Market may react to budget, reforms, or geopolitical news.

 

In short term, PSU funds can show deep falls.

 

This is part of the risk-reward structure in such funds.

 

Volatility is not a mistake; it is expected.

 

If you knew this before investing, you need not worry now.

 

Investment Duration
You invested just 8 months ago.

 

Equity mutual funds need more time.

 

Especially sector funds may take 3 to 5 years minimum.

 

Judging performance in 8 months is not meaningful.

 

Markets have up and down cycles.

 

Short-term dips are not real losses unless you redeem.

 

Long holding gives your investment time to recover.

 

Notional Loss vs. Actual Loss
Rs. 7,000 loss is not permanent unless you withdraw.

 

Current value is only a temporary figure.

 

If you sell now, you book this loss forever.

 

If you hold, there’s chance to recover and grow.

 

Investors often panic and redeem at wrong time.

 

That’s a behavioural mistake, not a market mistake.

 

Direct Funds and Investor Decisions
You chose a direct plan.

 

Direct plans lack expert guidance.

 

You are making decisions alone.

 

Without a Certified Financial Planner, mistakes can happen.

 

Many direct investors redeem early due to fear.

 

Regular plans offer support from CFP-certified professionals.

 

A CFP helps in review, correction, and long-term strategy.

 

That small extra cost brings big long-term value.

 

Emotional Bias in Investing
Losses create fear in most investors.

 

Fear may lead to bad decisions.

 

With equity, this emotional control is critical.

 

Long-term wealth is only possible with patience.

 

You must separate emotions from money choices.

 

Take help of a CFP who brings calmness and objectivity.

 

Tax Implication (As Per New Rules)
You invested in August 2024.

 

If you redeem before August 2025, gains (or losses) are short-term.

 

Short-term capital gains tax is 20%.

 

If there’s a loss, it can be carried forward for future tax benefit.

 

But we don’t advise redeeming now just to record this loss.

 

Let the investment complete its full cycle.

 

Investment Goal and Purpose
Was there a clear goal for this investment?

 

If yes, when is the goal coming up?

 

PSU funds are not suitable for short-term needs.

 

If you need money within 1 year, it’s not ideal.

 

If it’s a long-term goal, then hold tight.

 

Invest according to your time horizon, not just fund return.

 

Diversification Matters
PSU equity funds are too narrow.

 

You should avoid putting large sums in one sector.

 

Diversify across multiple sectors and styles.

 

Multi-cap, flexi-cap or large-cap funds give better balance.

 

Keep PSU exposure limited, not core holding.

 

A well-diversified portfolio reduces mental stress too.

 

Review and Restructure
Sit with a Certified Financial Planner.

 

Review your full portfolio, not just one fund.

 

Restructure based on goals and risk tolerance.

 

Build a mix of funds with different styles and caps.

 

Avoid repeating mistakes like overexposure to sectors.

 

Common Investor Mistakes to Avoid
Don’t react to short-term loss.

 

Don’t check NAVs every day or week.

 

Don’t follow social media fund tips.

 

Don’t chase highest return or lowest NAV.

 

Don’t switch between funds too often.

 

Stay steady and follow your plan.

 

What Should You Do Now?
Do not redeem now.

 

Let the investment complete minimum 3–5 years.

 

Meanwhile, avoid adding more in this one sector.

 

Start investing gradually in diversified equity funds.

 

Take help from a CFP to guide and monitor.

 

Do a portfolio review every year.

 

Continue investing with patience and discipline.

 

Key Takeaways from Your Situation
Loss in 8 months is not unusual.

 

Sector funds are volatile by nature.

 

Your decision should be based on goals, not returns.

 

Avoid emotional reactions like panic redemption.

 

You must work with a qualified CFP for guidance.

 

Shift from direct funds to regular plan with MFD-CFP support.

 

Always diversify and follow asset allocation.

 

Stick to your long-term strategy for real wealth creation.

 

Finally
Your concern is valid and understandable.

 

But early redemption will lock the loss permanently.

 

Sector fund performance takes time to show up.

 

Stay invested and consult a CFP for next steps.

 

Your journey to wealth is not a sprint, it’s a marathon.

 

Continue with patience, proper planning, and expert guidance.

 

Right investment decisions are not based on past returns.

 

They are based on goals, risk capacity, and time.

 

You have already taken the first right step—asking the right questions.

 

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8265 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 19, 2025

Asked by Anonymous - Apr 18, 2025Hindi
Money
Dear Sir, IAM planning to Axis bank Bajaj Allianz pure stock fund, annual investment 1lac till 5 years, what are benefit out it Plz advise this a wise decision to invest. Thanks & Regards Mysore
Ans: You are planning to invest Rs. 1 lakh annually for 5 years in a pure equity mutual fund from a reputed AMC.

Let us assess your decision with a 360-degree view.

We will evaluate the benefits, risks, and alignment with your goals.

We will also check if this is a wise and suitable decision for you.

We appreciate your discipline in thinking long-term.

Let’s now explore this in detail.

 

Investment Approach
You are choosing an actively managed mutual fund.

 

This is better than passive index investing.

 

Actively managed funds aim to beat the market returns.

 

Professional fund managers analyse and pick quality stocks.

 

This is better than index funds, which just copy the market.

 

Index funds cannot avoid poor performing stocks.

 

Active funds adjust to changing market trends faster.

 

You also get risk management strategies in active funds.

 

Investment Tenure
You plan to invest for 5 years.

 

This is a decent time frame for equity mutual funds.

 

Equity funds can be volatile in the short term.

 

But over 5 years, chances of earning better returns improve.

 

Staying invested during ups and downs is key.

 

Compounding also works better when you stay longer.

 

Please try to extend beyond 5 years if possible.

 

Longer holding brings more tax efficiency and better growth.

 

Investment Amount
You are planning Rs. 1 lakh per year.

 

That’s Rs. 5 lakhs in 5 years.

 

Investing in lump sum or SIP both are fine.

 

SIP helps reduce the average cost per unit.

 

It also builds investment habit and removes timing worries.

 

If investing lump sum, divide into 4–5 tranches over months.

 

Risk Factors
Pure equity funds are linked to stock market performance.

 

They are affected by domestic and global events.

 

Short term can have negative or low returns.

 

But long term investors usually benefit more.

 

You should be mentally prepared for short-term losses.

 

Never panic or redeem early due to volatility.

 

Equity is not for those needing fixed or assured returns.

 

Patience is the most important quality here.

 

Taxation of Mutual Funds (As per New Rules)
If you sell before 1 year, gains are called short-term capital gains.

 

These are taxed at 20% as per new rule.

 

If you sell after 1 year, and gain above Rs. 1.25 lakh, tax is 12.5%.

 

Gains below Rs. 1.25 lakh are tax-free.

 

You can use the Rs. 1.25 lakh limit each financial year.

 

This makes mutual funds more efficient than many other options.

 

Insurance-cum-Investment Policies
If you also hold ULIP or LIC investment-linked plans, do review them.

 

Such policies often give low returns and high costs.

 

They mix insurance and investment in one product.

 

This is not suitable for long-term wealth creation.

 

You may consider surrendering those and switch to pure mutual funds.

 

Invest separately for protection (term plan) and wealth (mutual fund).

 

Role of a Mutual Fund Distributor with CFP
You mentioned a fund from a reputed AMC.

 

You may choose a Regular plan through a CFP-certified MFD.

 

A Certified Financial Planner gives goal-based planning.

 

They help you choose right asset allocation for your goals.

 

They guide during market cycles and emotional investing errors.

 

Regular funds include cost for their services.

 

Direct plans lack this support and guidance.

 

Many investors in direct plans take wrong decisions alone.

 

Regular plan with CFP gives personalised advice and reviews.

 

Asset Allocation & Diversification
Do not invest 100% in a single equity fund.

 

Diversify across 2–3 equity funds with different styles.

 

You can include large cap, flexi cap, or mid cap category.

 

This reduces risk from underperformance of any one fund.

 

Also keep part of your portfolio in short-term debt funds.

 

Debt funds help in emergencies or short-term needs.

 

They also reduce overall portfolio volatility.

 

Goal Alignment
What is the purpose of this investment?

 

Is it for retirement, child education, house down payment?

 

If you define the goal, planning becomes stronger.

 

You can choose fund types based on goal duration.

 

You will also know how much to invest each year.

 

This creates clarity and motivates regular investing.

 

Benefits of Your Decision
You are investing regularly for 5 years.

 

This is better than keeping money in savings or FD.

 

Mutual funds give higher growth potential than bank products.

 

Your money gets managed by professionals.

 

It helps you beat inflation in long term.

 

You don’t need to track stock market daily.

 

Low minimum investment and high liquidity are extra benefits.

 

You can withdraw anytime if needed.

 

Few Points to Remember
Review your investment once a year with a CFP.

 

Rebalance the portfolio based on goal changes.

 

Avoid timing the market or chasing top funds.

 

Stay away from hot tips or media hype.

 

Focus on consistent investing and patience.

 

Track fund performance with right benchmarks, not just NAV growth.

 

Final Insights
Your plan shows good financial discipline.

 

You have chosen a strong long-term wealth creation path.

 

Mutual funds can offer superior growth compared to many traditional tools.

 

Choosing actively managed funds is wise for better returns.

 

Take support of a CFP to make your journey smoother.

 

Diversify well and invest with clear purpose.

 

Stay consistent and avoid emotional decisions.

 

Wealth creation is a slow and steady process.

 

With right strategy, your goal will be achieved peacefully.

 

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Dr Upneet

Dr Upneet Kaur  |35 Answers  |Ask -

Marriage counsellor - Answered on Apr 19, 2025

Asked by Anonymous - Mar 18, 2025Hindi
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Relationship
My relationship started Four years ago and everything was fine My parents accepted him but his mother started creating problems over small things He is Jain and I understand that it is difficult for them to accept someone from a non-vegetarian family However his mother told my father that my entire family should stop eating nonveg and said many hurtful things She also said that I should only wear suits and follow their rules I have always lived a comfortable life where I never had to do any household chores but his mother told my parents that I need to learn everything I come from a wealthy family while his family is average, and I am not sure if I can adjust to that lifestyle His mother created a lot of drama for two years and now suddenly she is ready to accept me But I am afraid she might go back to her old ways after marriage I have never had to worry about financial issues but I know things might change if I marry him He has also lied to me a few times and when my parents visited his home and business his father avoided showing anything and made excuses which made my family suspicious
Ans: Hello mam.
I understand that it feels strange when someone changes suddenly so much like you said the boy's mother's attitude changed and now she is ready to accept you. Marriage is a big decision and it does not work only with love. It needs many other practical things to work. Like many compromises from both side, finances, acceptance, trust and respect. Think as much as you want before marriage a d take a good decision but after marriage you cannot change the things so easily.
Take some more time and get information on their business, thier family reputation, their relatives and neighbours. Only then take a decision. And leave the things upto your parents. They are much more experienced and have a much more willingness to see you happy.
Take care !
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Ramalingam

Ramalingam Kalirajan  |8265 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 19, 2025

Money
I m 40 yrs old father of 10 yrs daughter till date my investment is all in fixed assets and gold i m planning to do the job for till 55 my till date investment is around 1.5 crore i have liability of 45 lac need your advice on future investment i can invest upto 30k monthly looking forward for your advice???
Ans: You’re already doing very well. Rs. 1.5 crore saved is a great milestone. Also, planning investments till 55 is a very thoughtful step. Let us now see how you can create a future-proof financial plan.

I will look at it from all angles—your current investments, liabilities, risk, and future needs.

Let’s begin.

 

Current Financial Position: A Quick View

You have Rs. 1.5 crore in fixed assets and gold. That’s excellent.

 

You have liabilities of Rs. 45 lakh. It needs attention.

 

Your age is 40. You have 15 years to work more. Good time to plan.

 

You can invest Rs. 30,000 every month. That gives you strength.

 

You have a 10-year-old daughter. Education and marriage will need planning.

 

Where You Stand Today

Your savings are not diversified. All in fixed assets and gold.

 

Fixed assets don’t give monthly income. They are not liquid.

 

Gold does not beat inflation over long term. Return is moderate.

 

You do not seem to have any investment in equity mutual funds.

 

Your liability of Rs. 45 lakh is big. We need to handle it smartly.

 

Why Future Investments Must Be Balanced

Equity gives good long-term returns. It helps beat inflation.

 

Debt investments give stability. They are lower on risk.

 

Gold and fixed assets are slow to grow. Not great for wealth creation.

 

Mixing equity and debt works better. It balances growth and safety.

 

Mutual funds are ideal for this mix. Easy to manage. Fully regulated.

 

Your Monthly Investment Strategy – Rs. 30,000 SIP

Allocate Rs. 18,000 in diversified equity mutual funds.

 

Allocate Rs. 6,000 in hybrid mutual funds (mix of equity + debt).

 

Allocate Rs. 6,000 in short-term debt mutual funds.

 

This will give you growth, safety, and liquidity in the right balance.

 

Avoid direct stock picking. It needs time and skills.

 

Always invest through a Certified Financial Planner.

 

Why Actively Managed Funds Are Better Than Index Funds

Index funds blindly copy the market. No professional decision-making.

 

They don’t protect during market falls. No human judgment.

 

Active funds are managed by experts. They take smart calls.

 

Active funds have outperformed index funds over longer periods.

 

A Certified Financial Planner chooses right active funds based on your goals.

 

Why Regular Plans Are Better Than Direct Plans

Direct plans don’t give expert help. You are on your own.

 

One wrong choice can cost you years of returns.

 

Regular plans come with a qualified MFD backed by a Certified Financial Planner.

 

You get portfolio review, rebalancing, and tax planning support.

 

The guidance is worth much more than the small difference in cost.

 

Handling Your Liabilities – Rs. 45 Lakh

Check if this is home loan, personal loan or other type.

 

Home loans have tax benefit. No rush to close if interest rate is low.

 

Personal or business loans are expensive. Try to pre-pay slowly.

 

Use any lump sum inflow (bonus or maturity) to reduce such loans.

 

Do not stop SIPs to pre-pay loan. Balance both wisely.

 

Plan for Your Daughter’s Education and Marriage

She is 10 now. College after 7–8 years.

 

Education will need Rs. 20–30 lakh minimum. Start a goal-based SIP.

 

Invest Rs. 10,000 out of your monthly SIP for this goal.

 

Use equity mutual funds with long-term vision for this.

 

Marriage is a longer goal. Can be planned after education goal is on track.

 

Retirement at 55 – Let’s Plan Today

You will stop earning at 55. Your savings must last till 85–90.

 

You have 15 years to build retirement corpus.

 

Set aside Rs. 15,000 from your SIP for retirement.

 

Use equity and hybrid mutual funds for this.

 

From age 50 onwards, slowly reduce equity and move to safer assets.

 

Emergency Fund and Insurance Cover

Emergency fund must cover 6 months of expenses.

 

Keep this in liquid mutual funds. Avoid using FDs for this.

 

You must have a term life cover of 10–15 times your annual income.

 

Health insurance should be minimum Rs. 20–30 lakh for the full family.

 

Don’t depend only on company insurance.

 

Review Your Fixed Assets and Gold Holdings

Fixed assets have poor liquidity. Hard to sell in emergencies.

 

Try to reduce overexposure to gold and land.

 

Use part of these assets to repay loans or invest in mutual funds.

 

This way you unlock dead money for better returns.

 

Taxation Angle – Be Smart and Prepared

Long-term equity mutual fund gains above Rs. 1.25 lakh are taxed at 12.5%.

 

Short-term equity gains are taxed at 20%.

 

Debt mutual funds are taxed as per your income tax slab.

 

Don’t worry. With a Certified Financial Planner, taxes can be optimised.

 

Always plan redemptions. Don’t redeem blindly.

 

Rebalancing Your Portfolio Annually

Asset allocation will change with time. Rebalancing keeps it on track.

 

Review once a year. Not more.

 

Avoid switching funds too often. Let them grow.

 

Stay invested with discipline. That’s the only way wealth grows.

 

Behavioural Discipline is the Key

Don’t panic in market falls. Stay invested.

 

Avoid checking returns too often. It creates stress.

 

Let your Certified Financial Planner handle strategy.

 

You focus on earning and living well.

 

Final Insights

Your savings so far are impressive. But too tilted towards fixed assets.

 

Equity mutual funds will give your portfolio much-needed growth.

 

A Rs. 30,000 monthly SIP will change your financial future.

 

Don't wait. Start this SIP immediately.

 

Invest through a Certified Financial Planner. Review yearly.

 

Focus on goals: daughter’s education, marriage, and your retirement.

 

Don’t chase returns. Follow a process.

 

Protect your family with insurance. Keep emergency fund intact.

 

Wealth creation is not about luck. It is about discipline and planning.

 

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8265 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 19, 2025

Asked by Anonymous - Apr 18, 2025Hindi
Listen
Money
Dear sir, I have taken floating rate a plot loan from LIC HFL. Recently the ROI was increased from 8.75% to 8.85% immediately because of increase in bank rate. However the ROI is not reduced despite multiple repo rate changes recently. When asked the reply is - "We are yet to receive the updates from our CO with regard to changes in ROI. As soon as the ROI is changed automated message will be sent all customers."
Ans: You're absolutely right in expecting fairness when the repo rate goes down. Let me guide you step-by-step on what’s happening and what you can do next.

 

Understanding the Floating Rate Loan from LIC HFL

Your loan is linked to LIC HFL’s internal benchmark, not directly to RBI’s repo rate.

 

When RBI increases the repo rate, lenders are quick to increase your rate.

 

But when RBI reduces it, lenders often delay passing on the benefit.

 

This delay happens because LIC HFL’s Cost of Funds Based Lending Rate (COFBR) is not automatically updated.

 

COFBR is not as transparent or responsive as the external benchmark linked rates used by banks (like RLLR/EBLR).

 

Why LIC HFL May Not Reduce Your Rate Immediately

LIC HFL is an HFC (Housing Finance Company), not a bank.

 

They don’t follow the repo-linked lending rate (RLLR) system.

 

Their interest rates are based on internal policies and board decisions.

 

They may wait for quarterly reviews before passing on repo rate cuts.

 

Why the Communication Seems Delayed or Vague

You are told “waiting for CO update” – this is standard response.

 

In truth, they are buying time and not acting promptly.

 

Customers feel helpless because HFCs are not as strictly regulated as banks in this area.

 

What You Can Do Now: Action Steps

Write a formal email to the customer care, branch, and grievance officer. Request a clear explanation.

 

Ask them to share the latest COFBR and how your ROI is being calculated.

 

Use this format: “As a floating rate loan borrower, I am entitled to revised rate benefit. Kindly update my ROI in line with latest changes and share the effective date.”

 

If no proper response in 15 days, escalate it to NHB (National Housing Bank).

 

NHB is the regulator for HFCs like LIC HFL. You can file a complaint online.

 

Link: https://grids.nhbonline.org.in

 

Consider Switching the Loan to a Bank

If LIC HFL does not reduce rate, think of a loan balance transfer.

 

Switch to a repo-linked loan from a public or private sector bank.

 

These are directly linked to RBI’s repo rate. Very transparent.

 

You may have to pay small processing charges. But savings can be big.

 

Let a Certified Financial Planner help you calculate real benefit.

 

Check These Before Transferring

What’s the remaining tenure of your loan?

 

Is there any prepayment penalty? Usually none for floating loans.

 

Will new bank offer lower rate? Ask for a sanction letter before deciding.

 

Finally

LIC HFL may delay, but they cannot avoid revising your rate forever.

 

You are a responsible borrower. You deserve fair rate benefits too.

 

Keep your communication professional and written.

 

If they still delay, go ahead and move to a better lender.

 

Always have a Certified Financial Planner guide your debt and investments.

 

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

...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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