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37 Year Old With Wife and Daughter Wants To Achieve Financial Goals of 5 Crores in 15 Years: What Should He Do?

Ramalingam

Ramalingam Kalirajan  |7921 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 15, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Jul 11, 2024Hindi
Money

rediff.com Rediff Gurus Logo Hi Tarun Raj | Sign Out HealthHealth MoneyMoney RelationshipRelationship CareesCareer Ask your questions about health, money, relationship or careers here Ask Anonymously Tarun Tarun 1 Questions 1 Answers 0 Gurus 0 Bookmarks These questions will be answered soon. Not Answered yet Tarun Asked on - Jun 13, 2024 Hello Sir, I am 37 years old and my wife is 35 years old and 1.5 year old daughter. We both collectively earn 305000 Per Month after taxes (Private Job) I have an active home loan of total outstanding of 51 lakh out of 80 lakh (taken 2.5 years back) and currently I am paying 81000 EMI towards that. I have already made repayment of approximately 20 lakh in the past 18 months. Total loan tenure left is around 7.5 years. I have a loan from family members (non interest) 8 lkh which can be repaid as per flexibility. I have 4 LIC Polices for which I am paying 110000 annually and One HDFC ulip plan which is 15K annual. I have approximately 20 lakh in savings (all FDs), we have collective PF balance of 8 lakh and recently I have started investing in mutual funds SIP details are as following 10K SIP - Axis Mid Cap, 5K SIP - Axis small Cap, 5K SIP - HDFC mid Cap opportunity, 2K SIP - Axis Multi Cap. My monthly expenses are around 50000, I would need your suggestion on how to meet my personal financial goal of 5 cr in the next 15 years. I want to make sure I will have substantial funds in hand for My child's education/ Marriage and something for own when we retire. Please advise. Thank you

Ans: Firstly, I commend you for your diligent savings and the significant repayment on your home loan. Managing your finances with a young child and planning for the future requires foresight and discipline, which you have demonstrated well.

Let's break down your current financial status:

Income: Rs 3,05,000 per month (combined).

Home Loan: Outstanding Rs 51 lakhs with an EMI of Rs 81,000.

Family Loan: Rs 8 lakhs (interest-free).

Insurance Premiums: Rs 1,10,000 annually for LIC policies and Rs 15,000 for HDFC ULIP.

Savings: Rs 20 lakhs in fixed deposits.

Provident Fund: Rs 8 lakhs combined.

Mutual Funds SIP: Rs 22,000 per month.

Monthly Expenses: Rs 50,000.

You aim to build a corpus of Rs 5 crores in 15 years for your child's education, marriage, and your retirement. Given your income and expenses, this goal is attainable with strategic financial planning.

Optimizing Existing Investments
Review Insurance Policies
You have four LIC policies and one HDFC ULIP plan. While insurance is crucial, these traditional and ULIP policies often provide lower returns compared to mutual funds. Consider the following steps:

Surrender or Convert: Evaluate the surrender value of these policies. It may be beneficial to surrender them and redirect those funds into higher-yielding investments.

Reinvest Premiums: The Rs 1,25,000 annual premium can be reinvested into mutual funds for better returns.

Utilizing Fixed Deposits
You have Rs 20 lakhs in fixed deposits. While FDs are safe, their returns are usually lower than inflation. To grow your wealth, consider the following:

Partial Liquidation: Keep a portion in FDs for emergency funds, but reinvest a significant amount into mutual funds or other higher-yielding instruments.
Strengthening Your Investment Portfolio
Increasing Mutual Fund SIPs
Your current SIPs total Rs 22,000 per month. To reach your Rs 5 crore goal, consider increasing your SIP contributions. Here’s how:

Diversify: Ensure your portfolio has a mix of large-cap, mid-cap, small-cap, and multi-cap funds for balanced growth and risk management.

Step-Up SIPs: Gradually increase your SIP contributions as your income grows. This will help in compounding returns significantly.

Investing in Mutual Funds
Actively managed mutual funds can provide better returns compared to index funds. Here are the benefits:

Active Management: Professional fund managers actively manage these funds, seeking to outperform the market.

Flexibility: Actively managed funds can adjust their portfolio based on market conditions, potentially offering higher returns.

Debt Management
Home Loan Strategy
You have an outstanding home loan of Rs 51 lakhs. Managing this effectively can save you significant interest costs:

Prepay Principal: Use part of your fixed deposits to make lump sum prepayments. This reduces the principal and interest burden.

Reduce EMI or Tenure: Opt to reduce your loan tenure if possible. A shorter tenure can save you substantial interest.

Family Loan Repayment
The Rs 8 lakh family loan is interest-free, giving you repayment flexibility. Prioritize this after addressing high-interest debt and maximizing investments.

Planning for Child's Education and Marriage
Child Education Fund
Start a dedicated investment for your child's education:

Separate SIP: Initiate a separate SIP specifically for education expenses. Estimate future costs and adjust contributions accordingly.

Education Savings Plan: Consider child education plans offered by mutual funds that align with your goals.

Child Marriage Fund
Similarly, plan for your child's marriage:

Long-Term SIP: Start a long-term SIP focused on this goal. Utilize the power of compounding to grow your corpus.
Building Retirement Corpus
Systematic Investment Plan (SIP)
Increase your SIP contributions towards retirement:

Retirement Fund SIP: Set up a separate SIP for retirement, ensuring it aligns with your risk tolerance and time horizon.

Diversify: Include a mix of equity, debt, and hybrid funds for balanced growth and stability.

Provident Fund
Continue contributing to your provident fund. It provides a stable and secure component of your retirement corpus.

Emergency Fund
Maintaining an emergency fund is crucial. Here’s how to build and manage it:

Liquid Funds: Keep a portion of your fixed deposits in liquid mutual funds. They offer better returns than savings accounts and are easily accessible.

3-6 Months Expenses: Ensure your emergency fund covers 3-6 months of your living expenses, including EMIs.

Evaluating and Adjusting Your Plan
Regular Reviews
Financial planning is not a one-time activity. Regularly review and adjust your investments based on market conditions and life changes:

Annual Review: Conduct an annual review with a certified financial planner to ensure your investments are on track.

Adjust SIPs: Adjust your SIP contributions based on changes in income and expenses.

Risk Management
Ensure your investment portfolio aligns with your risk tolerance:

Diversification: Spread investments across various asset classes to mitigate risk.

Insurance: Maintain adequate life and health insurance to protect against unforeseen events.

Final Insights
Your goal of Rs 5 crores in 15 years is ambitious yet achievable with disciplined planning and strategic investments. By optimizing your current investments, increasing SIP contributions, and regularly reviewing your plan, you can secure a substantial corpus for your child's education, marriage, and your retirement.

Focus on diversifying your investments, managing debt efficiently, and maintaining an emergency fund. With consistent efforts and a clear strategy, you will be well-prepared for a financially secure future.

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  |7921 Answers  |Ask -

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

Asked by Anonymous - Jun 13, 2024Hindi
Money
Hello Sir, I am 37 years old and my wife is 35 years old and 1.5 year old daughter. We both collectively earn 305000 Per Month after taxes (Private Job) I have an active home loan of total outstanding of 51 lakh out of 80 lakh (taken 2.5 years back) and currently I am paying 81000 EMI towards that. I have already made repayment of approximately 20 lakh in the past 18 months. Total loan tenure left is around 7.5 years. I have a loan from family members (non interest) 8 lkh which can be repaid as per flexibility. I have 4 LIC Polices for which I am paying 110000 annually and One HDFC ulip plan which is 15K annual. I have approximately 20 lakh in savings (all FDs), we have collective PF balance of 8 lakh and recently I have started investing in mutual funds SIP details are as following 10K SIP - Axis Mid Cap 5K SIP - Axis small Cap 5K SIP - HDFC mid Cap opportunity 2K SIP - Axis Multi Cap I would need your suggestion on how to meet my personal financial goal of 3.5 cr in the next 15 years. I want to make sure I will have substantial funds in hand for My child's education/ Marriage and something for own when we retire. Please advise. Thank you
Ans: Your combined monthly income is Rs 3,05,000, which is quite commendable.

You have an outstanding home loan of Rs 51 lakh with an EMI of Rs 81,000.

You also have a loan from family members amounting to Rs 8 lakh.

Additionally, you are paying Rs 1,10,000 annually for four LIC policies and Rs 15,000 annually for an HDFC ULIP plan.

Your savings include Rs 20 lakh in fixed deposits and a collective PF balance of Rs 8 lakh.

You have recently started SIP investments in mutual funds.

Evaluating Your SIP Investments
Your current SIP investments are:

Rs 10,000 in Axis Mid Cap
Rs 5,000 in Axis Small Cap
Rs 5,000 in HDFC Mid Cap Opportunity
Rs 2,000 in Axis Multi Cap
These investments are diversified but predominantly focused on mid and small-cap funds. Mid and small-cap funds can provide high returns but are also high-risk.

The Importance of Diversification
Diversification helps manage risk by spreading investments across various asset classes.

Considering your goals and current portfolio, it’s essential to have a balanced mix of equity, debt, and other investments.

Recommendations for Your LIC Policies and ULIP Plan
You have four LIC policies and one HDFC ULIP plan.

These traditional insurance products often provide low returns compared to mutual funds.

Consider surrendering these policies and reinvesting the amount in mutual funds for better growth.

Balancing Your Loan Repayments and Investments
You have an outstanding home loan and a family loan.

Your home loan EMI is substantial.

It's crucial to balance loan repayments with investments.

Focus on clearing high-interest debts first while maintaining regular investments.

Building a Comprehensive Investment Portfolio
To achieve your goal of Rs 3.5 crore in 15 years, a strategic investment plan is essential. Here’s a suggested approach:

1. Equity Mutual Funds
Increase your allocation to large-cap and multi-cap funds for stability and consistent growth.

Consider actively managed funds for potential higher returns compared to index funds.

2. Debt Funds
Include debt funds in your portfolio to provide stability and regular income.

3. Hybrid Funds
Hybrid funds balance equity and debt, offering moderate risk and returns.

4. SIPs
Continue with SIPs for disciplined investing.

Consider increasing your SIP amount gradually as your income grows.

Reviewing and Adjusting Your Portfolio
Regularly review your portfolio and adjust based on market conditions and life changes.

Consult a Certified Financial Planner for personalized advice.

Planning for Your Child’s Education and Marriage
Education and marriage are significant expenses.

Start a dedicated investment plan for these goals.

Consider child education plans or SIPs in diversified equity funds.

Preparing for Retirement
Retirement planning is crucial.

Aim to build a corpus that provides a monthly income post-retirement.

Consider a mix of equity and debt funds to balance growth and stability.

Maximizing Your EPF and PPF
Your collective PF balance is Rs 8 lakh.

Continue contributing to EPF and PPF for long-term, tax-efficient growth.

Emergency Fund
Ensure you have an emergency fund covering 6-12 months of expenses.

Keep this fund in a liquid or short-term debt fund for easy access.

Health Insurance
Adequate health insurance is vital.

Ensure your family has sufficient coverage.

Consider increasing your cover if needed.

Steps to Achieve Your Financial Goals
1. Increase SIPs Gradually
As your income increases, raise your SIP contributions.

2. Diversify Investments
Balance your portfolio with equity, debt, and hybrid funds.

3. Regularly Review
Monitor and adjust your investments periodically.

4. Seek Professional Advice
Consult a Certified Financial Planner for tailored advice.

Conclusion
Your financial journey is unique, and achieving your goals requires a balanced, disciplined approach.

Prioritize clearing high-interest debts, diversify your investments, and regularly review your portfolio.

With careful planning and consistent efforts, you can secure your financial future and achieve your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7921 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 10, 2024

Asked by Anonymous - Jun 23, 2024Hindi
Money
Hello Sir, I am 37 years old and my wife is 35 years old and we have 1.5 year old daughter. We both collectively earn 305000 Per Month after taxes (Private Job) I have an active home loan of total outstanding of 51 lakh out of 80 lakh (taken 2.5 years back) and currently I am paying 81000 EMI towards that. I have already made repayment of approximately 20 lakh in the past 18 months. Total loan tenure left is around 7.5 years. I have a loan from family members (non interest) 8 lkh which can be repaid as per flexibility. I have 4 LIC Polices for which I am paying 110000 annually and One HDFC ulip plan which is 15K annual. I have approximately 20 lakh in savings (all FDs), we have collective PF balance of 8 lakh and recently I have started investing in mutual funds SIP details are as following 10K SIP - Axis Mid Cap 5K SIP - Axis small Cap 5K SIP - HDFC mid Cap opportunity 2K SIP - Axis Multi Cap. After my monthly expenses, I am left with 1 lakh in hand monthly. I would need your suggestion on how to meet my personal financial goal of 3.5 cr in the next 15 years. I want to make sure I will have substantial funds in hand for My child's education/ Marriage and something for own when we retire. Please advise. Thank you
Ans: Understanding Your Financial Situation
Income and Expenses
Monthly income: Rs 3,05,000 (after taxes).
Monthly expenses: Rs 2,05,000, leaving Rs 1,00,000 in hand.
Current Liabilities
Home loan: Rs 51 lakhs outstanding, Rs 81,000 EMI, tenure left: 7.5 years.
Family loan: Rs 8 lakhs, no interest, flexible repayment.
Current Investments
Savings (FDs): Rs 20 lakhs.
Collective PF balance: Rs 8 lakhs.
LIC policies: Rs 1,10,000 annually.
HDFC ULIP plan: Rs 15,000 annually.
SIPs: Rs 10,000 in Axis Mid Cap, Rs 5,000 in Axis Small Cap, Rs 5,000 in HDFC Mid Cap Opportunity, and Rs 2,000 in Axis Multi Cap.
Financial Goals
Goal: Rs 3.5 crores in 15 years for child's education/marriage and retirement.
Evaluating Your Investment Strategy
Current SIPs and Mutual Funds
Investing in mutual funds through SIPs is a wise decision for long-term growth.
Axis Mid Cap, Axis Small Cap, HDFC Mid Cap Opportunity, and Axis Multi Cap are good choices.
Consider diversifying your portfolio to include more funds from different categories.
LIC Policies and ULIP
LIC policies provide insurance but may offer lower returns compared to mutual funds.
ULIP plans combine insurance with investment but often have higher charges.
Evaluate the performance of these policies and consider if reallocating to mutual funds is beneficial.
Savings and Fixed Deposits
Rs 20 lakhs in FDs is a safe but low-return investment.
Consider moving a portion to higher-return instruments like mutual funds.
EPF and PPF
EPF balance of Rs 8 lakhs provides safety and tax benefits.
Continue contributing to EPF for long-term growth and security.
Strategy to Meet Financial Goals
Increasing SIPs
With Rs 1,00,000 left after expenses, you can increase your SIPs.
Prioritize mutual funds with a mix of large-cap, mid-cap, and multi-cap funds.
Aim to invest at least Rs 50,000 monthly in mutual funds.
Diversifying Mutual Funds
Diversify across equity, debt, and hybrid funds to balance risk and return.
Consider adding funds from different AMCs for better risk management.
Reviewing Insurance Policies
Review your LIC policies and ULIP plan.
If returns are not satisfactory, consider surrendering and reallocating to mutual funds.
Ensure you have adequate term insurance for life coverage.
Managing Liabilities
Home Loan
Focus on repaying the home loan to reduce interest burden.
With an Rs 81,000 EMI, prioritize repayment within the next 7.5 years.
Use bonuses or extra savings to make lump-sum repayments.
Family Loan
Flexible repayment terms allow you to prioritize other liabilities first.
Repay the family loan gradually as your financial situation improves.
Emergency Fund
Maintain an emergency fund to cover at least 6 months of expenses.
This ensures financial stability in case of unexpected events.
Long-Term Investment Strategy
Power of Compounding
Regular SIPs in mutual funds leverage the power of compounding.
Over 15 years, consistent investments can grow significantly.
Stay invested and avoid withdrawing prematurely.
Reviewing and Rebalancing
Regularly review your portfolio to ensure it aligns with your goals.
Rebalance periodically to maintain the desired asset allocation.
Tax Planning
Utilize tax-saving instruments like ELSS funds for better returns and tax benefits.
Continue contributing to EPF for additional tax savings.
Children's Education and Marriage
Start dedicated SIPs for your child's education and marriage.
Consider child-specific mutual funds or equity funds with a long-term horizon.
Final Insights
Stay Disciplined
Consistency in investing is key to achieving long-term goals.
Avoid timing the market and stay focused on your financial objectives.
Professional Guidance
Consulting a Certified Financial Planner (CFP) can provide personalized advice.
A CFP can help optimize your investment strategy and ensure you stay on track.
Long-Term Perspective
Keep a long-term perspective and avoid making decisions based on short-term market fluctuations.
The power of compounding works best with patience and regular investing.
Financial Security
By managing liabilities and investing wisely, you can achieve financial security.
Your disciplined approach will help you reach your financial goals.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7921 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 05, 2024

Asked by Anonymous - Nov 05, 2024Hindi
Money
Hi I am 39 years old working professional with take home salary of Rs. 2.25 lacs/month. I have taken home loan in last month for Rs. 30 lacs with monthly EMI of Rs. 60k. My monthly House hold expenses are Rs. 50k. From 2022 I am investing Rs. 35k in MF via monthly SIP in ratio of 40:30:20:10 in Large:Mid:small:Debt. I have 2 Sons for 8 years and 3 years respectively. My Goal is to have sufficient corpus for their higher education and to achieve financial independence ASAP. Pl guide..
Ans: Your proactive approach towards securing financial independence and planning for your children’s education is commendable. At 39, you have a robust salary, structured expenses, and disciplined investments. Let's examine your financial standing, assess your goals, and outline strategies for optimal growth and security.

Current Financial Overview
Monthly Income: Rs 2.25 lakh

Home Loan EMI: Rs 60,000 (new loan of Rs 30 lakh)

Household Expenses: Rs 50,000

Monthly SIP in Mutual Funds: Rs 35,000 (split across large, mid, small-cap, and debt funds)

You have taken significant steps with a home purchase and ongoing SIPs. Let’s optimise these resources to achieve financial independence and build a corpus for your children’s education.

Goal-Based Financial Planning
1. Higher Education Corpus for Children
Education expenses rise significantly due to inflation, particularly for quality higher education.

With your sons aged 8 and 3, plan for their higher education in 10-15 years.

To achieve this, increase your SIPs in equity-focused funds. Equities provide inflation-beating returns over the long term.

Maintain a systematic approach, with SIPs focused on growth-oriented funds (large and mid-cap funds are ideal).

Regularly review this corpus every 2-3 years to ensure it aligns with educational costs.

2. Financial Independence
Early financial independence requires strategic savings and investment growth.

Aim to build a corpus that covers at least 25 times your annual expenses.

At present, Rs 50,000 monthly expenses indicate a future goal corpus of Rs 1.5-2 crore, adjusting for inflation.

Your current SIPs are a great start, but gradually increase SIPs to achieve a sizeable retirement fund.

Consider adding more equity exposure for growth and inflation protection, while adding debt as retirement nears.

Debt Management and EMI Strategy
Home loan EMI is Rs 60,000, a significant commitment for 20 years. This can limit cash flow for other investments.

Aim to prepay your loan when possible to reduce interest outflow and loan tenure.

You may consider setting aside a small portion of bonuses or salary hikes for periodic prepayments.

Reducing debt earlier will provide more cash flow to focus on investments.

Optimising Your SIP Strategy
Equity Allocation: Your SIP allocation is split 40:30:20:10 across large, mid, small, and debt categories.

Large-cap funds offer stability, while mid and small caps drive growth. The debt allocation provides balance but may be increased as you approach retirement.

Avoid Index Funds: Index funds, while popular, lack active management, which can be limiting. Actively managed funds adjust to market conditions, providing a higher potential for returns. Certified Financial Planners (CFP) can guide you on the best funds for your goals, particularly with growth in mind.

Consider Regular Funds Over Direct: Regular funds provide personalised guidance, performance reviews, and rebalancing through Certified Financial Planners, which direct funds lack. Regular investments managed by certified experts offer better long-term growth.

Building Contingency and Protection
1. Emergency Fund
Ensure an emergency fund covering 6-12 months of expenses (about Rs 4-6 lakh), kept in easily accessible accounts like liquid funds.

This fund will protect your long-term investments in case of unexpected expenses.

2. Insurance Needs
Adequate life and health insurance are essential, especially with dependents and ongoing liabilities.

Life insurance should cover at least 10 times your annual income, which could be achieved with a simple term insurance policy.

Health insurance for the family is essential to avoid dipping into savings during medical emergencies. Ensure coverage is comprehensive to handle inflation in healthcare.

Tax Efficiency in Investments
New tax rules affect mutual fund capital gains. For equity funds, long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%, while short-term capital gains (STCG) are taxed at 20%.

Debt mutual funds are taxed as per your income slab. Plan to withdraw strategically to minimise tax impact.

Periodic portfolio reviews and structured withdrawals can help reduce your tax liability.

Nurturing Long-Term Wealth Growth
PPF and Debt Instruments: PPF and debt mutual funds provide stability but may fall short on inflation-adjusted growth. Maintain debt instruments as a smaller part of your portfolio until retirement nears.

Equities for Wealth Accumulation: Equities remain ideal for long-term goals like retirement and education due to their inflation-beating growth.

Review your mutual fund choices periodically to ensure they are high-performing and aligned with your growth goals.

Final Insights
Achieving financial independence and funding your children’s education are achievable with disciplined investments, a focus on growth, and debt management. Regular monitoring, along with a Certified Financial Planner’s advice, will ensure you stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7921 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 10, 2025

Asked by Anonymous - Feb 08, 2025Hindi
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Hi, We will be having 15 Lakhs in hand by April 3rd week and can hold for next 3 years as we are planning to build a house at a tier 2 city - Coimbatore because I don't believe in flats system for a longer run as I am skeptical on the Uds and re-construction in the future. Also, monthly we can invest 15k in mutual funds and 80k for which we have decided to go for RD (conservative approach). Some of the apps are providing attractive offers to get higher FD returns from small finance banks (Ujjivan and North East Sf bank etc) , should we invest or to stick with HDFC and ICICI banks. Provide us a mix of plan (debt, equity and FD if possible) for 15 lacs and time horizon is 3 years. Thanks for your help!
Ans: Your approach is well thought out. You have a clear goal and a conservative mindset for short-term funds. Since the time frame is only three years, capital protection is the priority. Equity is not recommended for short durations due to volatility. A balanced mix of debt, FD, and liquid instruments will be suitable.

Allocation Strategy
Fixed Deposits (FDs) – 50% (Rs. 7.5 Lakhs)

Large banks like HDFC, ICICI, and SBI are safer for significant amounts.

Small finance banks offer higher interest, but risk levels are slightly higher.

Consider splitting FD amounts across large banks and reputed small finance banks.

Prefer banks with high credit ratings and check premature withdrawal terms.

Debt Mutual Funds – 30% (Rs. 4.5 Lakhs)

Choose high-quality short-duration funds with low credit risk.

Avoid long-duration debt funds as they are sensitive to interest rate changes.

Ensure the fund has a stable past record and consistent returns.

Ultra Short-Term/Liquid Funds – 20% (Rs. 3 Lakhs)

Suitable for flexibility and better returns than savings accounts.
Provides liquidity in case of urgent requirements.
Low risk compared to other debt instruments.
Monthly Investment Plan
Recurring Deposit (RD) – Rs. 80,000 per month

A conservative option ensuring stability.

Good for funds that need to be available within 3 years.

Choose banks offering competitive interest rates.

Mutual Fund SIP – Rs. 15,000 per month

Prefer actively managed equity funds for long-term wealth creation.
Avoid index funds due to lack of active risk management.
Opt for a mix of flexi-cap and mid-cap funds.
Small Finance Banks vs Large Banks
Small finance banks like Ujjivan and North East offer higher FD rates.
They are safe under Rs. 5 lakh due to DICGC insurance.
If investing above Rs. 5 lakh in such banks, evaluate their financial health.
For higher safety, prefer top private and PSU banks.
Tax Considerations
Interest from FDs and RDs is taxable as per your income slab.
Debt fund gains are taxed based on your income slab.
Plan withdrawals strategically to reduce tax burden.
Finally
Capital protection should be the priority for short-term funds.
Diversify into FDs, debt funds, and liquid funds.
Invest in small finance banks cautiously.
Continue SIPs for long-term wealth creation.
Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

...Read more

Pushpa

Pushpa R  |51 Answers  |Ask -

Yoga, Mindfulness Expert - Answered on Feb 10, 2025

Asked by Anonymous - Feb 08, 2025Hindi
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सर मेरी शादी को 7साल हो गई है शुरू से ही हमारा रिलेशन खराब चल रहा है। आए दिन लड़ाई गली गलौज होती है। 2 बच्चे भी है। सेक्स लाइफ लगभग खत्म हो गई है। मैं क्या दूसरी लड़की के साथ बिना शादी के रह सकता हु।
Ans: I understand that you are going through a difficult time in your marriage. Relationships have ups and downs, and long-term conflicts can create emotional distress. However, before making any major decisions, I encourage you to reflect deeply on the situation.

Things to Consider:
Communication is Key – Have you tried open and honest communication with your spouse? Sometimes, expressing feelings calmly can help in resolving misunderstandings.
Professional Help – Marriage counseling or relationship therapy can provide guidance and help both partners understand each other better.
Impact on Children – Your children observe and absorb the environment at home. A peaceful and respectful atmosphere will shape their emotional well-being.
Seeking Happiness Outside Marriage – Instead of looking for temporary relief outside the marriage, try to work on improving the current relationship. If separation feels necessary, it should be done with mutual understanding and respect.
What Can You Do?

Practice meditation to calm your mind and gain clarity.
Talk to a relationship counselor or a trusted guide.
Try couple’s yoga or activities that promote bonding.
Every problem has a solution if approached with patience and wisdom. Stay mindful and take decisions that bring long-term peace and happiness.

R. Pushpa, M.Sc (Yoga)
Online Yoga & Meditation Coach
Radiant YogaVibes
https://www.instagram.com/pushpa_radiantyogavibes/

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Ramalingam

Ramalingam Kalirajan  |7921 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 10, 2025

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Hi, I m a 37 year old professional. I want to save for a corpus of 5 Cr in next 15-20 Years. I am presently invested in equity and LIC. What should I change pls advice. 6.5 lakhs already invested in 15 stocks Indus ind, IDFC first, Yes bank, GMM f, orient cem, Niacl, DB Realty, Athenaglo, sail, Hcc, Bombay dyeing, DCAL, Ovi eke foods, igl, EaseMyTrip, somatex, Bajaj hind sugar. Also have 14 lakhs in LIC ULIP AND 1.5 lakhs in ICICI SIGNATURE PLAN AND 1 lakh in DSP NIFTY madcap 150 quality 50 Kindly advise. Currently investing 25k per month, planning to do a step up 10% sip every year.
Ans: You are on the right track, but some changes will improve your wealth creation strategy.

Here’s a step-by-step approach to help you achieve your Rs. 5 crore target in 15-20 years.

Equity Portfolio Assessment
You have Rs. 6.5 lakh in 15 stocks. This is a highly scattered portfolio.

Many of your stocks are small-cap and volatile. Some lack strong financials or growth potential.

Too many stocks reduce focus and make it difficult to track performance.

Reduce the number of stocks to 8-10 strong businesses with consistent growth.

Focus more on large-cap and quality mid-cap companies.

Exit weak, low-growth, or speculative stocks and reinvest in quality businesses.

Mutual Fund Investments
Your current SIP of Rs. 25,000 is a good start.

A step-up SIP of 10% yearly will help you reach your goal faster.

However, your only mutual fund holding is a DSP Nifty Midcap 150 Index Fund.

Index funds do not outperform in all market cycles.

Actively managed mutual funds give better flexibility and higher returns in long-term investing.

Shift to a well-diversified mix of actively managed large-cap, mid-cap, small-cap, and flexi-cap funds.

Invest in 3-4 high-quality mutual funds with experienced fund managers.

This will help in better risk-adjusted returns than a single midcap index fund.

LIC and ULIP Investments
You have Rs. 14 lakh in LIC ULIP and Rs. 1.5 lakh in ICICI Signature Plan.

Investment-cum-insurance products like ULIPs have high charges and low returns.

The annual cost and fund management fees eat into returns.

Consider surrendering these policies and reinvesting in mutual funds for better growth.

Use pure term insurance instead of investment-linked insurance plans.

SIP Step-up Strategy
Your step-up plan of 10% yearly is a good strategy.

Ensure discipline in increasing the SIP each year.

Automate your SIPs to avoid missing any investments.

If you get any bonus or extra income, invest that in lump sum for faster corpus growth.

Debt Allocation for Stability
A 100% equity portfolio is risky, especially as your corpus grows.

Slowly add debt investments like short-term bonds, SDLs, or target maturity funds after 10 years.

A small allocation (10-20%) will help reduce volatility closer to your goal year.

Tax Efficiency and Withdrawal Planning
Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%.

Short-term gains (STCG) are taxed at 20%.

Plan redemptions smartly to minimise tax impact.

Use SWP (Systematic Withdrawal Plan) post-retirement for tax-efficient withdrawals.

Final Insights
Reduce your direct stock holdings and focus on quality businesses.

Move from index funds to actively managed mutual funds for better returns.

Surrender low-return ULIPs and reinvest in equity mutual funds.

Stick to your step-up SIP strategy for compounding benefits.

Add some debt allocation in later years for portfolio stability.

Review and rebalance your portfolio every year.

Following this disciplined approach will help you reach your Rs. 5 crore goal efficiently.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7921 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 10, 2025

Asked by Anonymous - Feb 09, 2025Hindi
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Hi - I am 52 years old planning to retire by 55 years. I am looking for the monthly source of 1.5 - 2 lakhs per month post my retirement ( without any PF/ Pension disbursement). I have around 50 L liquid money (Cash/ FDs/ other investment). I have 3 flats (worth around 5 cr) and plot with value around 1 cr. I am currently earning 4 L per month in hand salary. At this time, only liabiloty is my child college education which will be around 40 lacs in next 3 years. Can you suggest me investment options which will start giving me atleast 1.5 lakh per month income post 55 year of age. Thanks !!
Ans: You have done well in building a strong financial base. You have a good mix of assets. Your goal of generating Rs. 1.5-2 lakh per month after retirement is achievable. Proper planning will ensure financial stability.

Let’s analyse your current situation and find the best investment options.

Understanding Your Financial Position
You have Rs. 50 lakh in liquid assets.
You own three flats worth Rs. 5 crore.
You have a plot worth Rs. 1 crore.
Your only major liability is Rs. 40 lakh for your child’s education.
You are earning Rs. 4 lakh per month.
You want Rs. 1.5-2 lakh per month after retirement.
Your investment plan should balance risk and returns. It should also provide stable income.

Managing Immediate Financial Requirements
You need Rs. 40 lakh for your child’s education in the next three years.
Keep this amount in a safe instrument.
Use a mix of debt mutual funds and bank deposits.
Do not invest this amount in equity as your time frame is short.
This will ensure the required funds are available when needed.
Creating a Reliable Monthly Income
You need to generate at least Rs. 1.5 lakh per month. That means Rs. 18 lakh per year.

Your existing flats can provide rental income.
If you earn Rs. 75,000-1 lakh per month from rent, the shortfall will be Rs. 50,000-1.25 lakh.
The shortfall must be covered through investments.
To generate this income, we will use different investment instruments.

Allocating Liquid Assets
After setting aside Rs. 40 lakh, you will have Rs. 10 lakh left.
This amount should be used to create an emergency fund.
Keep 6-12 months of expenses in a mix of FD and liquid mutual funds.
This will act as a safety net.
Investing for Regular Monthly Income
Since you will retire in three years, a balanced investment approach is needed.

Debt-Oriented Investments
Invest a portion in debt mutual funds.
These provide stable returns and easy liquidity.
Debt funds are more tax-efficient than FDs.
Choose a mix of short-duration and medium-duration funds.
Dividend-Paying Mutual Funds
Invest a portion in mutual funds that provide regular payouts.
Choose actively managed equity mutual funds with a good track record.
This ensures capital growth and inflation-beating returns.
Withdraw through a systematic withdrawal plan (SWP) for tax efficiency.
Senior Citizen Savings Scheme (SCSS)
After you turn 60, you can invest in SCSS.
It offers regular interest payouts.
This is a safe and government-backed scheme.
RBI Floating Rate Bonds
These are safe and provide fixed income.
They adjust interest rates based on market conditions.
The interest is taxable, but safety is high.
Using Your Real Estate Assets
Rental income can be a key source of cash flow.
Check if rental yield is low (below 3%).
If returns are low, selling one property and reinvesting may be better.
Invest proceeds in diversified financial assets.
This will generate better returns than rental income alone.
Tax Efficiency and Withdrawal Strategy
Plan your withdrawals smartly to reduce taxes.
Use SWP in mutual funds instead of taking full redemptions.
SWP is more tax-efficient than bank interest or rent.
Spread withdrawals across multiple instruments.
This will reduce tax liability over time.
Health and Insurance Considerations
Ensure you have adequate health insurance.
Medical costs rise with age, so a higher coverage is needed.
A separate health fund of Rs. 10-15 lakh is recommended.
Adjusting Investments Over Time
Your portfolio should evolve based on market conditions.
After retirement, gradually shift more towards safe instruments.
Review the income generation every year.
If expenses rise, adjust investments accordingly.
Finally
You have a strong financial base. Proper allocation will ensure a stable income after retirement.

Use rental income as a primary cash flow source.
Invest in mutual funds and bonds for extra income.
Use SWP for tax-efficient withdrawals.
Keep an emergency fund for unexpected needs.
With the right strategy, you can enjoy financial freedom post-retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

...Read more

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

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