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50-Year-Old Seeks Investment Advice Amidst Financial Uncertainty

Ramalingam

Ramalingam Kalirajan  |6978 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 10, 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
D Question by D on Oct 07, 2024Hindi
Money

Hi Gurus I am 50 year old and my kids small but my saving not so much to save for both because after covid period the income from business is much or I cant switch the business what i am doing now . So i want to invest in sip or mutual fund but in bank they have fixed mandate to deposit the amount but as per business some times on that mandate i do not have same amount i want to investment when i have good money during month. kindly guide me

Ans: You are 50 years old with small children, and your savings are limited. The income from your business is inconsistent, especially after the COVID period. This irregularity makes it difficult to commit to fixed investments like bank deposits or structured investment plans. You are looking for flexible options like SIPs or mutual funds that can accommodate your fluctuating income. Let's explore a holistic solution that suits your financial needs, offers flexibility, and supports your long-term goals.

Assessing Your Financial Goals

Before investing, it's important to define clear goals for yourself and your children. Since your business income is inconsistent, we need to plan investments that provide flexibility and allow for long-term wealth creation. Based on your situation, here are some key goals to consider:

Child Education and Marriage: Plan for your children’s future education and marriage costs.

Retirement Planning: Ensuring financial independence in your later years without burdening your children.

Wealth Accumulation: Create a growing corpus by making flexible, strategic investments.

Advantages of Mutual Funds Over Fixed Bank Deposits

Mutual funds provide more flexibility than fixed bank deposits. While banks require a fixed mandate, mutual funds allow you to invest whenever you have surplus funds. You can increase or decrease the amount without penalties.

Systematic Investment Plans (SIPs): SIPs offer the option to invest a fixed sum regularly, but they can be stopped, paused, or modified anytime. This makes them flexible.

Lump Sum Investment: Whenever you have surplus income from your business, you can invest it directly into mutual funds.

Flexibility in Investments: Unlike fixed mandates in banks, mutual funds allow you to invest when you have good cash flow and skip months when business is tight.

Choosing the Right Mutual Funds

Considering the flexibility you need, you should focus on mutual funds that allow you to invest at your own pace. Active funds managed by professional fund managers are better suited than passive index funds, as they offer more potential for growth, even during market fluctuations. Some key factors to look for:

Active Fund Management: Actively managed funds can adjust to market conditions and try to outperform, unlike index funds, which simply track the market.

Regular Fund Investment (with Certified Financial Planner): Investing in regular mutual funds through a Certified Financial Planner (CFP) provides you access to their expertise. They can guide you in choosing funds that match your risk profile and financial goals.

Avoiding Direct Funds

You might have heard of direct mutual funds, where investors can invest without the help of a financial planner. However, managing direct funds yourself can be challenging, especially with market volatility. Regular funds, with the guidance of a CFP, provide you with professional management and better oversight, ensuring a more balanced portfolio.

Taxation Considerations for Mutual Funds

When selling mutual funds, you must account for taxes on capital gains.

Equity Mutual Funds: If your long-term capital gains (LTCG) from equity funds exceed Rs 1.25 lakh in a year, the excess amount is taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20%.

Debt Mutual Funds: Gains from debt funds are taxed based on your income slab, whether they are short-term or long-term.

Understanding the tax implications is essential for maximizing your post-tax returns. A CFP can help you navigate these taxes efficiently.

Building a Flexible Investment Plan

You need a mix of equity and debt mutual funds to ensure both growth and stability in your portfolio. Here's a possible structure for your investments:

Equity Mutual Funds for Growth: These funds are best for long-term wealth accumulation and can provide higher returns than traditional bank deposits over time. With professional management, they offer better growth potential.

Debt Mutual Funds for Stability: Since your business income fluctuates, debt mutual funds provide a safer investment avenue. These funds are less volatile and provide relatively stable returns.

Dynamic SIPs: Some mutual fund platforms offer "Dynamic SIPs," where you can vary the SIP amount based on your cash flow. This flexibility allows you to increase your investment when your business income is good and reduce it during lean months.

Lump Sum Investments When Possible: Whenever you have extra cash from your business, you can make lump sum investments in mutual funds. This strategy allows you to invest larger amounts when possible without committing to a fixed schedule.

Emergency Fund: A Crucial Step

Given the uncertainty in your business income, maintaining an emergency fund is essential. This fund should be 6-12 months' worth of your household and business expenses. You can keep it in a liquid fund or a high-interest savings account for easy access.

An emergency fund acts as a safety net during times of low business income or unexpected expenses. It ensures you don’t have to dip into your long-term investments during emergencies.

Risk Management: Life and Health Insurance

With small children and uncertain business income, securing your family’s financial future is crucial. Ensure you have adequate life and health insurance.

Life Insurance: Make sure you have a term insurance plan that covers at least 10-15 times your annual income. This will safeguard your family in case of any eventuality.

Health Insurance: Health costs can eat into your savings quickly. Ensure you and your family are adequately covered with a comprehensive health insurance plan.

Surrendering LIC, ULIP, or Investment-Linked Insurance Policies (if applicable)

If you have any LIC policies, ULIPs, or other investment-linked insurance policies, consider surrendering them. These products often give lower returns compared to mutual funds. You can reinvest the proceeds into mutual funds to earn better returns over time.

Addressing Your Children’s Future Needs

Planning for your children’s future, such as their education and marriage, is crucial. You can achieve this by starting dedicated SIPs in child-focused mutual funds. These funds offer a good mix of growth and stability, helping you accumulate the required amount for future expenses.

You can increase your SIP amounts during high-income months, ensuring you stay on track for their future financial needs.

Final Insights

Your business income may fluctuate, but you can still build a strong financial plan by choosing flexible investment options. Mutual funds, with their flexibility, allow you to invest based on your cash flow. By building a balanced portfolio of equity and debt mutual funds, you can ensure both growth and stability.

Avoid fixed deposit mandates that restrict your cash flow. Instead, invest dynamically through mutual funds and lump sums when you have surplus cash. Also, ensure you are well-insured to manage risks.

With a sound investment strategy and the guidance of a Certified Financial Planner, you can achieve your long-term goals, secure your children’s future, and enjoy a stress-free retirement.

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

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Sir I am 37 year old ... having salary of 1.2 lacs per months and want to save money for child higher education. Please suggest how to invest in SIP currently having 14500 SIP in Sbi energy opportunities fund lumsum 50000 Hdfc noncyclic consumer fund Sip of 4000 Edelweiss small cap fund sip of. 4000 Kotak emerging equity fund sip of. 4000 Flexi cap. 1500 Hdfc multicap fund. 1500 (50000 lumsum) Icici prudential value discovery fund. 1000 Total SIP per month 14500 and will increase to 30000 but Please review and suggest if i have chossen correct category or need to switch Waiting for your suggestion and thanks in advance
Ans: It's great to see your proactive approach towards saving for your child's higher education. With your current SIP investments, you're already on the right track. However, it's essential to regularly review and adjust your investment strategy to align with your goals and market conditions.

Considering your income and the goal of funding your child's education, diversifying your investments further could be beneficial. You might consider adding SIPs in diversified equity funds or balanced funds to spread the risk and potentially enhance returns.

A Certified Financial Planner can provide personalized advice after assessing your risk tolerance, investment horizon, and financial goals. They can help you optimize your portfolio, recommend suitable fund categories, and suggest any necessary switches to align with your objectives.

Remember, investing is a journey that requires periodic review and adjustments. As you plan to increase your SIP amount, it's crucial to ensure that your investments are well-diversified and aligned with your goals. Seeking professional guidance can help you make informed decisions and achieve your savings target. Best wishes for your child's bright future!

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Ramalingam Kalirajan  |6978 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 13, 2024

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Hai sir, I am working in The Singareni Collieries Company Limited. My gross salary 60000 Net salary 45000 In that 25500/- rupees for regular chits with 1% interest. I had 2 kids and both are one month. How to start investment in sip and mutual fund and I have to income at age children 22y
Ans: You have a stable job with a net salary of Rs 45,000. You are already committed to chits, which takes up a significant portion of your income. With two children, who are just one month old, you’re thinking ahead. You want to plan for their future, especially for when they turn 22 years old.

Evaluating Your Current Commitments

Chit Fund Involvement: You’re investing Rs 25,500 in regular chits. While chits offer liquidity, they may not be the best for long-term wealth creation. The 1% interest is relatively low compared to other investment options.

Remaining Salary: After paying for chits, you have Rs 19,500 left. This amount needs to cover your living expenses and potential investments.

Starting SIPs and Mutual Funds

Starting Small: Begin with SIPs that fit your budget. Even starting with a small amount, say Rs 2,000 to Rs 3,000 per month, can make a difference over time.

Choosing the Right Funds: For long-term goals like your children's education, consider equity-oriented funds. These have the potential to grow significantly over 22 years.

Avoid Index Funds: Index funds track the market but lack flexibility. Actively managed funds can adapt to market changes and may offer better returns.

Planning for Your Children's Future

Goal-Based Investing: You want income when your children turn 22. This aligns with their higher education. SIPs in equity mutual funds can help build a solid corpus over time.

Increase Investments Gradually: As your income grows or once you complete your chit obligations, increase your SIP contributions. This will boost your investment corpus.

Regular Fund Reviews: Work with a Certified Financial Planner to review your investments regularly. This ensures they are on track to meet your long-term goals.

Understanding the Drawbacks of Direct Funds

Limited Guidance: Direct funds may seem cheaper but require active management by you. This can be challenging without financial expertise.

Benefits of Regular Funds with CFP Guidance: Investing through regular funds managed by a Certified Financial Planner provides expert advice. It helps in selecting the right funds and managing risks.

Maximizing Your Savings

Emergency Fund: Ensure you have an emergency fund. It should cover at least 3 to 6 months of your expenses. This can protect your investments in case of unexpected financial needs.

Avoid High-Cost Debt: If possible, avoid high-interest loans or debt. Focus on investing your savings in growth-oriented options like mutual funds.

Final Insights

You’re on the right track by planning for your children’s future. Starting SIPs in equity mutual funds can help you build a substantial corpus over the next 22 years. Keep your goals in mind, and invest steadily. Gradually increasing your SIP contributions and working with a Certified Financial Planner will ensure your investments are aligned with your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Me and my bf are resident docters in a hospital .We hardly had time with each other ,but always supported each other in difficult times.Through fights ,breakups ,patch ups ,we were there all in these 3 years .He has always been more career oriented , hardly expressed any feelings on his own for me ,he only expressed or said i love when i asked him too .Now i m in my last year of md exams ,he got selected in aiims delhi dm since he was senior to me .Now he hardly communicates with me ,like in 48 h ,all we do is talk for 2 min ,where he hardly says anything ,sometimes he talks is about work.I have asked him multiple times if anything wrong i did ,he has kept on saying he is busy ,he says atleast i call u ,i hardly have time for anyone.He says all he sees now is his work ,patients and career . I have always adjusted according to him ,now it is becoming difficult to adjust .I cant take the trauma of leaving him ,because i have very important exams in 4 months .He was my only bestfriend ,my guide ,my love .He has been changed person .But i m studying and working almost 20 hrs , how to cope up ,i m all alone in this melodrama ,sometimes i wish i was dead
Ans: Dear Anonymous,
Your feelings are valid. It is indeed difficult to adjust to an unexpressive partner. One out of two things can be happening here- one, he does not know how to express his emotions; that is who he is fundamentally. Two, the work pressure and hectic hours have made him detached. You can try having an open conversation with him about it and let him know that you are not being able to carry on like this. Communicate your concerns and how his attitude toward you has affected your mental health. That is the only way to move forward. After the conversation either of two things will happen- it will be a wake-up call for him and things will change for the better. Or, he will continue to behave the same way and you have to rethink the relationship. My suggestion is to have the talk after your exams. I know you think he is your everything, but you are your everything. Do not let this relationship waste the years of hard work you have put into your studies. Focus on yourself and trust me when I say this- value yourself the way you want others to value you. If you don't, why would anyone else?

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Asked by Anonymous - Oct 31, 2024
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I am married for last 3 years. I found out about my wife's sexual past just months into our marriage. I even enquired her about her past before our marriage and told her that I don't tolerate lies and don't believe in premarital sex but she still lied to me and deceived into a fraud marriage. So I started sleeping with prostitutes and call girls as a revenge. I even had an affair with a divorced woman but that didn't last long. I know I didn't do anything wrong. She is the one is in the wrong. She deceived me into a fraud marriage. Should I forgive her and live with her?
Ans: Dear Anonymous,
instead of dealing with the problem at hand, you decided to go and create more problems?
What prevented you from actually talking to your wife. If you felt cheated, was it not possible for you to channel the anger by having a conversation with her about it? Revenge never helped anyone, but well...
Now, by blaming her, what can happen is that she will defend and you will again accuse and this will go on...
So, yes you are feeling cheated and deceived by her. You have two ways of approaching it. rebuild your marriage and start with a clean slate which means she cannot keep secrets with you anymore OR you can build more anger which is bound to destroy the marriage. I would suggest the first option where you get a fair chance to express how you feel to her and also come clean with your revenge scene with her...this may help both of you put things aside and rebuild the connection. Give this a fair shot!

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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Asked by Anonymous - Nov 05, 2024Hindi
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Hello, I am a 42 year old woman with a 14 year old boy and a 12 year old girl. Ours was an arranged marriage. I got married at age 23 and my husband is just 2 years older to me. Right from the beginning my husband is great at cooking, household chores etc but never expresses romance openly. I was always a emotional woman who slowly turned to him and stopped expressing my needs well. So far out marriage was great cos I avoided confrontations and arguments. Only thing was he was always a critical person and I am emotional girl . Since I cld not express myself clearly as he never heard me, my communication with him sounded nagging, comparing and complaining. In 2011, he cheated on me and I learnt on his affair. I did not know how to process this phase so immediately forgave him within 2-3 days and even ended up being pregnant with my daughter. However he never used to speak on his past affair not were my feelings resolved. Whenever he would speak rudely or yelled at kids or me for little things, the past trauma would trigger and I would openly remind him of his grave mistake. This went on and he would get agitated and keep quiet. One day he did tell me that lifelong he needs to live with this past of me reminding him. But he has never understood the trauma I have gone through. I have just repressed it all along. Cut short 2024- there is lots of resentment with us. In 2022, I saw messages that he exchanged with another lady colleague on romantic songs , good morning messages and they would casually meet for lunch etc . This time I flew in rage and assumed he has cheated on me again. Told him first time I was a fool who didn't notice things right under my nose and now this is the latest. We had a big fight. I reminded him of his dirty past. At first he looked shocked from these allegations and told me he will clarify everything later. But next day in 2022 , when I asked him, he appeared to be a changed man and sounded more confident that he didn't do anything wrong. I pestered him to take me to office, we went to his office I met this lady and politely told her to stop sending good morning messages to my husband. I indirectly told her I have trust issues because of a past but did not elaborate. My husband who had taken me to the office , later was annoyed because apparently the woman colleague was annoyed about me coming to office and also mentioned about my trust issues. At this point this great husband spilt out to her that he had cheated on me. I never ever disclosed anything to her. Later he messaged me saying he was very annoyed and upset that I disclosed the dirty past to his colleague and if anything happens to his job he will never forgive me. I did tell him I never disclosed but he did not belive me. From 2022 until now we are almost in a silent divorce phase. We sleep in different bedroom and only communicate basic stuff on milk, curd , veggies etc He had never connected to me emotionally and would always get annoyed when I wld cry or show my frustrations. Now after all this he has literally cut me off emotionally. In this period from 2022-till now I did try to get back to normal but his vibes are very negative and disconnected. So even I too started distancing myself. During 2022, after the incident he had mentioned on how it is important to work, ve independent and how he favours open relationships ( non sexually). I was always working but earned lesser and used to depend on him a lot. Now I have changed in these 2 years, I have a better job and am not at all dependent on him emotionally, physically or mentally. Infact I pitch in to our household expenses.Our lives are totally disconnected and we there just for the kids. He cooks for all of us, I take care of remaining chores and help them in their studies . We don't attend family events and this has left many guessing on our status. I have lot of unresolved emotions and since he cannot process my emotions or least interested to hear me out I don't know when I will explode. I am just repressing my feelings and keeping a happy cheerful face for the family and kids. We even went for a vacation for kids sake where we just interacted with kids. Kids know things are not allright and pray for us together. I know this isn't healthy for me and I will invite psychosomatic issues in life later on. I am still attached to him and maybe once he expresses a sorry or a remorse and have a hope we can fall back in love again. Why can he never understand that emotional trauma that I have gone through Inspite of being loyal to him always. For once if he just uses kind words and apologises I will forever love him and forget everything.
Ans: Dear Anonymous,
Your husband perhaps is someone who is not great at conflict management; he finds it easier to avoid it and avoidance can mean that he hopes that it will go away or that you will stop talking about it or that he can find ways of actually pinning the blame on you for the way that he is feeling.
So, you will come across as nagging and may also feel guilty for asking him to listen to the way that you feel about the past incident. This is classic avoidance response from him that will make you wonder of you are actually wrong and at some point you may even start justifying his actions.
Repression is temporary; eventually all the emotions will collect themselves and hit back when you least expect it. If you want him to hear you and the way you have felt about his cheating, he will again get pushed into an avoidance mode. He has not learned any other way of handling conflicts. So, either you can go to couples counseling together OR you accept this side of him. Sounds too much to do, yeah? But how can you change a person who does not want to change. Some people also cannot express their love the way you have mentioned.
Since you still love him, I can only assume that the marriage holds a lot of significance for you. Then you can be happy only when he changes OR you accept him... which one seems more doable, start with that first...who knows if an external person like an expert can actually guide the two of you, things may fall in place!
I would also suggest requesting him for an honest chat where he is also in a space to LISTEN to you...try...

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

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

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