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Ramalingam

Ramalingam Kalirajan  |9456 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 11, 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
Nirmal Question by Nirmal on Jun 25, 2024Hindi
Money

Hi Sir, I am employed with a 11LPA job. I do not have a history of saving but have started a 7000 rupees SIP recently (almost 60% in index and 30% in midcap and rest in hybrid). I inherit my father's Chennai property worth over 8cr by today's market value. As the property is too old, demolishing it and reconstructing requires a huge loan and a 20 year EMI commitment which i am not interested. I just wanted to know if i can sell the property (have to lose 20% as capital gain) and create an income generating scheme for the rest of the years to come.

Ans: You've got a great opportunity on your hands with the Chennai property inheritance. Let's explore how you can turn this inheritance into a long-term income-generating scheme without getting bogged down by a huge loan or long-term EMI commitment.

Understanding Your Current Situation
First, it's commendable that you have started saving with a SIP of Rs. 7,000. Your job with an annual package of Rs. 11 lakhs provides a stable income. However, the challenge is that you haven't had a history of saving. That's about to change, and I'll guide you on how to make the most of your current and future financial resources.

The Property Dilemma
You’ve inherited a property worth Rs. 8 crores. The property is old and needs reconstruction, which you are not interested in pursuing due to the huge loan and long-term EMI commitment required. Let's explore the option of selling the property.

Selling the Property
Selling the property could be a wise decision. Here's why:

Avoiding Reconstruction Hassles: Reconstruction involves not just financial strain but also time and effort. Selling saves you from these hassles.

Immediate Capital: Selling the property provides you with immediate capital. You can then invest this capital to generate a steady income.

Capital Gains Tax: Yes, you'll lose 20% as capital gains tax, but the remaining amount is still substantial. With proper investment, this can create a significant income stream.

Creating an Income-Generating Scheme
Let's explore how you can reinvest the proceeds from the property sale to generate income for the years to come. Here’s a step-by-step approach:

Diversification is Key
Diversifying your investments is essential to manage risk and optimize returns. Here are some investment options to consider:

Mutual Funds: Mutual funds offer various options like equity, debt, and hybrid funds. They are professionally managed and can provide good returns.

Fixed Deposits and Bonds: These provide safety and steady returns. They are less volatile compared to equity investments.

Systematic Withdrawal Plan (SWP): An SWP from mutual funds can provide regular income. This way, you can withdraw a fixed amount every month.

Mutual Funds: A Strong Contender
Mutual funds can be an excellent option for creating an income-generating scheme. Here’s why:

Variety of Options: You can choose from equity, debt, and hybrid funds based on your risk appetite and investment horizon.

Professional Management: Fund managers handle the investment decisions, ensuring your money is well-managed.

Potential for Higher Returns: Equity mutual funds have the potential to offer higher returns over the long term.

Systematic Withdrawal Plan (SWP): You can set up an SWP to receive a regular income from your mutual fund investments.

Balancing Between Safety and Growth
Considering your moderate risk appetite, a balanced approach is ideal:

Equity Funds: Invest a portion in diversified equity funds for growth. These funds invest in a mix of large-cap, mid-cap, and small-cap stocks.

Debt Funds: Allocate some amount to debt funds for stability. These funds invest in government and corporate bonds, providing regular interest income.

Hybrid Funds: These funds invest in a mix of equity and debt. They offer a balance of growth and stability.

Power of Compounding
The power of compounding can significantly grow your investment over time. By reinvesting your returns, your investment can grow exponentially. This is particularly effective in equity mutual funds.

Systematic Withdrawal Plan (SWP)
An SWP allows you to withdraw a fixed amount from your mutual fund investment regularly. This can provide a steady income stream. You can set up an SWP to match your monthly expenses.

Benefits of Actively Managed Funds
Actively managed funds can be more beneficial compared to index funds. Here’s why:

Potential for Outperformance: Fund managers aim to outperform the market index by selecting high-performing stocks.

Flexibility: Fund managers can adjust the portfolio based on market conditions, providing flexibility.

Research and Expertise: Active funds involve extensive research and analysis, ensuring informed investment decisions.

Risks and Mitigation
Investments come with risks. Here’s how to mitigate them:

Market Risk: Equity investments are subject to market risk. Staying invested for the long term can mitigate this risk.

Credit Risk: Debt funds carry credit risk. Choosing high-quality debt funds can reduce this risk.

Interest Rate Risk: Changes in interest rates can affect debt funds. Understanding the interest rate environment can help in selecting the right debt funds.

Long-Term Financial Planning
Long-term financial planning is crucial to ensure your financial security. Here’s how:

Emergency Fund: Keep a portion of your investment in liquid funds for emergencies. This ensures you’re not forced to liquidate long-term investments at an unfavorable time.

Retirement Planning: Plan for your retirement by investing in a mix of equity and debt funds. The power of compounding can help build a substantial retirement corpus.

Child’s Education: Invest in equity mutual funds for your child’s education. The long investment horizon can help accumulate a significant corpus.

Final Insights
Selling the property and reinvesting the proceeds can be a smart move. Diversify your investments across mutual funds, fixed deposits, and bonds. This approach provides a balance of growth, stability, and liquidity.

Remember, consulting with a Certified Financial Planner can help tailor a strategy that suits your unique situation. They can help you create a balanced portfolio that aligns with your financial goals, risk tolerance, and investment horizon.

Making informed decisions today can ensure a secure and prosperous future for you and your family.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |9456 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 11, 2024

Asked by Anonymous - Jun 22, 2024Hindi
Money
Hi All, I am employed with a 11LPA job. Currently I do not have any savings in terms of liquid cash or stocks or mutual funds. I inherited my father's property worth over 8cr by today's market value. As the property is too old , demolishing it and reconstructing requires a huge loan and a 20 year EMI commitment which i am not interested. I just wanted to know if i can sell the property (have to lose 20% as capital gain) and create an income generating scheme for the rest of the years to come
Ans: You've got a great opportunity on your hands with the Chennai property inheritance. Let's explore how you can turn this inheritance into a long-term income-generating scheme without getting bogged down by a huge loan or long-term EMI commitment.

Understanding Your Current Situation
First, it's commendable that you have started saving with a SIP of Rs. 7,000. Your job with an annual package of Rs. 11 lakhs provides a stable income. However, the challenge is that you haven't had a history of saving. That's about to change, and I'll guide you on how to make the most of your current and future financial resources.

The Property Dilemma
You’ve inherited a property worth Rs. 8 crores. The property is old and needs reconstruction, which you are not interested in pursuing due to the huge loan and long-term EMI commitment required. Let's explore the option of selling the property.

Selling the Property
Selling the property could be a wise decision. Here's why:

Avoiding Reconstruction Hassles: Reconstruction involves not just financial strain but also time and effort. Selling saves you from these hassles.

Immediate Capital: Selling the property provides you with immediate capital. You can then invest this capital to generate a steady income.

Capital Gains Tax: Yes, you'll lose 20% as capital gains tax, but the remaining amount is still substantial. With proper investment, this can create a significant income stream.

Creating an Income-Generating Scheme
Let's explore how you can reinvest the proceeds from the property sale to generate income for the years to come. Here’s a step-by-step approach:

Diversification is Key
Diversifying your investments is essential to manage risk and optimize returns. Here are some investment options to consider:

Mutual Funds: Mutual funds offer various options like equity, debt, and hybrid funds. They are professionally managed and can provide good returns.

Fixed Deposits and Bonds: These provide safety and steady returns. They are less volatile compared to equity investments.

Systematic Withdrawal Plan (SWP): An SWP from mutual funds can provide regular income. This way, you can withdraw a fixed amount every month.

Mutual Funds: A Strong Contender
Mutual funds can be an excellent option for creating an income-generating scheme. Here’s why:

Variety of Options: You can choose from equity, debt, and hybrid funds based on your risk appetite and investment horizon.

Professional Management: Fund managers handle the investment decisions, ensuring your money is well-managed.

Potential for Higher Returns: Equity mutual funds have the potential to offer higher returns over the long term.

Systematic Withdrawal Plan (SWP): You can set up an SWP to receive a regular income from your mutual fund investments.

Balancing Between Safety and Growth
Considering your moderate risk appetite, a balanced approach is ideal:

Equity Funds: Invest a portion in diversified equity funds for growth. These funds invest in a mix of large-cap, mid-cap, and small-cap stocks.

Debt Funds: Allocate some amount to debt funds for stability. These funds invest in government and corporate bonds, providing regular interest income.

Hybrid Funds: These funds invest in a mix of equity and debt. They offer a balance of growth and stability.

Power of Compounding
The power of compounding can significantly grow your investment over time. By reinvesting your returns, your investment can grow exponentially. This is particularly effective in equity mutual funds.

Systematic Withdrawal Plan (SWP)
An SWP allows you to withdraw a fixed amount from your mutual fund investment regularly. This can provide a steady income stream. You can set up an SWP to match your monthly expenses.

Benefits of Actively Managed Funds
Actively managed funds can be more beneficial compared to index funds. Here’s why:

Potential for Outperformance: Fund managers aim to outperform the market index by selecting high-performing stocks.

Flexibility: Fund managers can adjust the portfolio based on market conditions, providing flexibility.

Research and Expertise: Active funds involve extensive research and analysis, ensuring informed investment decisions.

Risks and Mitigation
Investments come with risks. Here’s how to mitigate them:

Market Risk: Equity investments are subject to market risk. Staying invested for the long term can mitigate this risk.

Credit Risk: Debt funds carry credit risk. Choosing high-quality debt funds can reduce this risk.

Interest Rate Risk: Changes in interest rates can affect debt funds. Understanding the interest rate environment can help in selecting the right debt funds.

Long-Term Financial Planning
Long-term financial planning is crucial to ensure your financial security. Here’s how:

Emergency Fund: Keep a portion of your investment in liquid funds for emergencies. This ensures you’re not forced to liquidate long-term investments at an unfavorable time.

Retirement Planning: Plan for your retirement by investing in a mix of equity and debt funds. The power of compounding can help build a substantial retirement corpus.

Child’s Education: Invest in equity mutual funds for your child’s education. The long investment horizon can help accumulate a significant corpus.

Final Insights
Selling the property and reinvesting the proceeds can be a smart move. Diversify your investments across mutual funds, fixed deposits, and bonds. This approach provides a balance of growth, stability, and liquidity.

Remember, consulting with a Certified Financial Planner can help tailor a strategy that suits your unique situation. They can help you create a balanced portfolio that aligns with your financial goals, risk tolerance, and investment horizon.

Making informed decisions today can ensure a secure and prosperous future for you and your family.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9456 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 29, 2025

Asked by Anonymous - Apr 29, 2025
Money
Hi Sir, I have a property in Mumbai suburb (approx 40L) and its location is perfect near station, bus stop, heart of the city etc. It's very old around 36 years old. I have just inherited it and I am finishing the legal procedure of it. The monthly maintenance is increasing every year and we are still waiting for redevelopment to happen. I am housewife and require monthly income. We also have loans around 25 L. My husband is int IT field and I am German language expert. We have a son 3 years. Some are saying to give it on rent and some are saying to sell it off for repaying loans. Even if I sell it I would like to reinvest it somewhere for getting monthly income, preferably a property. I want a secure investment for meeting the requirements for my son's education as my husband's field is very volatile due to regular layoffs and stuff. Kindly guide
Ans: You have inherited a 36-year-old property worth around Rs 40 lakh.
You have Rs 25 lakh loans to repay.
You are a housewife but a German language expert, and your husband is in IT.
You want monthly income and secure future planning, especially for your son.

You have inherited a valuable property in Mumbai suburb.

You are completing the legal formalities rightly, which is very important.

You are thinking ahead for monthly income, child education, and loan repayment.

Very few people show this kind of foresight. You deserve appreciation.

Challenges You Are Facing Now

Property is old, around 36 years, and needs maintenance.

Maintenance charges are rising every year, increasing burden.

Redevelopment is uncertain and unpredictable.

You have Rs 25 lakh loans creating stress.

Husband's IT field is unstable due to layoffs.

You want a secure monthly income and financial stability.

Option 1: Giving Property on Rent

You can earn monthly rental income by renting it out.

Typical rent may be around Rs 8,000 to Rs 12,000 per month.

Rental yield will be hardly 2%-3% on Rs 40 lakh value.

This is very low compared to your needs and loan burden.

Maintenance charges, property tax, repairs will further reduce your income.

Vacancy risk is also there if tenants leave.

Overall, rental income may not fully support your financial goals.

Option 2: Selling the Property

Selling can give you around Rs 40 lakh.

You can immediately clear Rs 25 lakh loans.

After repaying loans, you will still have around Rs 15 lakh.

Loan closure will bring huge mental peace and cash flow freedom.

No more EMI burden means husband's salary can be saved better.

You can use balance Rs 15 lakh wisely to generate monthly income.

Important Insights on Redevelopment

Redevelopment can take 5-10 years easily.

Many projects get delayed due to disputes and permissions.

Till redevelopment happens, maintenance and repair costs rise.

You may have to stay invested without any income for long.

Your immediate needs for income and loan closure will not be solved.

Depending on redevelopment alone is very risky at this stage.

What You Should Ideally Do

Prefer selling the property now while market is still decent.

Clear all Rs 25 lakh loans fully and become completely debt-free.

Debt-free life is the biggest financial freedom you can gift your family.

With balance money, create a secure income plan.

Stay light without property burdens and maintenance worries.

Focus on building an education corpus for your son and retirement corpus.

Where to Invest After Selling

Do not buy another property immediately for investment.

Property rental yields are low, and liquidity is very poor.

Instead, create a mix of debt mutual funds and hybrid mutual funds.

These can give you monthly income using Systematic Withdrawal Plan (SWP).

This method protects your capital and gives you flexible monthly payouts.

Debt mutual funds can provide 6%-7% returns safely with low risk.

Balanced advantage funds can give 8%-10% returns over 3-5 years.

Always choose regular mutual fund plans through a MFD who is also a Certified Financial Planner.

Why Not Property for Reinvestment?

Property is illiquid; selling it again takes months or years.

Property has heavy costs like stamp duty, registration, brokerage, repairs.

Rentals are taxed fully as income, eating away returns.

If tenant defaults or property is vacant, you get zero income.

Maintaining property is a headache, especially in old buildings.

Mutual funds offer better flexibility, better tax-efficiency, and better liquidity.

Disadvantages of Direct Plans (Important for You to Know)

If you invest in direct mutual fund plans yourself, you miss expert guidance.

Wrong fund selection, wrong withdrawal rate can destroy your capital.

Regular plans through a CFP-backed MFD give proper fund selection and review.

Charges in regular plan are justified because it protects your long-term wealth.

Getting professional hand-holding is very important for your peace of mind.

Additional Steps You Must Take

Keep a separate emergency fund of Rs 3 lakh in liquid mutual funds.

Buy a good term insurance cover for husband (at least Rs 1 crore).

Ensure you have a good health insurance for the whole family.

Start a small SIP for your son’s education goal systematically.

Slowly explore freelancing as a German language expert to earn extra income.

Future Planning for Your Son

Education costs are rising 10%-12% every year in India.

For good education after 15 years, you will need a large corpus.

Start small SIPs in good mutual funds focused on child education.

Stay committed for long-term without withdrawals.

Education planning must be top priority after loan closure.

Final Insights

Renting out the old property will not solve your loan and income issues properly.

Selling the property now and clearing the loans is the better, safer step.

Remaining money should be invested wisely for monthly income generation.

Avoid buying new properties now. Focus on mutual fund income plans.

Build emergency reserves, insurance covers, and an education fund for your son.

Stay light, stay debt-free, and keep life flexible financially.

Your thinking is already mature. With correct action, your future will be very secure.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

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Cse jp noida or cse iet lucknow
Ans: Amit, Jaypee Institute of Information Technology Noida’s B.Tech in Computer Science & Engineering is a NAAC A++- and NBA-accredited deemed-to-be university under UGC, with over 250 PhD-qualified faculty delivering a cutting-edge curriculum. Its department maintains 47 specialised computing and research labs—including high-performance DGX workstations for AI/ML—and partners with global institutions for student exchange. Mandatory industry internships and a centralized Placement & Training Cell have driven a CSE placement consistency of around 94–100% over the past three years, with 214 recruiters making 505 offers to 449 CSE students in 2024.

The Institute of Engineering & Technology Lucknow is a fully residential, state-funded autonomous college under AKTU, recognized by AICTE and NBA. Established in 1984, its CSE department offers a JEE(Main)-based B.Tech, supported by experienced faculty, state-of-the-art computing and networking labs, and two centres of excellence in green hydrogen and electric vehicles for interdisciplinary exposure. A dedicated Training & Placement Cell and robust industry MoUs yield nearly 100% CSE placement rates with an average package around 8 LPA over the last three years, engaging top recruiters such as TCS, Wipro and Adobe.

For global research collaborations, superior AI/ML infrastructure, and slightly higher placement consistency, the recommendation is JIIT Noida CSE. If you prefer a government-backed institute with extensive interdisciplinary labs, residential campus life, and near-100% placements in a core-state environment, the recommendation shifts to IET Lucknow CSE. All the BEST for Admission & a Prosperous Future!

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I am going take admission in pvt cllg, What should i choose? Thapar, LPU or lnmit jaipur... I want to do cse..? I am very confused
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Hi Sir, I am Ajay from Bangalore. My son got admission into Mathematics and computing in RGIPT, Amethi. Also he is getting admission into IIST, Thiruvananthapuram. Which one he can select sir. Waiting for your reply. Thanking you sir.
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Nayagam P

Nayagam P P  |8243 Answers  |Ask -

Career Counsellor - Answered on Jul 08, 2025

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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