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Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 28, 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
Asked by Anonymous - Apr 15, 2025
Money

Hello sir. I am a 23 year old student, currently doing my MBA right now. I want to start saving up, for the future, while clearing my loan (~20 lakh, 7.5% interest). An average placement in our college will be around 12-13 LPA in hand. I want some guidance on how to start the habit on investing, best areas to invest in and grow a portfolio (save up for major event, marriage, home, car, vacations) . I am more on a conservative side of investing. Please guide.

Ans: Starting to save and invest during MBA is a very good decision.

Thinking about loan repayment and investment together shows maturity and responsibility.

Planning early for life goals like marriage, home, and vacations is the right way forward.

It is very rare at 23 years to think about financial freedom, so you are on the right path.

You are planting the seed of a beautiful financial future today.

Understanding Your Current Financial Situation
You are 23 years old and pursuing MBA right now.

You have an education loan of around Rs 20 lakh at 7.5% interest.

Your future income is expected to be around Rs 12-13 lakh in hand.

You are a conservative investor by nature, preferring safety with some returns.

You want to build savings for marriage, house, car, and vacations.

You want to build the habit of investing from now itself.

Importance of Clearing Loan First
Your education loan has a high interest of 7.5% per year.

Any investment you do must beat 7.5% returns after tax to make sense.

Otherwise, it is better to repay the loan early to save on high interest.

Clearing loan gives peace of mind and improves your financial freedom.

It is better to first build an emergency fund and then partially focus on loan closure.

Emergency Fund Must Be Your First Step
Before investing anywhere, build an emergency fund for 6 months expenses.

Keep this fund in liquid mutual funds or simple bank fixed deposits.

Emergency fund gives you safety if job placement is delayed or salary is less.

Emergency fund must be untouched unless there is a real financial emergency.

This simple step protects you from taking unnecessary loans later.

How to Approach Loan Repayment and Investment Together
Allocate 70% of your first year salary towards clearing the education loan.

Allocate 30% towards building your emergency fund and starting investments.

Once loan becomes small, reverse the ratio to 30% loan and 70% investments.

Discipline and patience are your biggest friends here.

Always try to prepay at least once every 6 months.

You will save a lot of interest by small extra prepayments regularly.

Choosing the Right Investment Options for You
As a conservative investor, focus on balanced and diversified products.

Invest in a mix of conservative hybrid funds and multi-cap mutual funds.

Choose only actively managed mutual funds and not passive index funds.

Index funds just copy the market and give average returns only.

Active funds, managed by expert fund managers, aim to beat the market.

Certified Financial Planners can guide you to select right funds through trusted MFDs.

Investing through regular plans via MFDs helps you get proper reviews and service.

Direct funds miss this regular portfolio review and personalised hand-holding.

Regular review is needed at least once every 6 months.

It is better to pay a small fee for expert guidance and stay on track.

How Much to Invest Initially
Start small with Rs 5000 to Rs 8000 per month while studying.

Once you get placement and steady salary, increase it to Rs 20,000 monthly.

You can aim for 30% of your in-hand salary to go towards investments.

If salary is Rs 1 lakh per month, target Rs 30,000 SIP after loan reduces.

Gradual increase in SIP amount every year with salary hike is very important.

This method is called 'Step-up SIP' and helps wealth grow faster.

Best Investment Areas for Your Goals
For marriage and car goals (2-5 years), invest in conservative hybrid funds.

For home purchase (7-10 years), invest in balanced advantage and multi-cap funds.

For vacations (2-3 years), invest very conservatively in short duration funds.

Always match your investment type with your goal’s time horizon.

Short term goals = safer products, long term goals = slightly aggressive products.

Taxation Awareness from Beginning
Equity mutual funds gains above Rs 1.25 lakh in a year are taxed at 12.5%.

Short term capital gains (holding period less than 1 year) taxed at 20%.

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

Always invest knowing about tax rules to avoid surprises later.

Plan redemption smartly to minimise tax outgo and maximise returns.

Importance of Setting Goals Clearly
Write down each goal separately with approximate time and cost today.

Adjust the cost for 6%-7% inflation per year.

Goals must be divided into short, medium and long term.

Short term = next 3 years, medium term = 4 to 7 years, long term = 8 years+.

Clarity about goals will help you stay disciplined during market ups and downs.

Why Not to Invest in Real Estate Now
Real estate needs big capital and high maintenance cost.

Liquidity is very poor and selling property is not easy.

Loan for real estate will again create financial pressure.

In early career stage, it is better to stay flexible and liquid.

Mutual funds and SIPs give liquidity, diversification, and better growth potential.

Importance of Insurance Coverage
Once you get a job, buy a term insurance for Rs 1 crore at least.

Premium will be very low because of your young age and good health.

Take a simple term plan only, without any investment component.

Also buy a health insurance policy independent of employer’s coverage.

Having good insurance protects your wealth from unexpected emergencies.

Building the Habit of Saving and Investing
Start SIPs in mutual funds on salary day itself.

Make investment automatic so that you never miss it.

Track your expenses monthly and cut wasteful spending.

Increase SIP amount every year at least by 10%-15%.

Stay invested for long periods without withdrawing for small needs.

Investing is a slow and steady process, not a lottery ticket.

Emotional Discipline is Very Important
Markets will rise and fall many times in next 15 years.

Never stop your SIP during market falls.

In fact, during market fall, you should increase SIP if possible.

Time in market is more important than timing the market.

Stay connected with a Certified Financial Planner for guidance and motivation.

Regular reviews of your investments are necessary to stay aligned to goals.

Special Tips for You as a Beginner
Read basic finance books to increase your knowledge.

Avoid chasing fancy stocks, crypto, and unknown investment schemes.

Stick to simple, proven mutual fund strategies for wealth creation.

Save first, spend later should become your habit.

Enjoy life but without compromising on savings.

Start early, stay consistent, and let compounding do the magic.

Action Plan for You
Build Rs 1 lakh emergency fund in liquid mutual fund first.

Start SIP of Rs 5000 to Rs 8000 monthly till MBA completion.

Repay education loan aggressively after getting a job.

Gradually increase SIP to Rs 20,000 and later to Rs 30,000 monthly.

Stay invested for minimum 7-10 years for major goals.

Keep reviewing with a Certified Financial Planner once every year.

Finally
You are at the best age to build wealth safely and steadily.

Early action multiplies your wealth power hugely later.

Clearing your education loan fast should be your top priority now.

Saving and investing must become a habit, not a one-time thing.

Diversified mutual funds will help you balance safety and growth smartly.

Protect yourself with proper term and health insurance at the earliest.

Avoid distractions like real estate, direct stocks, crypto at early stage.

Focus on discipline, patience and simplicity in financial life.

15 years later, you will thank yourself for the seeds you plant today.

Wishing you a financially prosperous and peaceful journey ahead!

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 Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 07, 2024

Asked by Anonymous - May 07, 2024Hindi
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Hello sir I'm Kritika .I'm 25 yr old this is my 1 st job earning 4.5 lpa can you suggest me how should I start saving I wanted to do MBA from an elite bschool that's I want to save money to repay my half of the education loan
Ans: Kritika! Congratulations on starting your first job and being proactive about your finances. Here's how you can start saving effectively to achieve your goals:
1. Set Clear Goals: Identify your short-term and long-term financial goals. Since you aspire to pursue an MBA from an elite business school, saving for education expenses should be a priority. Determine the estimated cost of the MBA program and break it down into manageable savings targets.
2. Create a Budget: Start by tracking your expenses and creating a budget. Allocate a portion of your income towards essentials like rent, groceries, utilities, transportation, and healthcare. Set aside a portion for discretionary spending on entertainment and leisure activities.
3. Emergency Fund: Build an emergency fund to cover unexpected expenses like medical emergencies or job loss. Aim to save at least 3-6 months' worth of living expenses in a high-yield savings account or a liquid fund.
4. Invest Wisely: Consider investing a portion of your income in mutual funds or SIPs (Systematic Investment Plans) to generate returns over the long term. Since you have a specific goal of repaying half of your education loan, opt for investment avenues that offer liquidity and growth potential.
5. Minimize Debt: Since you plan to take an education loan for your MBA, focus on minimizing other debts, if any. Avoid accumulating high-interest debt and pay off any outstanding balances as soon as possible to improve your financial health.
6. Explore Scholarship Opportunities: Research scholarship options available for MBA programs. Apply for scholarships that align with your academic achievements, extracurricular activities, and career aspirations. Winning scholarships can significantly reduce your reliance on loans for funding your education.
7. Maximize Earnings Potential: Look for opportunities to increase your income through career advancement, skill development, freelancing, or part-time work. Increasing your earning potential will enable you to save more towards your education goals and repay your education loan faster.
8. Seek Financial Advice: Consider consulting with a Certified Financial Planner (CFP) to create a personalized financial plan tailored to your goals and circumstances. A professional can provide valuable insights and guidance to optimize your savings and investment strategy.
Remember, saving for your education is an investment in your future. Stay focused, disciplined, and committed to your financial goals. With careful planning and diligent saving, you can achieve your dream of pursuing an MBA from an elite business school and repay your education loan without compromising your financial stability. Best of luck on your journey!

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Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 19, 2024

Asked by Anonymous - May 18, 2024Hindi
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Money
Hi sir my age is 29 how to start in investment my one income 900 rupees I don't have any savings please help me how to savings stat and investment plans
Ans: It's great that you want to start investing and saving. With an income of ?900 per month, it can be challenging, but every small step counts. Let’s explore how you can begin saving and investing.

Understanding Your Current Financial Situation
First, understand your income and expenses. Track your monthly spending to identify areas where you can cut back. Even small savings can add up over time.

Setting Realistic Goals
Start with small, achievable goals. Aim to save a portion of your income each month. This helps build a habit of saving.

Creating a Budget
Track Income and Expenses

List all your monthly income and expenses.
Identify non-essential expenses you can reduce or eliminate.
Allocate Savings

Aim to save at least 10% of your income. With ?900, this means saving ?90 each month.
Emergency Fund

Build an emergency fund for unexpected expenses. Start small, aim for ?500 initially.
Saving Methods
Savings Account

Open a basic savings account. It’s safe and earns a small interest.
Recurring Deposit (RD)

Consider starting a recurring deposit with your bank. You can deposit a small fixed amount each month. It’s a disciplined way to save.
Basic Investment Options
Systematic Investment Plans (SIPs)

Start a SIP with as little as ?500 per month. Mutual funds have options for low initial investments. SIPs help in disciplined investing and can offer good returns over time.
Public Provident Fund (PPF)

PPF is a safe and long-term investment option. You can start with small amounts and increase contributions as your income grows.
Government Schemes
Pradhan Mantri Jan Dhan Yojana (PMJDY)

Open a Jan Dhan account. It offers no minimum balance requirement and other benefits like insurance.
Atal Pension Yojana (APY)

A pension scheme for workers in the unorganised sector. You can contribute small amounts to secure your retirement.
Increasing Your Income
Skill Development

Invest in learning new skills to increase your earning potential. Look for free or low-cost courses online.
Part-Time Work

Consider part-time jobs or freelancing to supplement your income. This additional income can boost your savings and investment capacity.
Discipline and Patience
Consistency

Regular saving and investing, no matter how small, will yield results over time. Be consistent with your contributions.
Avoid Debt

Avoid unnecessary loans or credit. If you must borrow, ensure you can manage the repayments.
Reviewing and Adjusting
Regular Review

Review your budget and savings plan regularly. Adjust your savings and investment as your income grows.
Seek Advice

Consult a Certified Financial Planner for personalized advice as your financial situation evolves.

Starting with a small income can be tough, but your determination to save and invest is commendable. Every rupee saved is a step towards financial security. Stay committed, and over time, you’ll see the benefits of your disciplined approach.

Conclusion
Beginning your investment journey at 29 with a limited income is challenging but possible. Start by creating a budget, saving consistently, and exploring safe investment options. Increase your income through skill development and part-time work. Regularly review your progress and adjust your plan as needed. Your commitment to saving and investing will pave the way for a secure financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 21, 2024

Asked by Anonymous - Sep 20, 2024Hindi
Money
I am 40 year old working in PSU bank.My net salary is Rs.50000/- per month.I have 1 girl child aged 5 years.I have no saving and invested only 200000 in PPF and 100000 in MF sip (4000/-per month). I have 50 lakh life cover and 25 lakh health cover.I have 1 vehicle loan of 14 lakh.How I start investing for better future ?
Ans: You are 40 years old and work in a PSU bank. Your net monthly salary is Rs. 50,000. You have a 5-year-old daughter and need to plan for her future as well as your retirement.

At present, your financial situation includes:

A vehicle loan of Rs. 14 lakh.
Life insurance cover of Rs. 50 lakh.
Health insurance cover of Rs. 25 lakh.
Rs. 2 lakh in PPF.
Rs. 1 lakh in mutual fund SIP with Rs. 4,000 invested monthly.
Although you’ve made some initial investments, you need to expand your portfolio to secure both your and your daughter's future. Let's explore your situation from a 360-degree perspective to provide a detailed, sustainable plan.

Monthly Budget Analysis

You have Rs. 50,000 monthly income, but without savings, the focus should be on managing your expenses and repaying your loan.

Reviewing expenses: List all your fixed and variable expenses. Aim to save at least 20% of your income.

Emergency fund: Build an emergency fund of six months' expenses. You can start with Rs. 5,000 per month until you reach this goal. You can use a liquid mutual fund to park this money.

Addressing the Vehicle Loan

Having a vehicle loan of Rs. 14 lakh is a significant liability. This loan may be affecting your ability to invest more each month.

Prepayment strategy: Assess your loan interest rate. If it’s above 10%, try to pay off this loan faster. Start by allocating Rs. 5,000 to 10,000 extra towards the EMI each month. This will help you reduce the interest burden.

Loan refinancing option: If possible, you can refinance the loan at a lower interest rate to reduce your EMI. But only do this if the new rate provides significant savings.

Investment Strategy for Future Goals

To secure your future and your daughter's, you need to increase your monthly investment and diversify.

Increase SIPs: You are investing Rs. 4,000 per month in mutual funds. This amount is quite low. Ideally, try to allocate at least 20% of your income towards investments. Increase your SIPs gradually, aiming for Rs. 10,000 or more monthly.

Diversifying mutual funds: Instead of investing in a single mutual fund, diversify your portfolio by adding different categories such as large-cap, mid-cap, and small-cap funds. These categories help balance the risk and return over the long term. You can consult a Certified Financial Planner (CFP) to help choose suitable funds.

Focus on regular funds: If you’re investing in direct funds, consider switching to regular funds through a trusted mutual fund distributor or CFP. Regular funds allow for better guidance and ongoing advice from a financial expert. This ensures your portfolio stays on track with your goals.

Public Provident Fund (PPF)

You already have Rs. 2 lakh in your PPF account. The PPF is a good instrument for long-term wealth creation with tax benefits.

Increase PPF contributions: To build a stable retirement corpus, try to invest Rs. 10,000 annually in PPF. However, focus on SIPs more because mutual funds generally give better returns in the long term.
Insurance Review

You already have a life insurance cover of Rs. 50 lakh and a health cover of Rs. 25 lakh. These are good steps, but you can make a few tweaks to improve your protection.

Increase life cover: Since your daughter is still young, it would be wise to increase your life cover. A rule of thumb is to have a cover that’s 10-12 times your annual income. You can look into a term plan that provides high coverage at affordable premiums.

Health insurance: Your health insurance cover of Rs. 25 lakh is sufficient for now. However, as medical costs rise, review it every 3-5 years. You may want to increase the cover in the future.

Child's Education Planning

Your daughter is 5 years old, and planning for her higher education is crucial. Considering education inflation, you should start setting aside a dedicated amount each month for her future needs.

Education SIPs: You can open a separate mutual fund SIP dedicated to your daughter’s education. Start with Rs. 5,000 per month. Equity mutual funds are ideal for long-term goals such as education because they can offer higher returns over time.

Child plans: Avoid child insurance plans that combine investment and insurance. These plans often offer low returns and high costs. Instead, focus on mutual funds and create an education corpus separately.

Retirement Planning

You’re 40 years old and likely have around 20 years before retirement. It’s essential to create a retirement plan that ensures you can maintain your current lifestyle post-retirement.

Increasing SIPs for retirement: Apart from your daughter’s education, focus on building a retirement corpus. Increase your monthly SIPs to Rs. 10,000 specifically for retirement. You can invest in a combination of large-cap and flexi-cap funds, which provide both stability and growth over the long term.

Avoiding annuities: Don’t invest in annuities for retirement. They typically offer low returns and are not flexible.

PPF as retirement corpus: Continue contributing to your PPF account. This will give you a fixed income during retirement, along with the flexibility to withdraw at maturity.

Asset Allocation and Risk Management

Balancing risk and return is crucial when planning for long-term financial goals.

Equity exposure: At 40, you should have a higher allocation to equities for better returns. Over time, you can gradually reduce this equity exposure as you approach retirement.

Debt instruments: Along with equity mutual funds, you can also allocate some portion to debt instruments for stability. Consider investing in balanced hybrid funds, which offer a mix of equity and debt. These funds reduce the risk and help balance your portfolio.

Review annually: Keep reviewing your portfolio every year. Make adjustments based on market conditions and your financial goals.

Estate Planning

It’s never too early to think about estate planning, especially when you have dependents.

Creating a will: Draft a simple will that outlines how your assets should be distributed. This ensures that your family will not face legal complications in the future.

Nomination in investments: Ensure that you’ve updated the nomination details in all your investments, including mutual funds, PPF, and bank accounts.

Financial Discipline and Monitoring

Consistency is key to building wealth over time. Here are a few tips to ensure you stay on track:

Automate investments: Set up automatic transfers for your SIPs and PPF contributions. This helps you remain disciplined and ensures timely investments.

Track your progress: Use a financial app or maintain an excel sheet to track your investments. This will help you understand how your portfolio is growing.

Consult a Certified Financial Planner: Since financial planning can be overwhelming, working with a CFP will give you better direction. They can regularly review your portfolio, suggest improvements, and help you achieve your financial goals.

Finally

You are already on the right path with insurance and initial investments. Now, by increasing your SIPs, managing your loan, and planning for your daughter’s future, you can build a secure financial future.

Be patient and stay committed. Your efforts will yield good results over time, ensuring both you and your family are well taken care of.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,
www.holisticinvestment.in
Instagram: https://www.instagram.com/holistic_investment_planners/

..Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 27, 2025

Asked by Anonymous - Jan 24, 2025Hindi
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Hello, Investment and savings guidance needed for a 24 year old, I'm earning around 10LPA and have an education loan of 6 Lakhs pending. I have no savings currently but I have invested some money in gold, medical and term insurance. Kindly guide me.
Ans: Starting early in financial planning gives an advantage. Your earnings are Rs. 10 LPA. You have an education loan of Rs. 6 lakhs. You have no savings but have invested in gold and insurance. Let’s build a strong financial plan for you.

Step 1: Clear High-Interest Loans First
Education loans usually have lower interest rates.

But repaying early can save interest costs.

Allocate extra savings towards loan repayment.

Avoid unnecessary personal or credit card loans.

Step 2: Build an Emergency Fund
Save at least 6 months of expenses in a liquid fund.

This ensures financial security in job loss or emergencies.

Keep funds in a high-liquidity, low-risk option.

Step 3: Continue Your Insurance Cover
Medical insurance protects against unexpected medical costs.

Term insurance is important if you have dependents.

If no dependents, term insurance is not a priority yet.

Review your insurance coverage annually.

Step 4: Start Saving and Investing
Begin a disciplined savings habit immediately.

Use SIP in actively managed mutual funds.

Choose a mix of large-cap, flexi-cap, and mid-cap funds.

Avoid direct mutual funds, as professional guidance helps in fund selection.

Step 5: Plan for Short-Term Goals
Identify goals for the next 3-5 years.

Short-term goals require safer investment options.

Avoid midcap funds for short-term needs.

Step 6: Plan for Long-Term Wealth Creation
Retirement may seem far, but starting now gives great benefits.

SIPs in equity funds provide long-term wealth growth.

Increase SIPs whenever your income increases.

Diversify across fund categories for risk management.

Step 7: Avoid Unnecessary Investments
Avoid ULIPs and endowment plans for wealth creation.

Gold is not a great investment for long-term growth.

Investing in real estate requires large capital, avoid at this stage.

Step 8: Tax Planning for Maximum Savings
Maximise Section 80C investments like EPF, PPF, and ELSS.

Use NPS for additional tax benefits.

Consider tax-efficient investments based on income growth.

Step 9: Review and Adjust Your Portfolio
Track your expenses and investments regularly.

Increase savings and investments as salary grows.

Avoid unnecessary loans and liabilities.

Reassess financial goals annually.

Final Insights
Repay your education loan early to reduce financial burden.

Build an emergency fund for financial security.

Start SIPs in mutual funds for long-term growth.

Avoid insurance-based investments and real estate for now.

Review your financial plan regularly and adjust accordingly.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

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

Asked by Anonymous - May 10, 2025
Money
Hi Sir, I am 42 years old private employee and around 1lakh salary per month. I have 2 kids of 7yrs and 4yrs each. I have savings like in NPS as 11lakhs, PPF as 8lakhs, Sukanya as 2lakhs, 1 term policy and lic policy. Medical insurance is from company and no person health insurance. And I have 72k in MFs till now. I have started it and regretting as I ignore MFs as I don't have much financial knowledge on this. So requesting you to please give a suggestion for my family future needs like education, marriage etc. and importantly pension fund after retirement. Hope you will reply and help me.
Ans: You're doing well so far. You have started important savings and protection steps. You are rightly thinking about your children and retirement. Let’s now look at your full financial picture step by step. This is to guide you in building a solid future for your family.

Current Financial Overview – Evaluation
Your monthly income is Rs.1 lakh. This gives you decent capacity to plan.

You are 42 now. That gives you around 15 to 18 years for retirement.

You have Rs.11 lakhs in NPS. This is a good start.

PPF of Rs.8 lakhs is useful for long-term needs. Well done.

Sukanya Samriddhi Yojana of Rs.2 lakhs is good for daughters. Keep it up.

You have term insurance. This is a very important safety net.

You have company medical insurance. But you must take personal health cover too.

Rs.72,000 in mutual funds is a good beginning. You should continue.

You have a LIC policy. This is a mix product. We need to check its usefulness.

Children’s Future – Education and Marriage Planning
Your kids are 7 and 4 years old. Their higher education starts in 10-14 years.

For education and marriage, equity mutual funds are best suited.

They can give better growth than PPF, Sukanya, or fixed options.

Continue Sukanya Samriddhi. It is safe and tax-free.

But add mutual funds as major part for education goals.

Use regular plans through MFDs with CFP support. This gives proper guidance.

Avoid direct plans. They miss out expert monitoring and adjustment support.

Direct plans seem cheaper. But lack handholding and ongoing advice.

Choose child-focused mutual fund portfolios with 10+ years view.

Invest monthly through SIPs. This builds wealth slowly and safely.

Target two separate funds: one for elder, one for younger child.

Review goals every year with your CFP and adjust SIPs.

Your Retirement – Pension Planning Steps
NPS of Rs.11 lakhs is a decent beginning. You should continue it.

But don’t depend only on NPS for full retirement.

Add mutual funds as second pillar for retirement.

Invest in balanced and multi-cap equity mutual funds via regular plans.

Regular plans through CFP and MFDs will give review and corrections.

Avoid direct funds. You may miss right fund changes and rebalancing.

Equity funds can help you beat inflation over next 15-20 years.

Don’t invest in annuity plans. They give low income and low flexibility.

Increase your SIP amount every year by 10%-15%.

Consider retirement planning as your most important goal.

Estimate a comfortable monthly need after retirement.

Plan now to reach that amount by 60.

Maintain separate SIPs for children’s education and for your retirement.

Life Insurance – Policy Review and Action
You already have a term insurance. This is perfect. Continue it.

If your term insurance is below Rs.1 crore, increase it now.

Avoid traditional LIC endowment or ULIP policies.

These mix insurance with investment. Gives poor return.

If your LIC is traditional or ULIP, plan to surrender it.

Take surrender value. Invest that amount in mutual funds.

Pure term plans protect your family better than endowment plans.

No need to mix insurance and savings.

Health Insurance – Important Next Step
Company insurance is not enough. Buy personal family health insurance.

After leaving job, company cover may stop. Risk is high without personal cover.

Take a Rs.10 lakh floater plan now for your family.

Add super top-up of Rs.15-20 lakhs later. Premium is low.

This gives peace of mind against big medical bills.

If you delay this, you may get exclusions or waiting period.

Emergency Fund – Safety Cushion Plan
Keep at least 6 months of expenses in savings or liquid mutual fund.

This is your safety net during job loss or medical need.

Use sweep-in FD or liquid funds for better returns.

Don’t touch emergency fund for any investment.

Keep it ready and separate from regular savings.

Mutual Funds – Growth Engine for Long Term Goals
You have Rs.72,000 in mutual funds now. Good first step.

Continue investing monthly through SIPs. Choose regular plans.

Use the help of MFDs and CFPs for fund selection and review.

Avoid index funds. They don’t beat market. No fund manager support.

Actively managed funds perform better with expert fund management.

Also avoid direct funds. You need handholding and goal tracking.

Regular funds cost little more. But give huge benefit of expert advice.

Equity mutual funds should be used for all long-term goals.

For short-term needs, use short duration or hybrid funds.

Review your portfolio yearly. Adjust based on life changes.

PPF, Sukanya and NPS – How to Use Them Properly
PPF is safe and tax-free. Continue till maturity.

Use it as part of your retirement strategy.

Sukanya is good for your daughters. Continue till they reach 21 years.

NPS is useful for building retirement money. Continue your contributions.

But NPS has lock-in. So don’t make it your only retirement tool.

Mix it with equity mutual funds to create balance.

Review asset allocation with a certified planner every year.

Tax Planning – Smart Use of Instruments
Use Section 80C fully with PPF, Sukanya, Term Insurance, ELSS.

ELSS mutual funds give tax benefit and growth potential.

Don’t put too much in low-yield tax-saving policies.

Use HRA and NPS also for tax savings if available.

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

STCG is taxed at 20%. So, hold equity funds for more than 1 year.

Debt mutual fund gains are taxed as per income slab. Plan accordingly.

Action Plan – What You Can Do Next
List your goals: retirement, kids’ education, their marriage.

Estimate time left for each goal.

Assign investments to each goal. PPF, NPS, Sukanya for retirement and kids.

Start or increase SIPs in regular equity mutual funds.

Take personal health insurance without delay.

Check and surrender LIC if it is traditional or ULIP.

Build an emergency fund equal to 6 months of salary.

Increase your term insurance if less than Rs.1 crore.

Review all investments yearly with a certified financial planner.

Finally – Insights to Keep in Mind
You are doing many right things. Just needs better alignment.

Don’t feel regret about delay. You are now taking steps forward.

Invest in mutual funds regularly with expert guidance.

Avoid direct and index funds. Go with regular plans via CFPs.

Plan each goal separately. Don’t mix children and retirement funds.

Protect your family with term insurance and health cover.

Stay consistent with SIPs. Wealth builds over time.

Review once a year. Track goals and adjust your plan.

Always take advice from certified financial planners.

Best Regards,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

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

Money
I am 31 years, unmarried bachelor and lead celibacy. I have investment in equity mutual fund growth option cost of which is 20 lacs now valued at 45 lacs. I don't require this for next 30 years and reserve it for my retirement. Do I need to save now for retirement, or can I spend 99% of my current earning as I have a retirement corpus of Rs.45 lacs at current value. I have life cover of 1.5 cr and for health Rs.40 lacs and comfortably earning from MNC for my survival, healthy with no bad habits and lead a disciplined and minimalist life style. Please guide me do I need more retirement corpus, or the accumulated Corpus is enough for retirement. If so how much more corpus do i need?
Ans: You have shown excellent discipline. At age 31, you already have Rs.45 lacs in equity mutual funds. That’s a rare position to be in.

You lead a minimalist life. You are healthy. You don’t have dependents. You are earning well. You are living with purpose and clarity.

Still, retirement planning is not only about a lump sum today. It also needs a 360-degree analysis.

Let us now evaluate in detail if this Rs.45 lacs is enough for your retirement.

We will assess from lifestyle, inflation, investment risk, tax rules, personal values, and health perspective.

We will also answer your main question: Can you spend 99% of your earnings now?

Retirement Planning Is Not Only About Current Corpus
Rs.45 lacs looks large now. But you are 31. Retirement is 29 years away.

A rupee today won’t have the same value 30 years later.

With inflation, prices can rise 5x or even more by then.

Your current Rs.45 lacs may not buy much in 2054.

So it is not enough to just grow. It must grow faster than inflation.

What If You Don’t Add Any More Investment?
If you don’t invest any more for retirement now, your Rs.45 lacs must grow for 30 years.

Let us assess few key points:

If the investment is fully in equity, volatility is high.

Long-term returns can be rewarding, but not always predictable.

Also, equity mutual funds attract capital gains tax.

New rule: LTCG above Rs.1.25 lakh taxed at 12.5%.

This will reduce the final retirement corpus.

So you cannot assume all returns will be tax-free.

Impact of Inflation on Lifestyle
You are minimalist today. But that may not be the case at 60.

Even basic costs like food, rent, medicine, utilities will go up.

At 6% inflation, Rs.25,000 monthly expenses today may become Rs.1.5 lacs after 30 years.

Medical inflation is higher. You may need Rs.5 lacs per year for healthcare alone at retirement.

So the same Rs.45 lacs will lose value every year.

What If You Live Longer?
Longevity is increasing in India. You may live till 90 or 95.

That means 30 years working and 30+ years retired.

So retirement may last longer than your working life.

Your money has to work for you after 60.

Even a Rs.3 crore corpus at retirement may fall short if not planned properly.

Health Cover and Life Cover Are Good
Rs.1.5 crore term insurance is good.

Rs.40 lacs health cover is excellent. Keep renewing it.

But insurance is not a substitute for retirement planning.

Also, insurance does not build wealth.

You Have Time on Your Side
You are 31. That gives you 30 years to grow your corpus.

That is your biggest strength.

Small, consistent investing now can multiply your corpus over 30 years.

Even Rs.10,000 per month extra can change your future.

Can You Spend 99% of Earnings?
It is not wise to spend 99% of earnings even with Rs.45 lacs corpus.

It makes your life dependent on just one investment.

Also, it leaves no buffer for job loss, health crisis, or early retirement.

Spending most of your income will reduce your financial freedom later.

Risks of Not Saving Enough
Future jobs may not pay this well.

You may face burnout or wish to retire early.

Markets may not perform as expected.

Emergencies may force early withdrawal.

Expenses can rise unexpectedly.

What Should Be the Ideal Retirement Corpus?
There is no fixed number. It depends on your lifestyle.

Still, we can estimate based on some broad assumptions:

A basic retirement needs at least Rs.4 to 5 crores at age 60.

A comfortable life with travel, hobbies, and good healthcare needs Rs.6 to 8 crores.

A rich life with freedom and legacy needs Rs.10 crores or more.

You may not need all of it. But you must aim higher and stay flexible.

How Much More Corpus You Need?
You already have Rs.45 lacs.

Assuming 10% annual return, and no withdrawal for 30 years:

Your current Rs.45 lacs can become Rs.8 crores in 30 years.

But tax and inflation will reduce its value.

After adjusting, this may be worth only Rs.3 to 4 crores in real terms.

So yes, you are on the right path. But you are not done yet.

Should You Stop Saving Now?
No. Stopping now is not safe.

You should continue to invest at least 20% to 30% of income.

You don’t need to be aggressive.

But you must not stop completely.

Advantages of Continuing SIPs in Actively Managed Mutual Funds
Actively managed funds are more responsive to market changes.

They are driven by research and fund manager insights.

They can beat inflation better than passive options.

They help create real wealth over time.

You can invest through mutual fund distributor with CFP. That gives expert help.

Disadvantages of Direct Mutual Fund Investing
Direct funds seem cheaper. But they miss the human touch.

No professional reviews. No behavioural guidance.

You may exit in panic or enter at wrong time.

Mistakes in direct investing are costly.

Regular funds via a Certified Financial Planner offer support, reviews, and strategy.

Financial Planning Is Not Just About Corpus
Financial planning is lifelong.

You need a written retirement plan.

Include health, taxes, estate, and liquidity in that plan.

Set goals every 5 years and review progress.

Don’t think of corpus only. Think of financial independence.

Your Current Strengths
Strong investment of Rs.45 lacs

No dependents or liabilities

High income and low expenses

Health insurance and term cover

Discipline and minimalism

What You Can Do Now
Continue SIPs in actively managed funds via expert help

Review portfolio yearly with a Certified Financial Planner

Create a written retirement plan

Don’t touch your Rs.45 lacs till 60

Save 30% of income. Enjoy 70%.

Finally
You are doing well. You already have Rs.45 lacs at age 31. That shows foresight.

But retirement is not a fixed-point goal. It is a moving target with inflation and uncertainty.

You must not stop saving. Keep adding regularly. Small steps now can lead to a rich future.

Aim to build a Rs.6 to 8 crore corpus. That gives you safety, comfort, and peace.

Spending 99% now is risky. Don’t do that. Instead, reward yourself within limits. But keep investing for freedom.

Discipline today gives freedom tomorrow.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

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

Asked by Anonymous - May 09, 2025
Money
Sir, we had a dispute in our ancestral property we approached the court and the verdict said we are entitled to a portion of the property The dispute was the land was sold without our knowledge etc., after getting the verdict we got patta, registration in our name. Now we are planning to sell the land, a lawyer said get a ratification deed, I don't know what it is and also weather it is needed or not. The lawyer called us and said the the other party who has purchased the land illegally is not agreeing to sign and is asking money to settle the matter as he has purchased the land. Even after receiving court orders this kind of dodging is happening. The amount of money he is asking is senseless, even if I sell the land I wouldn't get that much amount, I am unable to put in writing many other problems kindly advise what next steps to take. also let me know what are all the documents to have as a owner. Thank you
Ans: You have taken rightful steps. Court verdict is in your favour. That shows your legal ground is strong.

But still, the other party is asking for money. That too, an unfair amount. You also mentioned a lawyer suggested getting a ratification deed. Let us try to understand the full situation and assess all possible options. We will also cover what documents are needed to prove your ownership.

This reply gives you a 360-degree view. It will help you make a sound and confident decision.

Understanding Your Current Legal Standing
You said the land was sold without your knowledge. That makes the original sale illegal. The court has agreed with you. That is a key win for you.

You now have patta and registration in your name. These are strong documents. They show you have legal title.

Based on this, you are now the legal owner. That means you have the full right to sell the land. But the buyer must also be confident. So legal clarity is very important.

What Is a Ratification Deed?
A ratification deed is a It confirms a past act done without proper authority. The current party gives approval to that act.

In your case, it seems the buyer who bought the land earlier is being asked to “ratify” that sale. That is, to agree that you are the rightful owner now.

This is not a mandatory document by law. But it is sometimes used to make the title stronger. Some buyers or their banks ask for it.

However, since the court has already ruled in your favour, you may not legally need it. You already have the stronger claim.

Why Is the Buyer Still Causing Issues?
The person who bought the land earlier might feel he lost money. He may think the sale to him was legal. But since the court disagreed, he now holds no right.

His demand for money is unjust. It is a pressure tactic. He is trying to recover his loss by troubling you.

You are not legally required to pay him. He has no power to stop your sale.

Assessing Options Now
You can now evaluate your next steps from three angles – legal, practical, and financial.

Legal Options
Talk to your lawyer again. Ask: is a ratification deed mandatory in your case?

Get a written legal opinion. This should clearly mention your rights and position.

File a complaint if the other party is threatening you or asking money.

Send a legal notice through your lawyer to that person. Mention that he has no right now.

Practical Options
Try selling to a buyer who trusts the court order. Show them all documents.

Explain clearly that title is clean. Show the judgment, patta, and registration.

Use a reputed real estate lawyer for the sale. That gives buyers more confidence.

Financial Assessment
Do not agree to pay huge amounts. It may cause loss for you.

If needed, consider a small settlement. But only after full legal review. And only if it makes the sale smooth and quick.

Ask yourself: Even if I settle, will the person agree to give in writing? If not, don’t pay.

Must-Have Documents to Sell the Land
As a rightful owner, you must hold the following papers:

Patta in your name (this is land ownership proof)

Registered sale deed or title deed (issued after the court judgment)

Copy of the court verdict

Encumbrance Certificate (EC) (shows your name as the current legal holder)

Legal heir certificate, if you inherited the land

Property tax receipts in your name

Aadhar and PAN card copies

Suggested Steps to Make Sale Smooth
Get a detailed Title Certificate from a lawyer. It should mention the court case and outcome.

Keep a summary note ready. It should explain how you became owner.

Ensure name match across all your documents.

Keep a certified copy of court order with you at all times.

Use a reputed property consultant or broker only if needed. Prefer buyers who are local and familiar with such cases.

Emotional and Mental Pressure
You also mentioned you are facing many other issues. That is understandable. Land disputes take a heavy toll on health and peace of mind.

Please do not worry. You already have legal strength.

You have cleared a big milestone by getting the court’s support.

Don’t allow fear or threats to stop you.

Stay strong. Keep family informed. Talk regularly with your lawyer.

How Certified Financial Planner Can Help
A Certified Financial Planner (CFP) can guide you better with your sale proceeds.

If you plan to sell, prepare a written cash flow plan.

Think about your family’s short-term and long-term needs.

Keep emergency funds aside. Don’t invest all money at once.

Mutual funds managed by professional advisors can be considered. They offer long-term wealth building.

What Not To Do
Do not deal in cash. Always use cheque or bank transfer.

Do not sign any paper without lawyer check.

Do not get emotionally disturbed by their false threats.

Do not delay your next steps due to confusion or fear.

Finally
You have shown good courage. You followed the legal process. You now own the land as per law.

The other party is only trying to misuse your fear. Do not fall for it.

If the buyer still refuses to cooperate, avoid them. Choose another buyer.

If a ratification deed is insisted by your new buyer, ask your lawyer: Is it really needed?

If not needed, move ahead without it.

If needed, try again to convince the other person. If they demand unreasonable money, don’t agree.

Let your lawyer send notice. You can also explore police help if needed.

Always work with proper documents. Keep everything in writing.

Keep calm and move forward. With legal support and proper documents, you will win.

If you need help with managing the money after sale, we can help with a long-term financial plan.

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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