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Should I switch my current Mutual Fund investments?

Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 03, 2025

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
SANDEEP Question by SANDEEP on Apr 02, 2025Hindi
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I am currently investing 28000/- in following mf . Kindly suggest me whether i am investing in right MF or not. Suggest if to be switched in to which MF HDFC LARGE AND MID CAP FUND - REGULAR PLAN - GROWTH SIP Amount 5000 HDFC NIPPON INDIA SMALL CAP FUND - GROWTH PLAN - GROWTH OPTION SIP Amount 5000 HDFC LARGE CAP FUND - REGULAR PLAN - GROWTH SIP Amount 3000 HDFC FOCUSED 30 FUND - REGULAR PLAN - GROWTH SIP Amount 3000 HDFC MID-CAP OPPORTUNITIES FUND - GROWTH OPTION SIP Amount 3000 ICICI PRUDENTIAL INFRASTRUCTURE FUND - GROWTH SIP Amount 3000 HDFC FLEXIVAP FUND - GROWTH SIP Amount 4000 CONTRA FUND =4000 PLEASE REVIEW

Ans: Your investment approach shows a good mix of large, mid, and small-cap funds. However, there are areas where adjustments can improve risk management and returns.

Review of Existing Portfolio
Large Cap Exposure (Rs 3,000/month)

Large-cap funds offer stability.

The allocation here is low compared to mid and small caps.

A slight increase may help balance volatility.

Large & Mid Cap Exposure (Rs 5,000/month)

This fund gives exposure to both stable and growth-oriented stocks.

Keeping this allocation is fine.

Mid Cap Exposure (Rs 3,000/month)

Mid-cap funds can give high returns but are volatile.

Exposure is reasonable but should not be increased further.

Small Cap Exposure (Rs 5,000/month)

Small caps have high growth potential but also high risk.

Reducing this allocation slightly may help manage risk.

Focused Fund (Rs 3,000/month)

These funds hold fewer stocks, increasing concentration risk.

If risk appetite is low, consider switching to a more diversified fund.

Infrastructure Fund (Rs 3,000/month)

Thematic funds like this are sector-specific.

These are cyclical and may not perform consistently.

If diversification is a priority, this can be switched to a multi-sector fund.

Flexi Cap Exposure (Rs 4,000/month)

Flexi-cap funds offer flexibility across market caps.

This is a good choice and can be continued.

Contra Fund (Rs 4,000/month)

Contra funds follow a contrarian strategy, buying undervalued stocks.

These are good for long-term investing.

Keeping this allocation is fine.

Suggested Adjustments
Reduce small-cap allocation to Rs 3,000/month.

Increase large-cap allocation to Rs 5,000/month.

Consider switching out of the infrastructure fund to a more diversified fund.

If risk appetite is moderate, shift from focused fund to a flexi-cap or large & mid-cap fund.

These changes will improve diversification, reduce risk, and maintain growth potential.

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  |9317 Answers  |Ask -

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

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Hi, My name is Madhur and i am working in Private Job. I am regularly investing through SIP in below Mututal Fund from last 2 years and want to continue for 10-12 years. Please suggest if my choice of MF is correct or now. I am ready to take risk : Axis Bluechip Fund - GR 5000 Axis Long Term Equity Fund - GR 5000 Axis Mid Cap - GR 3000 DSP Midcap Fund - Reg GR 3000 ICICI Prudential Technology - GR 5000 Invesco India Midcap Fund - GR 3000 Kotak Emerging Equity Fund - GR - 3000 Kotak Flexicap Fund - GR 2500 Mirae Asset Emerging Bluechip Fund - GR 2500 Nippon India Pharma Fund - GR 5000 SBI Flexicap Fund - GR - 5000 Tata Digital India Fund - GR 5000
Ans: Hi Madhur,

It's commendable that you have been diligently investing through SIPs in mutual funds. Your dedication to growing your wealth over the next 10-12 years is inspiring. Let’s take a detailed look at your mutual fund portfolio and evaluate its alignment with your goals and risk tolerance.

Assessing Your Current Mutual Fund Portfolio
You have a diverse range of mutual funds, each with its unique investment strategy and focus. Here’s a breakdown of your current investments:

Bluechip Funds
Bluechip funds invest in large-cap companies known for their reliability and stable performance. These companies typically have strong financials and a proven track record. Bluechip funds are less volatile compared to mid-cap or small-cap funds, making them a relatively safer option within equity investments.

Mid-Cap Funds
Mid-cap funds invest in medium-sized companies with high growth potential. These funds can provide substantial returns, but they also come with higher risk and volatility. They are suitable for investors with a longer investment horizon and a higher risk appetite.

Flexi-Cap Funds
Flexi-cap funds have the flexibility to invest across large-cap, mid-cap, and small-cap stocks. This flexibility allows fund managers to adapt to market conditions, potentially optimizing returns. These funds offer a balanced approach to risk and reward.

Sectoral Funds
Sectoral funds focus on specific sectors such as technology or pharmaceuticals. While these funds can offer high returns, they are also subject to sector-specific risks. They should be a smaller part of a diversified portfolio to mitigate risk.

Evaluating the Diversification
Your portfolio includes a mix of bluechip, mid-cap, flexi-cap, and sectoral funds. This diversification helps in spreading risk across different market segments. However, a few adjustments can further optimize your portfolio:

Concentration in Mid-Cap Funds
You have significant investments in mid-cap funds. While these funds can provide high returns, they also come with higher volatility. Ensure that the proportion of mid-cap funds aligns with your risk tolerance and investment horizon.

Exposure to Sectoral Funds
Investments in technology and pharmaceutical funds indicate a high sector-specific exposure. These sectors can be volatile and cyclical. Consider limiting sectoral exposure to avoid excessive risk.

Flexi-Cap Funds
Flexi-cap funds offer the benefit of dynamic allocation across market caps. These funds can adapt to changing market conditions, making them a valuable part of your portfolio. Ensure that your investment in flexi-cap funds is balanced with other fund types.

Recommendations for Portfolio Optimization
Review Sectoral Fund Allocation
While sectoral funds can offer high returns, they also carry sector-specific risks. Ensure that your exposure to these funds does not exceed a comfortable level. Diversify further if needed to mitigate risk.

Consider Actively Managed Funds
Actively managed funds have the potential to outperform index funds. Skilled fund managers can make strategic decisions to maximize returns. Despite higher fees, actively managed funds often provide better returns due to their flexibility and professional management.

Increase SIP Contributions
Regularly increasing your SIP contributions can significantly enhance your portfolio’s growth. As your income rises, consider increasing the amounts you invest in each SIP. This approach leverages the power of compounding over time.

Disadvantages of Index Funds
Index funds passively track a market index and aim to replicate its performance. While they have lower fees, they also have limitations:

Lack of Flexibility: Index funds cannot adapt to changing market conditions or make strategic adjustments.

Potential for Lower Returns: Actively managed funds often outperform index funds due to active stock selection and market analysis.

Benefits of Investing Through a Certified Financial Planner
While direct funds have lower expense ratios, investing through a Certified Financial Planner (CFP) provides several advantages:

Expert Guidance: CFPs offer personalized advice tailored to your financial goals and risk tolerance.

Holistic Financial Planning: A CFP provides comprehensive financial planning, including tax planning, retirement planning, and risk management.

Ease of Management: Investing through a CFP ensures regular monitoring and rebalancing of your portfolio, keeping it aligned with your objectives.

Conclusion
Your commitment to long-term investing through SIPs is commendable. By reviewing your sectoral fund allocation, considering actively managed funds, and regularly increasing your SIP contributions, you can further optimize your portfolio. Engaging with a Certified Financial Planner will provide you with expert guidance and ensure your investments remain aligned with your financial goals. Keep up the excellent work in securing your financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Dev

Dev Ashish  | Answer  |Ask -

MF Expert, Financial Planner - Answered on Sep 30, 2023

Asked by Anonymous - Sep 29, 2023Hindi
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Hi..I have invested in in below given MF and my future target is 50 Lacs + in next 10 yrs. My investments are as below: 1. Tata Small Cap Fund Reg-G - Rs. 2000/- monthly 2. Canara Robeco Small Cap Fund Reg-G - Rs. 1000/- monthly 3. ICICI Prudential Value Discovery Fund- Rs. 2000- monthly 4. ICICI Prudential Bluechip Fund - Direct Plan - Growth - Rs. 2000- monthly Please suggest if I have selected right MF or I need to add/ switch to other best MF if any. Thank you.
Ans: To reach Rs 50 lakh in 10 years, you need to invest about Rs 21-23,000 per month assuming 11-12% average portfolio returns. Since no data about existing investments is provided, and given that you are doing a total of Rs 7000 per month in SIPs, there is first of all a need to increase your monthly investments to the required amount.

Having said that, you don't need so many schemes to invest Rs 20-25,000 per month. Just having a couple of schemes (like largecap index funds, and flexicap funds) would be sufficient.

Note (Disclaimer) - As a SEBI RIA, I cannot comment on specific schemes/funds that are provided or asked for in the questions in the platform. And the views expressed above should not be considered professional investment advice or advertisement or otherwise. No specific product/service recommendations have been made and the answers here are for general educational purposes only. The readers are requested to take into consideration all the risk factors including their financial condition, suitability to risk-return profile and the like and take professional investment advice before investing.

..Read more

Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

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

Asked by Anonymous - Apr 13, 2024Hindi
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Sir I have investing right now Parag Parikh flexi cap 2k,Nifty Total Market Index Fund 2k,ICICI Prudential Multi Cap Fund 1K,Nippon India Small Cap 1k,Tata Digital fund 500.Request your advice am I right in track for investing MF.
Ans: It's great to see your proactive approach to investing in mutual funds. Let's review your current portfolio and provide some insights:

Parag Parikh Flexi Cap: This fund offers diversification across market segments and has a flexible investment approach. It's a good choice for long-term growth potential.
Nifty Total Market Index Fund: Investing in an index fund provides broad market exposure and low expense ratios. It's suitable for passive investors seeking market returns.
ICICI Prudential Multi Cap Fund: This fund invests across large, mid, and small-cap stocks, providing diversification and potential for higher returns. It complements your portfolio well.
Nippon India Small Cap: Small-cap funds have the potential for high growth but come with higher volatility. Ensure you're comfortable with the risk associated with this fund.
Tata Digital Fund: Investing in thematic funds like digital funds can offer exposure to high-growth sectors. However, they tend to be more volatile and may not suit all investors.
Overall, your portfolio seems well-diversified across market segments and investment styles. However, it's essential to regularly review your investments, monitor fund performance, and adjust your portfolio as needed based on changes in your financial goals and market conditions.

Consider consulting with a Certified Financial Planner for personalized advice tailored to your specific needs and goals. They can help ensure that your investment strategy aligns with your long-term financial objectives and risk tolerance.

..Read more

Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Mar 06, 2025

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i am currently investing 28000 per month in MF. kindly check whether i am investing in right fund or should i change th fund . My vision is to invest for another 10 year. HDFC Large and Mid Cap Fund (G) 5,000 Nippon India Small Cap Fund (G) 5,000 HDFC Large Cap Fund - Regular (G) 3,000 HDFC Focused 30 Fund (G) 3,000 Nippon India Power & Infra Fund (G) 3,000 HDFC Mid-Cap Opportunities Fund (G) 3,000 ICICI Pru Infrastructure Fund - (G) 3,000 Invesco India Infrastructure Fund 3,000
Ans: Your portfolio consists of multiple actively managed funds across different categories. Let's evaluate your current investment choices and suggest any improvements based on diversification, overlap, and risk-return potential.

Strengths of Your Portfolio
Long-Term Investment Vision: You plan to invest for another 10 years, which allows compounding to work in your favor.

Actively Managed Funds: Actively managed funds have the potential to outperform the market over the long term.

Exposure to Different Market Caps: Your portfolio includes large-cap, mid-cap, and small-cap funds, offering balanced exposure.

Sector-Specific Allocation: You have exposure to infrastructure and power sectors, which can generate high returns in the long run.

Concerns in Your Portfolio
Overlapping Fund Selection: Many of your funds have a similar investment strategy, leading to duplication of holdings.

Excessive Sectoral Allocation: Your portfolio has three sectoral funds, which increases risk if the sector underperforms.

Too Many Funds: Investing in too many funds does not always improve diversification. It can reduce the impact of outperforming funds.

Multiple Funds from the Same AMC: Having multiple funds from a single asset management company (AMC) may limit diversification.

Diversification Analysis
1. Large-Cap and Large & Mid-Cap Funds
You have allocated funds to both large-cap and large & mid-cap categories.
Large-cap funds provide stability, while large & mid-cap funds offer a balance of growth and safety.
Instead of multiple funds in this category, a single well-performing large & mid-cap fund is sufficient.
2. Mid-Cap and Small-Cap Funds
Mid-cap and small-cap funds can provide high returns, but they are also highly volatile.
Your portfolio has both mid-cap and small-cap funds, which is good for long-term growth.
However, holding too many funds in this category can lead to portfolio overlap.
3. Focused Fund Allocation
Focused funds invest in a limited number of stocks, which can increase risk.
Holding a single focused fund is better than investing in multiple funds with a similar strategy.
4. Sector-Specific Investments
Investing in sectoral funds can generate high returns if the sector performs well.
However, sectoral funds are highly volatile and risky compared to diversified funds.
Your portfolio has too much exposure to infrastructure and power sectors, increasing concentration risk.
Instead of multiple sectoral funds, a well-diversified flexi-cap fund can provide better risk-adjusted returns.
Recommended Portfolio Adjustments
Reduce Fund Overlap: Keep a single large & mid-cap fund instead of multiple large-cap and mid-cap funds.

Reduce Sectoral Exposure: Limit sector-specific investments to a smaller portion of your portfolio.

Consolidate Similar Funds: Instead of multiple mid-cap and small-cap funds, choose one well-performing fund from each category.

Increase Allocation to Diversified Equity Funds: Flexi-cap and multi-cap funds can provide better long-term stability.

Final Insights
Your long-term investment approach is well planned.
However, excessive sectoral allocation and fund duplication can reduce efficiency.
Consolidating similar funds and increasing exposure to diversified funds will improve portfolio performance.
Reducing the number of funds will also make portfolio tracking easier.
Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Mar 06, 2025

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I am currently investing 28000/- in following mf . Kindly suggest me whether i am investing in right MF or not. Suggest if to be switched in to which MF HDFC LARGE AND MID CAP FUND - REGULAR PLAN - GROWTH SIP Amount 5000 HDFC NIPPON INDIA SMALL CAP FUND - GROWTH PLAN - GROWTH OPTION SIP Amount 5000 HDFC LARGE CAP FUND - REGULAR PLAN - GROWTH SIP Amount 3000 HDFC FOCUSED 30 FUND - REGULAR PLAN - GROWTH SIP Amount 3000 NIPPON INDIA POWER AND INFRA FUND- GROWTH PLAN-GROWTH OPTION SIP Amount 3000 HDFC MID-CAP OPPORTUNITIES FUND - GROWTH OPTION SIP Amount 3000 ICICI PRUDENTIAL INFRASTRUCTURE FUND - GROWTH SIP Amount 3000 INVESCO INDIA INFRASTRUCTURE FUND - GROWTH SIP Amount 3000
Ans: Your portfolio consists of multiple actively managed funds across different categories. While it has a good mix of large-cap, mid-cap, and small-cap funds, there are areas where adjustments can improve diversification and risk management.

Strengths of Your Portfolio
Your long-term investment horizon of 10 years allows for compounding and wealth creation.

You have exposure to different market caps, which provides a balance of stability and growth.

Actively managed funds can generate higher returns compared to passive funds.

Concerns in Your Portfolio
You are holding too many funds, leading to unnecessary duplication. More funds do not always mean better diversification.

Your portfolio has excessive allocation to sectoral funds, which increases concentration risk. If the sector underperforms, your returns will be affected.

Some funds have overlapping holdings, reducing the overall diversification benefit.

You have multiple funds from the same asset management company, limiting exposure to different investment styles.

Recommended Portfolio Adjustments
Retain a well-performing large & mid-cap fund instead of holding multiple funds in this category.

Maintain exposure to small-cap or mid-cap funds but avoid holding multiple funds with similar strategies.

A single focused fund is sufficient. Too many concentrated portfolios increase risk without adding significant benefits.

Reduce exposure to sector-specific funds. While sectoral funds can deliver high returns, they carry higher volatility and depend heavily on the sector’s performance. A more diversified approach is recommended.

Instead of multiple funds in the same category, consolidate into a few high-quality diversified equity funds that provide stable long-term growth.

Include a flexi-cap fund to enhance diversification and give fund managers the flexibility to invest across market capitalizations.

Final Insights
Your investment approach is well-structured, but simplifying your portfolio will improve returns and make it easier to manage.

Reducing sectoral allocation and consolidating overlapping funds will improve efficiency and stability.

A diversified and well-balanced portfolio with a mix of large-cap, mid-cap, small-cap, and flexi-cap funds will ensure long-term growth with controlled risk.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

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

..Read more

Janak

Janak Patel  |53 Answers  |Ask -

MF, PF Expert - Answered on Mar 06, 2025

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I am currently investing 28000/- in following mf . Kindly suggest me whether i am investing in right MF or not. Suggest if to be switched in to which MF HDFC LARGE AND MID CAP FUND - REGULAR PLAN - GROWTH SIP Amount 5000 HDFC NIPPON INDIA SMALL CAP FUND - GROWTH PLAN - GROWTH OPTION SIP Amount 5000 HDFC LARGE CAP FUND - REGULAR PLAN - GROWTH SIP Amount 3000 HDFC FOCUSED 30 FUND - REGULAR PLAN - GROWTH SIP Amount 3000 NIPPON INDIA POWER AND INFRA FUND- GROWTH PLAN-GROWTH OPTION SIP Amount 3000 HDFC MID-CAP OPPORTUNITIES FUND - GROWTH OPTION SIP Amount 3000 ICICI PRUDENTIAL INFRASTRUCTURE FUND - GROWTH SIP Amount 3000 INVESCO INDIA INFRASTRUCTURE FUND - GROWTH SIP Amount 3000
Ans: Hi Sandeep,

You have mentioned a total of 8 MF schemes for your investment of 28000 per month.
As details regarding your goal and requirement is not available, it is difficult to judge the overall portfolio from that point of view.
The schemes mentioned though are different names but will have a lot of overlap especially when you consider large cap stocks in their portfolio - HDFC Large & Mid / HDFC Large / HFDC Focused 30 and even the 3 Infra funds.

I believe the idea was to diversify your portfolio thru multiple schemes and if so, that is not really achieved.

Assuming you want to invest for over 10 year period, I suggest you keep your portfolio relatively simple with 4-5 schemes - 1 large cap (6000 in HDFC Large is ok), 1 Mid cap (6000 in HDFC Mid-cap or Motilal Oswal Midcap), 1 Small Cap (6000 in Nippon Small cap is ok) and 1 Infra (as you have shown inclination to Infra, 4000 in ICICI Pru Infra is ok) and add 1 Flexicap (6000 in Parag Parikh Flexicap which also has some overseas exposure). This will provide good diversification and less overlap.

This will provide good diversification and asset allocation across market caps.

Thanks & Regards
Janak Patel
Certified Financial Planner.

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 03, 2025

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Hello sir. I'm meghasai . I'm 28 years old. I'm a photographer and work in couple of other professions part time. I have 75 lakh in mutual funds and stocks. 2.8 cr in Fd and bonds. My question should i continue to invest in stocks or let the 75 lakh corpus grow . I'm looking to renovate my house should i go for home loan or Use the funds which around 35 lakhs. Some banks say they don't provide home loan for renovation. They ask me to go for loan on property which is around 9.1 pa. One of my frnd suggested for over draft loan is that better My monthly expenses are around 10k. How should i plan for further for retirement and family
Ans: You’ve built significant assets at a young age. That shows discipline and potential. Now let’s work through your current dilemmas—whether to continue investing in stocks, how to renovate your house, and how to plan for retirement and family goals—with a full 360-degree financial roadmap tailored to you.

Evaluating Your Existing Asset Base
You currently hold:

Rs 75 lakh in equity mutual funds and stocks

Rs 2.8 crore in fixed deposits and bonds

Monthly expenses around Rs 10,000

This gives you a total asset base of roughly Rs 3.55 crore. Your income is diversified, including part-time work and photography. That is an excellent start. With low expenses and substantial safety capital, you have strong financial freedom. Now the question is how to best allocate these assets for growth, liquidity, and future goals.

Should You Continue Investing in Stocks?
You have Rs 75 lakh in equity. A key goal is to preserve growth potential while managing risk.

Equity Exposure – Why You Should Continue With Actively Managed Funds

Equity is the best long-term engine for wealth.

Actively managed funds adjust to market cycles and protect downside.

Index funds mirror the market and don’t adjust in downturns.

Direct equity investing needs expert timing; it’s risky alone.

A CFP and MFD can guide portfolio rebalancing and prevent emotional mistakes.

Managing Risk With Equity Allocation

Keep equity exposure between 20%–30% of total assets (~Rs 70–100 crore).

This means Rs 75 lakh is fine, but do not increase much beyond that.

Invest new money via SIP into diversified equity funds, not small concentrated bets.

Rebalance annually to ensure equity stays within your comfort zone.

Diversify Within Equity

Mix large-cap, mid-cap, and diversified equity mutual funds.

Avoid too much concentration on one theme or sector.

Use regular mutual fund plans. This ensures proper guidance and higher discipline.

House Renovation Strategy – Use Cash or Borrow?
Renovation cost is estimated around Rs 35 lakh. You have 2.8 crore in liquidity. You have several financing options to consider.

Option A – Use Your Own Funds

Using Rs 35 lakh from FD or bonds avoids paying interest.

You can immediately complete renovation without dependency.

However withdrawing introduces liquidity risk and missed interest.

After renovation, you should rebuild your safety reserves gradually.

Option B – Take an Overdraft or Home Improvement Loan

Overdraft against property allows pulling funds as needed.

Interest is only charged on withdrawn amount.

Rates on OD are often lower than personal loan rates.

You retain interest-earning capacity on unused portion.

However, banks may freeze OD if property has other loans.

Option C – Home Loan for Purpose

Some banks allow project loan or second home loan.

Interest rates are lower than personal loans.

Requirement on borrower income may apply.

Not every bank offers renovation loan separately.

Which Option to Choose?

If renovating with your own funds doesn’t hurt liquidity, using your cash is simplest.

If this reduces your buffer excessively, consider OD facility on property.

Compare interest rates: OD vs home improvement loan.

Choose OD if interest cost is low and buffer remains intact.

Consult your CFP to review interest savings vs buffer risk.

Retirement and Family Planning Roadmap
You are 28 years old. You have a long horizon—32 more years till age 60. You should access this time for wealth creation with multi-goal structure.

Define Key Goals
Home renovation – immediate

Retirement corpus – 32 years away

Family planning – marriage or children, mid-term

Emergency fund – always

Goal 1: House Renovation (Near-Term)
Funded through own cash or OD, no RBI or bank EMIs

After renovation, ensure you still have 6–9 months’ expenses in liquid funds

Goal 2: Retirement Corpus (Long-Term)
You need to build a corpus that can deliver sustainable income or lump sum in 32 years.

How much should you invest now?

You have Rs 75 lakh in equity and Rs 2.8 crore in low-return assets

Convert part of your FD portfolio into growth assets with equity exposure to beat inflation

Suggested Allocation

Remain equity exposure at 25% of total assets (~Rs 1 crore in equity).
Thus, increase equity exposure gradually from current Rs 75 lakh to Rs 1 crore.

Over 32 years, equity returns compound significantly and offset inflation

Monthly Investments

Open a systematic investment plan (SIP) of Rs 50,000 in a diversified equity fund (regular plan)

Add to this from future income increments or rental earnings

Smaller SIPs are less effective over time

Asset Allocation Timeline

Maintain 65% equity, 35% debt/hybrid for long term

Rebalance annually to maintain this ratio

As retirement approaches (last 5 years), reduce equity exposure below 50%

Why Active Funds?

In 32 years, markets will face cycles

Actively managed funds adapt to downturns

Direct investing or index tracking denies you this support

Higher discipline and review via CFP and regular fund is helpful

Goal 3: Family Planning
If you plan marriage or children in 5–10 years, that is a mid-term goal.

Recommended Strategy

Build a separate corpus worth Rs 25–30 lakh

Use a mix of hybrid and short-duration debt funds

Start SIP of Rs 10,000 monthly for 8–10 years

Gradually shift to debt allocation 3 years before marriage/family plan

Keep goals separate to avoid liquidity misalignment

Your CFP can help structure separate folios for each goal and rebalance automatically.

Goal 4: Emergency Fund (Safety Foundation)
Even after spending Rs 35 lakh on renovation, maintain adequate reserves.

Ideal Emergency Fund Size

Monthly expenses are Rs 10,000 only

Target a buffer of Rs 2–3 lakh in liquid funds

Use ULTRA short or liquid mutual funds for easy access

Keep buffer only for emergencies; do not use for investing

Improving Asset Efficiency
You have large FD and bonds; they are low-yielding instruments. We must make this capital work smarter.

Phased Reallocation Plan

Let FDs mature gradually over 2–3 years

Upon maturity, reallocate funds into:

Equity (to reach 25% exposure)

Debt/hybrid funds for balance

Short-duration funds for flexibility

This keeps your portfolio growth-oriented without disrupting timeline.

Tax Considerations

Debt funds attract taxed gains; hybrid slightly less

Long-term holding reduces tax bite

Plan asset switches via a CFP to minimise tax impact

Risk and Insurance Review
As a self-employed individual, you must ensure protection against uncertainty.

Reassure Coverage

Term insurance for yourself with sufficient cover

Health insurance for you (and family if applicable)

Property insurance for your house

There's no need for ULIP, endowment, or annuity products. These are expensive and underperform. Keep insurance separate from investments.

Portfolio Review and Rebalancing Discipline
Your strategy spans 32 years, with multiple goals. Tracking is essential.

Annual Review Checklist

Rebalance asset mix (equity vs debt/hybrid)

Review progress toward renovation, retirement, and family goals

Adjust SIP amounts based on income changes

Redeploy matured FDs per plan

Check insurance coverage adequacy

Your CFP acts as a guide to keep you on track and counter emotional decisions.

Behavioral Discipline in Volatile Markets
Equity markets will fluctuate. Be prepared.

Do not panic-sell during steep corrections

Use downturns to deploy new SIPs or lumpsum expansions

Regular fund plans and CFP support protect against impulsive moves

Over time, disciplined investing outperforms short-term gains chasing

Tax Efficiency and Regulatory Updates
Your equity investments fall under new tax rules. Keep these in mind:

LTCG above Rs 1.25 lakh taxed at 12.5%

STCG taxed at 20%

Debt fund payouts taxed per your income slab

Timing of switches and redemptions impacts tax burden

Your CFP can plan withdrawals optimally to reduce tax incidence.

Tracking and Reporting
Set up a basic goal tracking document:

Renovation: tracked via cash or OD withdrawals

Retirement: target corpus value vs current investments

Family goals: progress toward Rs 25–30 lakh corpus

Buffer fund: maintained in liquid fund

Review this semi-annually with your CFP. Adjust strategy depending on performance, income, and changes.

Final Insights
You are at an enviable position financially. You have strong assets, low liabilities, and low expenses. The task now is to direct these assets sensibly:

Keep equity exposure at around 25% and invest via SIPs

Use Rs 35 lakh cash for renovation if buffer permits

If buffer is tight, use overdraft against property rather than personal loan

Build retirement and family funds via structured SIPs and balanced asset allocation

Phase out FDs to unlock returns and maintain solvency

Maintain emergency fund in liquid instruments

Monitor and rebalance yearly

Maintain robust insurance protection

Use CFP support regularly to guide, adapt, and manage behavioural risks

Following this structured, goal-linked roadmap ensures you can renovate your home, build a secure family future, and create lasting wealth.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 03, 2025

Asked by Anonymous - Jul 02, 2025Hindi
Money
Dear FA, I am 35 years old lady and single parent of a 5 years old kid. My take home salary is 75k and a widow pension 3k, so total my income is 78k monthly. I have a home loan of 10Lacs of 3 years Expenditure: 1) Spending 30k/month as EMI 2) 90k School fee/year 3) 60k/ year maintainance of my flat FD savings has 45Lac in SBI, another 4 Lacs in FD, 2 lacs in liquid fund and one RD of Rs.2500 per month in Post Office and recently started investing in two SIPs, 10k each. Each month i can save hardly 15k after all expenditure. Sir, please guide me how i can save more and where i should invest so that after 10- 15 years i can reach 1 crore. Your suggestion will be highly appreciated. Thank You
Ans: At 35 years old, your focus on saving towards a corpus of Rs. 1 crore in the next 10–15 years is both practical and achievable. Let us go through a structured, 360-degree plan to increase your savings, optimise investments, and create a clear path to your goal.

Understanding Your Current Financial Position
Here is a concise breakdown of your current finances:

Monthly Income: Rs. 75,000 (salary) + Rs. 3,000 (widow pension) = Rs. 78,000

Home Loan: Rs. 10 lakh remaining, EMIs of Rs. 30,000 per month for 3 years

Annual School Fee: Rs. 90,000

Flat Maintenance: Rs. 60,000 per year

Fixed Deposits: Rs. 45 lakh in SBI FD + Rs. 4 lakh in another FD

Liquid Fund: Rs. 2 lakh

Recurring Deposit: Rs. 2,500 per month at Post Office

SIPs: Started two SIPs of Rs. 10,000 each per month

Monthly Savings Surplus: About Rs. 15,000 after expenses

You have commendable investments and savings in place. You have loan, insurance, corpus, and savings clarity. Now, we will focus on improving savings by optimising these assets, curbing expenses where possible, and ensuring every rupee works for your Rs. 1 crore target.

Building a Healthy Budget and Cash Flow Plan
Breakdown of monthly outflow

EMI: Rs. 30,000

Flat maintenance + school fees average out to Rs. 12,500/month

Household expenses take up the remaining Rs. 20,500 approximately

This leaves you with Rs. 15,000 in savings

Look for expense savings

Can school and flat expenses be crunched? Evaluate each line item

Is there scope to reduce utilities, groceries, or subscriptions?

Even saving Rs. 3,000–5,000 monthly helps boost investible amount

Accelerating current SIP setup

You are investing Rs. 20,000 monthly in mutual funds

Aim to increase this to Rs. 30,000 by gently reducing less productive instruments

Optimising FD and liquid investments

FDs earn low interest and lack tax efficiency

TDS is deducted regularly, reducing liquidity

Liquid and short-term funds can give better post-tax returns

Instead of immediately breaking all FDs, start by allocating future maturing FD amounts smartly

You are already saving; now let us direct savings more efficiently toward your Rs. 1 crore target.

Short-Term Goal: Clear the Home Loan Smartly
The home loan EMI of Rs. 30,000 per month occupies a large space. You will complete it in 3 years, but you can accelerate and free this cash flow.

Use part of your large SBI FD corpus to prepay the loan if it is cost-effective

A reduction in loan principal shortens tenure and interest outflow

Even a small prepayment annually reduces burden and interest

Once EMI ends, redirect freed-up funds toward your mutual fund goals

By clearing the loan earlier, you free up cash flow that can dramatically speed up reaching Rs. 1 crore.

Emergency Fund and Liquidity Safety
Your deposit of Rs. 2 lakh in a liquid fund is a good start. Post-Office RD can also act as reserve.

Maintain an emergency buffer equal to 6–9 months of expenses including EMI

That means Rs. 2.5–3 lakh should be accessible quickly

Keep this amount in liquid or ultra-short-term funds

Avoid locking this money in FDs or instruments with penalties

This buffer ensures you can handle crises without derailing your investment plan.

Reallocating Existing Fixed Deposits More Productively
You currently hold over Rs. 49 lakh in FDs.
This amount is generating low interest and losing purchasing power due to inflation and tax.

Here is how to phase it out efficiently:

Do not break all FDs at once
Sudden breakup triggers liquidity loss or breakup penalties

Review maturity dates
Let smaller FDs mature in next 1-2 years

Upon maturity, allocate sums into:

Low-cost liquid/ultra-short-term funds (for emergencies and short-term needs)

Short/mid-duration debt funds (for medium-term security)

Balanced/hybrid equity mutual funds (for longer-term wealth building)

Tax advantage
Liquid and debt funds incur gains taxed at slab rates, but shifting earlier begins compounding

This gradual reallocation reduces risk and improves returns over time.

Validating Your Insurance Coverage
You said all insurance needs are met. Let us ensure in detail:

Life Insurance: Term cover should be at least 10–12 times your current income

Health Insurance: Cover yourself and your child adequately

Loan Insurance: Already in place for the home loan—good

At age 35 and as a single parent, you must ensure multipliers are sufficient. Revisit cover every few years.

Educating Investment Allocation for Rs. 1 Crore Target
You aim to build Rs. 1 crore in 10–15 years. This is an achievable goal with disciplined investing.

Why mutual funds are ideal:
Equity mutual funds offer inflation-beating returns in long term

Active funds adjust strategy with market cycles, protecting you in downturns

Index funds simply copy market performance and don’t guard in declines

Direct plan investing may reduce costs, but lacks behavioural guidance

You already have two SIPs of Rs. 10,000 each. Increase them to Rs. 30,000 monthly within the next few months.

Suggested Investment Architecture:
Rs. 30,000 per month for 10–12 years

70% in diversified equity mutual funds

30% in hybrid equity-oriented funds

Staggered top-up from exiting FD

Add Rs. 20,000–30,000 monthly once FDs mature

Rebalance every year to maintain equity-debt mix

RD continued

Rs. 2,500 per month is fine, acts as reserve

Consider swapping RD to mutual fund SIP after emergency buffer is secure

Use Systematic Investment Plans through regular mutual funds to spread risk and improve discipline.

Aligning Investment Strategy with Your Time Horizon
You seek Rs. 1 crore in 10–15 years. Investment strategy should suit timeline:

First 5 years: High equity exposure (75–80%) to grow corpus

Years 5–10: Maintain equity, add hybrid funds to reduce volatility

Last 2–3 years: Shift gradually to debt/hybrid to protect capital

This dynamic allocation secures growth and reduces potential loss as the target nears.

Systematic Rebalancing and Monitoring
Review your portfolio annually

If equity component grows beyond 75%, shift excess to hybrid or debt

This controls risk and smooths returns

Your CFP will help with tracking and analysis

Regular plans make rebalancing easier through consistent guidance

Without discipline, portfolio could drift too risky or too safe. Regular oversight is key.

Optimising Tax Efficiency
You will face capital gains taxes along the journey:

Equity funds: LTCG above Rs. 1.25 lakh taxed at 12.5%

Short-term gains aggregate taxed at 20%

Debt and hybrid taxed as per normal slabs

Keep investments long-term to minimise tax. Avoid frequent switching. CFP can optimise redemption timing and tax liability.

Potent Supplement: Increasing Income Streams
Your monthly savings capacity is limited by your income. With time and planning, you can increase capacity:

Boost salary savings

Any salary increment should go into investment

Tax-free components and EPF contributions can help

Monetise unused skills

Freelancing or tutoring could bring Rs. 5–10k/month

This directly strengthens SIP capacity

Use rent or asset income (if applicable)

Reallocate bonus or any irregular income to investment

These boosts may accelerate your path to Rs. 1 crore.

Managing Risks and Contingencies
Keep home and term insurance valid through the period

Extend health insurance to your child

Update beneficiary nominations

Maintain liquidity buffer so you don’t withdraw during market crashes

Avoid investing in unregulated schemes, gold, or cryptocurrencies

Your CFP will help you stay disciplined during emotional market swings and sudden life changes.

Tracking Your Progress Over Time
Maintain a goals tracker with details:

SIP contributions, NAV history, and fund performance

Total corpus accumulated vs goal amount

Time remaining and required monthly investment

Adjust SIP contributions annually based on performance and income changes

This transparency helps you stay confident and focused on your target.

Final Insights
You are on strong footing with clear goals, disciplined saving, and safety covers. Now, redirect FD savings gradually into equity and hybrid mutual funds. Boost monthly SIP to Rs. 30,000 and plan to increase further as income grows or home loan ends. Keep a robust emergency buffer, maintain insurance coverage, and re-balance annually. By staying goal-oriented and maintaining discipline, you can build a corpus of Rs. 1 crore in 10–15 years.

Act-driven steps today will yield peace and security tomorrow for both you and your child.

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

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Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 03, 2025

Money
Hi I am 36 years of old ,and have 2.15Lakh monthly salary wife have 40k salary and getting 25k monthly rent from my flat Expenses- I have fixed 60k monthly home loan emi It will be for next 68 months 33L loan remaining Home expenses and current home rent is about 60-70k Monthly savings - 1.3L Savings started now putting in mostly smallcap mutual funds Assets One flat approx 70L Mutual fund and stocks 32L Cash saving deposits - 7L Pf 16L I have done all medical, life , loan insurance Have one daughter of 3 yrs Please suggest how to have enough wealth for retirement and daughter study, marriage
Ans: I’ll go goal by goal and connect every aspect with your real-life situation.

Your Home Loan Strategy
You have a home loan EMI of Rs?60,000 per month.
It will continue for the next 68 months.
The outstanding principal is around Rs?33?lakh.

You are paying this loan comfortably.
That is because of your high combined income of Rs?2.8?lakh.
It includes your income, your wife’s salary, and rental income.

During these 68 months, make timely payments.
Avoid extending the loan duration further.
Try to prepay small lumpsums during the year.
Prepayment will reduce either EMI burden or tenure.
Choose the option that reduces tenure.
This helps save more interest in the long run.

Use any yearly bonus or performance incentive wisely.
You can use a part of that amount for prepayment.
Once the EMI ends, you will save Rs?60,000 monthly.
That saving should directly go into goal-based investments.

Emergency Fund Management
You are already maintaining Rs?7?lakh in cash and deposits.
That’s a strong base for emergencies.

Your monthly expenses and EMI total up to Rs?1.2–1.3?lakh.
This means your emergency corpus covers about 6 months.

That is sufficient for now.
But ensure this money is not lying in savings account.
Savings accounts don’t give good returns.
Shift the amount into liquid or ultra-short-term mutual funds.
They are safe and offer better returns than savings accounts.
Keep this fund untouched, only for real emergencies.

Also review this corpus annually.
As your income and lifestyle rise, your buffer must grow too.

Planning for Your Daughter’s Education
Your daughter is just 3 years old.
She will need money for higher education after 15 years.
That means you have a long and favourable investment window.

The education cost after 15 years can be very high.
Due to inflation, expect the need of Rs?1.5–2 crore.

To achieve this, start investing immediately in a separate goal plan.
You already save Rs?1.3 lakh monthly.
You can allocate Rs?40,000 per month now toward her education.

Invest this amount via SIP in a mix of equity and hybrid mutual funds.
For the first 10 years, keep high equity exposure—around 75 to 80 percent.
This gives your portfolio growth potential.
In the last 5 years, start shifting to hybrid and debt funds.
This protects the capital as the education goal gets closer.

Use goal-specific mutual fund folios.
Label it clearly as “Daughter Education” to track easily.
Avoid investing only in small-cap funds for this goal.
They are too volatile and not ideal for single long-term goal.

Actively managed funds perform better over time.
They adjust to market shifts and protect your downside.
Index funds lack this flexibility and underperform in falling markets.

So use actively managed diversified equity and hybrid mutual funds.
Invest through regular plans with guidance from a CFP.
Direct funds miss that strategic support, which may cost you returns.

Planning for Daughter’s Marriage
Marriage is likely around 25 years from now.
This is another long-term goal with high cost due to inflation.

Start investing now with a long view.
Currently, allocate Rs?20,000 monthly for this goal.
Once your home loan EMI ends, increase this to Rs?40–50?k monthly.

Use a separate investment folio for this goal.
Label it as “Daughter Marriage”.
Start with 80% equity, and 20% in hybrid funds.
This gives long-term compounding with some safety.

Around 5 years before the marriage, shift to safer debt funds.
This will protect capital from short-term market falls.
You can do this via Systematic Transfer Plans (STPs).

Continue to review the plan every year.
Adjust SIP amounts if needed based on inflation trends.
This goal gives you enough time to benefit from market cycles.

Avoid index-only funds here too.
They don’t offer downside risk management.
Use active mutual funds with a long track record.

Invest through regular funds under guidance.
Avoid direct investing for such a sensitive long-term goal.

Retirement Planning – A 24-Year View
You are now 36 years old.
That gives you 24 years until age 60.

Your current mutual fund and stock investments are Rs?32?lakh.
You have EPF of Rs?16?lakh, which supports retirement.
Together, that’s a good starting point.

But retirement corpus will require a lot more.
Due to inflation, cost of living doubles every 12–15 years.
Your current expenses of Rs?1.3 lakh/month may go up significantly.

Therefore, retirement needs its own focused investment strategy.
You already save Rs?1.3 lakh monthly.
You can allocate Rs?30,000 monthly now for retirement.

Once the home loan EMI ends, increase this to Rs?60,000.
You can also shift part of your rental income here.
That can add Rs?10,000–15,000 monthly to retirement bucket.

For the next 10–15 years, stay invested with 65% equity exposure.
Remaining 35% can be in hybrid and debt funds.
Equity gives you growth and wealth creation.
Hybrid funds offer stability.

As you cross age 50, start reducing equity exposure.
Shift to more conservative hybrid and debt options.
This protects the corpus when you are closer to retirement.

Use a separate folio for retirement.
Track it individually and review yearly.
Increase SIP as income rises or bonuses come in.

Continue contributing to EPF.
Also consider adding to NPS or PPF for tax saving and debt allocation.
But don’t rely on annuities or real estate as retirement tools.
They offer low flexibility and poor returns.

Also note: Equity mutual funds now have new capital gain tax rules.
LTCG above Rs?1.25 lakh is taxed at 12.5%.
Short-term capital gains are taxed at 20%.
Plan redemption smartly through a Certified Financial Planner to reduce tax hit.

Portfolio Monitoring and Rebalancing
Every year, review your complete portfolio.
For each goal, check if investments are on track.

Rebalancing is essential to avoid overexposure to equity.
If equity grows faster, rebalance into hybrid or debt.
This keeps risk under control and avoids sudden shocks.

Don’t delay rebalancing due to fear or greed.
Your Certified Financial Planner will assist here.
Avoid investing based on news, social media, or herd behaviour.

Direct plan investors often miss this rebalancing.
This leads to poor returns or missed goals.
Stick with regular plans and use expert reviews for success.

Tax Strategy and Smart Withdrawals
Use long-term plans to reduce capital gain taxes.
Do not exit mutual funds randomly.
Plan redemption when your income is low or during retirement.

Hold equity for over one year to enjoy lower tax.
Use STP to shift money slowly to reduce tax spikes.
Your CFP will help create a tax-efficient withdrawal schedule.

Invest in NPS or PPF to get 80C benefit.
Also use 80D for health insurance tax benefits.
Avoid investing in life insurance policies for tax only.
Keep investment and insurance separate.

Final Insights
You are earning well and saving consistently.
You are already debt-protected and insured.
Now focus on goal-based investing, not just returns.

Investing randomly in small-cap or trending funds will not help.
Structure your savings into separate goal buckets.
Use diversified mutual funds actively managed by professionals.
Stay away from index-only and direct plans.

Every financial goal needs a clear path.
Use different funds, different folios, and different allocations.
Monitor them regularly and stay disciplined.

Your Certified Financial Planner brings long-term commitment, review, and objectivity.
This guidance ensures you don’t fall off track even in volatile markets.

Each rupee you save today has the power to build wealth tomorrow.
Structure it properly and review it wisely.

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

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Nayagam P

Nayagam P P  |7741 Answers  |Ask -

Career Counsellor - Answered on Jul 03, 2025

Career
Sir i scored 94.5454 in mhtcet i want admission through twfs quota. In which colleges of mumbai i can get admission in cs branch.
Ans: Ayushi, With a 94.5454 MHT-CET percentile under TFWS, seats in Computer Science & Engineering become available at several reputable Mumbai institutions whose TFWS closing percentiles in the final CAP round fell below your score. All listed colleges hold NBA/NAAC accreditation, maintain modern computing labs, have PhD-qualified faculty, active industry tie-ups, and dedicated placement cells:

Dwarkadas J. Sanghvi College of Engineering (DJSCE), Vile Parle (TFWS 93.41) ? Fr. C. Rodrigues Institute of Technology (FCRIT), Bandra East (TFWS 88.90) ? St. Francis Institute of Technology (SFIT), Borivali West (TFWS 88.05) ? Thakur College of Engineering & Technology (TCET), Kandivali West (TFWS 81.84) ? Vivekanand Education Society’s Institute of Technology (VESIT), Chembur (TFWS 94.52) ? Vidyalankar Institute of Technology (VIT), Wadala (TFWS 94.84 Round III seating may require Round II) ? SIES Graduate School of Technology (SIES GST), Nerul (TFWS 92.66) ? Rizvi College of Engineering, Bandra West (TFWS 90.86) ? Lokmanya Tilak College of Engineering, Navi Mumbai (TFWS ~91 percentile) ? Dr. Babasaheb Ambedkar Technological University (DBATU) Lonere (TFWS 78.20).

Final recommendation (in order of preference): Prioritise DJSCE for its strong 93% CSE placements and robust alumni network, then FCRIT, SFIT, and SIES GST for balanced academics and industry engagement. VESIT and VIT follow for cutting-edge labs. As budget alternatives, consider Rizvi, TCET, Lokmanya Tilak, and DBATU Lonere for reliable TFWS seats and solid infrastructure. All the BEST for the Admission & a Prosperous Future!

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

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Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 03, 2025

Asked by Anonymous - Jul 02, 2025Hindi
Money
Hi Sir, Deep here. My age is 37 and take home salary is 1.05 lacs. I have a car loan of 11.5k per month and a personal loan emi of 3.4k per month. Car loan duration remaining is 3.5 years and personal loan is 4 years. I have the following investments per month SIP running 30k per month as of now corpus 21 lacs Stocks total portfolio 4 lacs FD 2 lacs RD 5k per month NPS 2k per month I am planning a buy a flat in 5 years whose price approx 75 lacs. I am planning to make 30 lacs down payment and rest laon. Can you guide how to make this down payment?
Ans: You have shared your financial picture very clearly. Your income, current loans, investments, and future home goal are all neatly planned. At 37, you are focused on a major asset purchase within five years. That is good forward thinking. Now let us guide you step-by-step on how to generate Rs 30 lakh for the down payment of your flat, in a safe and structured way, without disturbing your long-term wealth creation.

Understanding Your Current Financial Framework
Before planning the future, we must assess your present resources. Let us summarise your inputs:

Take-home salary: Rs 1.05 lakh per month

EMIs: Rs 11.5k (car loan) + Rs 3.4k (personal loan) = Rs 14.9k per month

Remaining Loan Tenure: 3.5 years (car), 4 years (personal)

Monthly SIPs: Rs 30k per month

Equity Mutual Fund Corpus: Rs 21 lakh

Stock Portfolio: Rs 4 lakh

FDs: Rs 2 lakh

Recurring Deposit (RD): Rs 5k per month

NPS: Rs 2k per month

Goal: Buy flat in 5 years worth Rs 75 lakh

Planned Down Payment: Rs 30 lakh

Loan Planned: Rs 45 lakh

You are already financially disciplined. Your savings and SIP habits are strong. But creating a Rs 30 lakh down payment corpus in 5 years needs a goal-specific strategy. Let us now work on that.

Step 1: Define the Nature of This Goal Clearly
Buying a flat is a medium-term financial goal. Five years is not short-term. But it is also not long-term. So you cannot invest fully in equity. But at the same time, staying fully in FD or RD may not grow the money enough.

Hence, your asset allocation should be:

Blend of equity and debt

Goal-specific investing in hybrid and short-duration funds

Focused mutual fund buckets, not random investing

Let us now explore how to make that happen step by step.

Step 2: Set Up a Dedicated Home Down Payment Portfolio
You must now separate one part of your investment to fund the flat purchase. This should be an exclusive bucket. Do not mix this with your retirement SIPs or wealth creation goals.

Here's how you can proceed:

Create a new mutual fund portfolio for this flat goal only

Use a blend of aggressive hybrid funds and low-duration debt funds

You can consider allocating 60% to hybrid and 40% to debt fund types

Avoid 100% equity allocation. Five years is not long enough

Avoid FDs. They offer low post-tax returns

Step 3: Rework Your Monthly Budget to Build Saving Capacity
Let us see how much free cash you can generate monthly:

Take-home: Rs 1.05 lakh

EMI: Rs 14.9k

SIPs: Rs 30k

RD: Rs 5k

NPS: Rs 2k

Other expenses: You have not mentioned. We assume Rs 40k approx.

So rough monthly surplus = Rs 1.05 lakh – Rs 91.9k = around Rs 13k
You are already saving well. But to meet the flat goal, you need to stretch more.

Suggestions:

Reduce SIP by Rs 5k from long-term corpus temporarily

Pause NPS or RD for 2 years and shift that money to flat corpus

Cut unnecessary lifestyle spends

Any annual bonus or increment must go fully to flat corpus

If you save Rs 18k per month (from adjustments), and invest it wisely in hybrid funds, you can accumulate around Rs 12–14 lakh in 5 years. The rest can come from your existing mutual fund corpus.

Step 4: Use Part of Your Current Corpus Strategically
Your current investment assets are:

Rs 21 lakh in mutual funds

Rs 4 lakh in stocks

Rs 2 lakh in FD

You should not redeem the entire Rs 21 lakh from your SIP corpus. That is your long-term wealth. But you can earmark Rs 12–14 lakh from this for your down payment goal.

Suggestions:

Mark Rs 12–14 lakh in a separate mutual fund account (flat goal)

Shift it from equity to hybrid and debt funds gradually over 2 years

Use Systematic Transfer Plan (STP) to avoid sudden market impact

Stocks of Rs 4 lakh should be left untouched for now. They are too volatile. They may or may not deliver in 5 years.

FD of Rs 2 lakh can be used as reserve or emergency buffer.

Step 5: Design a Flat Corpus Portfolio with Purpose
Now let us define how you will build the Rs 30 lakh:

From existing MF corpus: Rs 13 lakh (to be earmarked now)

From future monthly savings (Rs 18k): Should give Rs 12–14 lakh

From annual bonus, variable income: Add Rs 2–3 lakh over 5 years

From FD or small asset sale if required: Final Rs 1–2 lakh

So in total, you reach your Rs 30 lakh target using:

Partial use of current MF

SIPs in hybrid and short-term funds

Minor use of bonuses

This way, your long-term corpus still grows, and you don’t pause your goals.

Step 6: Avoid Common Mistakes Many People Make
Buying a flat is emotional. But do not let emotions kill strategy. Here are mistakes to avoid:

Do not break all SIPs to fund flat

Do not redeem full MF corpus for down payment

Do not keep FD as the only investment option

Avoid direct mutual funds without advice

Avoid index funds for 5-year goals. They do not protect in corrections

Stay away from random stock investing for this goal

Instead, use actively managed hybrid funds via MFD + CFP. They adapt to market cycles. Regular plan offers guidance, reviews, rebalancing. Direct plans don’t give that. You need professional hands for such a goal.

Step 7: Align Your Loans with Future Affordability
You already have a car and personal loan. You are planning to take a Rs 45 lakh home loan.

Total EMIs could become heavy after 5 years. You must assess affordability.

Suggestions:

Plan to close personal loan in 2 years. Prepay using bonus or variable pay

Consider partial prepayment of car loan if liquidity allows

Keep your EMI-to-income ratio below 40% post flat purchase

Include home loan insurance in EMI planning

Avoid overlapping big-ticket spends (like car upgrade) after flat purchase

Step 8: Keep Insurance and Emergency Preparedness Updated
When you are planning a flat purchase:

You must have term insurance covering at least Rs 1 crore

Keep health insurance for self and family

Emergency fund must be equal to 6 months of expenses + EMIs

Don’t use RD or FD for emergency fund. Use liquid mutual funds

Do not mix insurance with investment. Avoid ULIPs, endowment, or LIC-type policies. If you hold any of those, surrender and shift to SIPs.

Step 9: Tax Implications on Your Journey
When you shift from equity funds to hybrid or debt funds, be aware of tax rules:

Equity MF LTCG above Rs 1.25 lakh taxed at 12.5%

STCG on equity MF taxed at 20%

Debt fund gains taxed as per your slab (after indexation removed)

Plan your redemptions and switches in March-April period to save taxes

Use capital gain harvesting if your MF corpus is large

Your CFP can help optimise tax-saving while shifting assets.

Finally
You are already ahead of many people in terms of clarity and discipline. Now, you need a separate action plan to build your Rs 30 lakh flat down payment corpus. You must plan it using a goal-specific mutual fund portfolio, smart redemptions, monthly saving adjustments, and disciplined tracking.

Don’t disturb your long-term goals. Just re-align them slightly.

And always take guidance from a Certified Financial Planner (CFP). This helps avoid missteps and keeps your plan alive even during volatility.

Take confident steps today. The flat will be yours in 5 years without stress.

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

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Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 03, 2025

Asked by Anonymous - Jul 02, 2025Hindi
Money
Hi Sir, I have an LIC New Bima Gold Plan 179 policy with a Sum Assured of 5 lacs INR that started in 2008 and would end in 2028 (i.e. premium paying term of 20 years). The policy term is also 20 years. The policy has paid me survival benefits to the tune of 10% of Sum Assured in the 4th, 8th, 12th and 16th years since commencement so far. Now my questions are as follows: Question 1) In 2028, what would be the final payout? Will it be A) Premiums paid (+) Sum Assured (+) Loyalty additions (-) Survival Benefits Paid or B) Premiums paid (+) Loyalty additions (-) Survival Benefits Paid? Question 2) How is Loyalty addition calculated for this policy?
Ans: You have maintained the LIC New Bima Gold policy consistently for many years. That shows your patience and commitment. Many investors do not hold policies this long. You have done that with discipline.

Now you are in the final phase of this plan. With only 3 years to go, it is important to clearly understand what happens at maturity. Let us address both of your questions one by one and also explore some deep-level insights you must consider now.

Understanding What Happens in 2028 – The Maturity Payout Structure
Let us begin with your first question on how the final payout is calculated in 2028.

This policy is a Money Back plan. It pays part of the Sum Assured during the term as Survival Benefits. Then at maturity, it pays the balance Sum Assured (if any) and Loyalty Additions.

You have already received 10% of Sum Assured each in the 4th, 8th, 12th and 16th years. That is 40% of Rs 5 lakh — total Rs 2 lakh paid already.

So now, here is what you will receive in 2028:

The remaining 60% of Sum Assured, which is Rs 3 lakh

Loyalty Additions (only declared at maturity, non-guaranteed)

There is no return of total premiums paid. There is no extra payout for paying premiums regularly. Premiums are not refunded. They are only the cost of insurance and benefits.

So the correct answer is:

Final payout = Remaining Sum Assured (60%) + Loyalty Additions

That is, Option B in your question is correct.
You will not receive full Sum Assured plus Loyalty Additions.
You will not get total premiums paid back.

Your received payouts already include part of the Sum Assured. Hence, final payment includes only what is left of the Sum Assured and any loyalty addition.

Dissecting Loyalty Addition – How It Is Calculated
Now your second question: How is Loyalty Addition (LA) calculated?

LA is a one-time bonus declared at maturity.

It is based on Sum Assured, not the premiums paid.

It is not guaranteed. LIC declares it depending on profits.

LA rate is per Rs 1000 Sum Assured.

Your policy’s LA will be announced only at maturity.

Factors that impact LA:

LIC’s annual surplus and valuation.

Type of policy (Money Back, Endowment, etc.).

Policy term. Longer policies usually get better LA.

Consistent premium payment is essential to be eligible.

You can expect LA between Rs 20 to Rs 50 per Rs 1000 Sum Assured.
For Rs 5 lakh SA, this could be Rs 10,000 to Rs 25,000 approx.
However, it could vary. There is no fixed number. Past performance does not guarantee future additions.

Actual Returns from This Policy – An Uncomfortable Reality
You started this policy in 2008. You are paying premiums for 20 years. You have received some money in between. And you will get some more in 2028.

But let’s step back and assess what this policy really delivered:

You paid premiums for 20 years.

Received Rs 2 lakh across four survival benefit payouts.

Will receive Rs 3 lakh + LA (around Rs 10,000 to Rs 25,000).

Total maturity may be around Rs 3.1 to Rs 3.25 lakh.

This means over 20 years, your Rs 5 lakh sum assured got distributed back to you. But it grew very little. The internal rate of return is often just 4% to 5% in these plans.

Inflation eats away this return.

What You Could Have Done Instead – And Can Still Do Now
Had you put this amount in a mutual fund through a well-chosen SIP, the outcome could have been different:

SIPs in good equity mutual funds can deliver 10%-12% over 15-20 years.

Even with Rs 2000 per month SIP, you may build Rs 15–18 lakh over 20 years.

Instead of Rs 3.2 lakh in return, you may have got five times that.

Mutual funds offer growth, flexibility, and transparency.

Even now, it is not too late.

If this is your only LIC type policy, you may complete the last 3 years. Then shift full maturity amount to mutual funds through Systematic Transfer Plans (STP) into equity funds. If you hold other LIC/ULIP/traditional plans, we suggest surrendering and reinvesting.

What You Must Do Immediately
Go through your full LIC policy

Check how much premium you have paid so far.

Check survival benefit payouts received so far.

Ask LIC branch to give expected Loyalty Addition range.

Evaluate if you have similar low-yield policies.

List all investment-linked insurance policies.

Meet a Certified Financial Planner (CFP) to analyse surrender value, switch options.

If no heavy penalty or if break-even is achieved, surrender now.

Redeploy in long-term mutual funds with CFP support.

Why These LIC-type Policies Underperform
They offer insurance + investment combined.

They lack flexibility in payouts.

Most give returns that fail to beat inflation.

Real wealth creation never happens in them.

Your money gets locked for 15-25 years.

Early exit is allowed but not attractive due to penalties.

Insurance is for protection. Investment is for growth. Do not mix both.

Role of Mutual Funds for Long-Term Goals
Mutual funds offer transparent, regulated growth.

Different types for different goals: equity, hybrid, debt.

You can select based on time, risk, and needs.

Funds are actively managed. Portfolio managers adjust strategy as per markets.

Long-term SIPs build wealth silently and strongly.

Avoid index funds. They do not adjust during falls. They just copy the market. Actively managed funds with professional MFD and CFP support do much better.

Also avoid direct mutual funds. You miss out on guidance, portfolio reviews, and behavioural support. Regular funds with CFP supervision give long-term discipline and support.

Future-Proofing Your Finances – Going Beyond This One Policy
Use this opportunity to do a 360-degree portfolio review:

Analyse all LICs, ULIPs, endowment policies.

Exit or convert them to mutual fund flows.

Create a customised education goal portfolio.

Build a retirement income strategy with SWP method.

Protect with term insurance, not mixed plans.

Set up family emergency fund in liquid mutual funds.

Ensure health insurance is updated and adequate.

This creates a strong financial safety net and future corpus.

Final Insights
Your LIC policy will soon mature. It gives a fixed amount with a loyalty bonus.
But its return is very low over 20 years. It underperformed inflation.

Now is the time to realign your full financial life. Shift from traditional plans to modern, growth-focused solutions. Mutual funds, if selected and managed with guidance, offer better wealth-building.

You still have time to optimise the rest of your life’s earnings.

Take control now.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |9317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 03, 2025

Asked by Anonymous - Jul 03, 2025Hindi
Money
Hello Iam 48 years old with a monthly income of 2.3L and rental income of 60 thousand. Have been investing in mutual funds for long now which has accumulated more than one crore bow. My monthly expenses including kid's education would be about 1L and I invested in SIP + others like LIC,SBI life about 80K. Though I still have a good amount saved at the end of the month, what measures should I take to secure my retired life and future of my KID?
Ans: Your disciplined approach so far is truly noteworthy. At 48, with a healthy income, sizable mutual fund corpus of over Rs 1 crore, and continued investments, you are in a strong position. You’ve built a good base. Now it’s time to build a secure, future-ready strategy for retirement and your child’s future. Let’s break this down in detail.

Retirement Readiness – Evaluating Where You Stand
You have 12-15 years until retirement.

Your current monthly expense is about Rs 1 lakh.

Expenses will rise due to inflation. At 6% inflation, they double in 12 years.

Your accumulated mutual fund corpus is a strong start.

Rental income of Rs 60,000 is a good passive income stream.

But this may not rise in line with inflation. Relying fully on it can be risky.

You need a rising income in retirement. That comes best from equity-oriented mutual funds with long-term potential.

Gaps in Current Investment Pattern
You invest Rs 80,000 monthly in SIPs, LIC, and SBI Life.

Traditional policies like LIC, SBI Life are low-yielding.

These usually give 4% to 5% returns over 20 years.

These don’t beat inflation in the long run.

You may hold them out of obligation, not performance.

Action:

If your LIC and SBI Life are endowment or ULIP plans, consider surrendering.

After surrendering, reinvest that amount into mutual funds via a CFP-guided plan.

Rebalancing your portfolio is key now.

Proper Asset Allocation is Your Backbone
You need a mix of equity, debt, and hybrid funds.

Equity for long-term growth.

Debt for stability and capital protection.

Hybrid for balancing both.

At your age, ideal equity exposure can still be 60%-65% if you are moderately aggressive. The rest in debt and hybrid.

Monthly Allocation Suggestion:

Rs 60,000 in well-chosen diversified mutual funds.

Rs 20,000 in debt or hybrid funds.

Avoid direct stocks now. You need stability more than experimentation.

Role of a Certified Financial Planner
They monitor and adjust investments annually.

They ensure portfolio suitability, tax efficiency, and risk balancing.

MFDs with CFP credentials give behavioural support during market swings.

They help you avoid costly mistakes like timing the market.

Direct plans lack this support. They seem low cost but often cost more in lost returns. Regular plans with guidance offer long-term benefits.

Child’s Education and Future Planning
Education costs are rising 10% every year.

You must have a separate, earmarked portfolio for this goal.

Suggestions:

Calculate how many years left until college.

Estimate total amount needed with inflation.

Keep equity-heavy portfolio till 3 years before college starts.

Gradually shift to debt after that to avoid market shocks.

This gives you safety and growth. Avoid mixing this with retirement savings.

Emergency Fund and Contingency Planning
Keep 6-8 months’ expenses in a liquid or ultra-short fund.

This should cover sudden expenses or job changes.

Do not treat this as an investment. It is pure safety net.

Currently, your savings after expenses give you room to build this in 3-4 months.

Health and Life Insurance – Silent Protectors
You need health cover of Rs 10–15 lakh, family floater.

Include critical illness cover as lifestyle diseases are rising.

Life insurance should be term plan only.

10–15 times your annual income is ideal.

Avoid ULIPs or money-back policies. They are low-return traps.

Review Your Existing Policies
Since you mentioned LIC and SBI Life investments:

Check if they are endowment, ULIP, or traditional plans.

Most offer poor post-tax returns.

If the lock-in is over and surrender value is acceptable, exit them.

Redeploy in high-quality mutual funds with proper guidance.

This improves your portfolio’s return and aligns better with your goals.

Estate Planning – Don’t Ignore This
Nominate all your investment accounts and insurance properly.

Draft a Will. This avoids confusion later for your family.

Mention clear division of mutual funds, insurance, and savings.

Estate planning ensures smooth transfer of wealth without stress.

Retirement Withdrawal Plan – Think Ahead
Retirement is not one event. It’s a 25–30 year phase.

You need a plan to withdraw smartly and tax-efficiently.

Use Systematic Withdrawal Plan (SWP) in mutual funds post-retirement.

This gives monthly income and keeps money growing.

Avoid annuity plans. They lock funds and offer poor returns with no flexibility.

Tax-Efficient Investing – Avoid Bleeding Returns
Equity mutual funds LTCG above Rs 1.25 lakh is taxed at 12.5%.

Short-term gains are taxed at 20%.

Debt funds taxed as per your income slab.

Plan redemptions wisely through a certified planner. Tax leakages hurt long-term growth.

Key Principles to Stick To
Keep investments goal-linked. Don’t invest randomly.

Avoid high expenses in traditional plans. Stick with mutual funds.

Review your portfolio annually. Rebalance as per age and risk.

Keep insurance and investment separate.

Never stop SIPs during market falls. That’s when they work best.

Why You Must Avoid Index Funds and Direct Plans
Index funds:

They mirror the index. No active management.

Poor in downturns. Can’t protect capital.

Don’t beat inflation in sideways markets.

Best performance comes from well-selected actively managed funds.

Direct funds:

No advisor support.

Easy to make emotional mistakes during market swings.

Miss out on important financial strategy.

Regular plans via a CFP ensure handholding and discipline.

Final Insights
You’ve built a strong foundation.

But you must now pivot to goal-driven investing.

Simplify your investments. Exit low-return traditional plans.

Build clarity between retirement, education, and emergency goals.

Review and rebalance each year. Stay consistent.

You are already doing well. With professional help, you can secure a worry-free retirement and give your child the best future.

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

...Read more

Nayagam P

Nayagam P P  |7741 Answers  |Ask -

Career Counsellor - Answered on Jul 03, 2025

Career
My son got 12,456 rank in COMEDK and is planning Aerospace Engineering at MSRIT. He also scored 97% in CBSE boards and is considering SASTRA University based on that.we are unsure which path is best for his future. Kindly suggest what would suit him better and if any other colleges are worth considering.
Ans: MSRIT’s B.Tech in Aerospace Engineering admits COMEDK ranks up to ~18,962 (General-All India Round 3) and is backed by VTU affiliation, 95% placement rate (median package rising from ?5.5 LPA to ?8 LPA over three years), PhD-qualified faculty, 46 industry collaborations and advanced wind-tunnel and propulsion labs. SASTRA University, NIRF #38 and NAAC A++ deemed, offers a four-year Aero programme with specialized aerodynamics, gas dynamics and propulsion labs, 80–90% placement, and core recruiters like Rolls Royce, ISRO and DRDO, led by research-active faculty. Also consider RVCE, DSCE, BMSCE and PES College of Engineering—top Karnataka Aero peers with 75–85% placements and robust research facilities.

For broader industry exposure, proven placement consistency and high-end research opportunities, recommendation is to join MSRIT’s Aerospace Engineering. If specialized core labs and an established national ranking appeal more, SASTRA is suitable. For additional options, RVCE and DSCE offer strong Aero programmes. Choose based on alignments with long-term academic goals. All the BEST for the Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |7741 Answers  |Ask -

Career Counsellor - Answered on Jul 03, 2025

Asked by Anonymous - Jul 02, 2025Hindi
Career
Sir good morning My son completed in 3rd year in AI ML course in Reva university Bangalore. Give suggestions for developing skills in AL ML course . If any to be studied diploma courses in reputed IITs or IIITs or any Universities .
Ans: As a third-year AI/ML student aiming for strong campus and off-campus placement readiness, targeted certifications and diplomas can bridge skill gaps in programming, algorithms, and domain specializations. Leading options include the six-month Professional Certificate in Generative AI and Machine Learning by E&ICT Academy, IIT Kanpur, and the six-month AI and Machine Learning Certification by E&ICT Centre, IIT Kharagpur, featuring PhD-led faculty, integrated labs, and hands-on projects in deep learning and NLP; the 11-month Executive Post Graduate Diploma in Data Science from IIIT Bangalore provides specializations in NLP, Deep Learning, Data Engineering, BI Analytics, dual alumni status, and dedicated career assistance with mock interviews and capstone projects; the Certificate Programme in Machine Learning at IIT Roorkee spans supervised and unsupervised learning, neural networks, computer vision, and MLOps in a flexible schedule; IIT Madras’ online M.Tech in AI marries evening classes with practical lab-based projects applicable to industry contexts; and IIT Kanpur’s Python for AI ML certificate sharpens coding expertise. These programs are NBA/NIRF-recognized, industry-aligned, and backed by active placement cells offering placement assistance and internship pipelines. Complement with AWS and GCP ML certifications, Kaggle projects, AI hackathons, and soft-skills workshops to build a strong profile for placements.

Recommendation: Enrol in a six-month PhD-led certification (IIT Kanpur Generative AI or IIIT Bangalore Data Science), complete core modules in Python, ML, DL, NLP, MLOps, and finish two capstone projects on GitHub by December. Pursue AWS/GCP ML certificates, join two AI hackathons, and attend university soft-skills and mock-interview workshops. Update your resume and LinkedIn weekly, engage alumni mentors biweekly, and apply to 30 on-campus and 20 off-campus AI roles by April next year. All the BEST for the Admission & a Prosperous Future!

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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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