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Ramalingam

Ramalingam Kalirajan  |5092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 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
Anuj Question by Anuj on May 09, 2024Hindi
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Hello sir , I am 32 year old I am a salaried person around 60k per month and want to start SIP for my children education I have two children one is 6 year old and another one is 3 year old. Please suggest me the best

Ans: It's fantastic that you're thinking ahead and planning for your children's education at such a young age. Starting SIPs (Systematic Investment Plans) is a smart way to build a corpus for their future educational expenses.
Considering your financial situation and your children's ages, here's a suggested approach:
1. Set Clear Goals: Determine the amount you'll need for each child's education, factoring in inflation and the type of education you aspire for them. This will help you set realistic investment targets.
2. Choose Suitable SIPs: Opt for diversified equity mutual funds that have a track record of consistent performance and align with your investment goals and risk tolerance. Look for funds with a long-term horizon and a focus on capital appreciation.
3. Allocate Funds Wisely: Divide your SIP investments among different funds to spread risk and maximize growth potential. Consider a mix of large-cap, mid-cap, and multi-cap funds to achieve diversification and optimize returns.
4. Start Early and Stay Consistent: Time is your biggest ally when it comes to investing. Start your SIPs as soon as possible to benefit from the power of compounding. Even small, regular investments can grow substantially over time with discipline and consistency.
5. Review and Adjust Regularly: Periodically review your SIP investments to ensure they're on track to meet your goals. Make adjustments as needed based on changes in your financial situation, market conditions, and investment objectives.
6. Stay Disciplined: Avoid the temptation to withdraw or stop your SIPs during market fluctuations. Stay focused on your long-term goals and continue investing consistently, regardless of short-term market movements.
7. Consider Tax Implications: Keep tax efficiency in mind while selecting SIPs. Opt for funds with favorable tax treatment like Equity Linked Savings Schemes (ELSS) for potential tax benefits under Section 80C of the Income Tax Act.
Remember, education is one of the most valuable investments you can make for your children's future. By starting SIPs early and staying disciplined, you can build a solid financial foundation to provide them with the best opportunities for education.

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  |5092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 01, 2024

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I am 44 yrs old. Having 2 children 14 and 11yrs old. Pls advice a better SIP plan for their higher education.
Ans: Here's some guidance to choose a better SIP plan for your children's higher education (remember, I dont want to recommend specific schemes online ):

Investment Horizon:

Consider the time frame until your children's higher education (roughly 10-15 years for each).
Risk Tolerance:

Aggressive investments have higher growth potential but also more fluctuations. A moderate approach might be suitable given the long timeframe.
Investment Options:

Equity SIPs: Invest in diversified equity mutual funds (across large, mid, and small-cap) for potentially higher returns over the long term. However, be prepared for market ups and downs.
Balanced SIPs: These invest in a mix of equity and debt, offering a balance between growth potential and stability.
SIP Strategy:

Start Early, Invest Regularly: Even a moderate SIP amount started early can benefit from compounding over a long period.
Staggered SIPs: Consider investing a portion of the SIP amount in each child's name to potentially benefit from market fluctuations.
Additional Considerations:

Child Education Goal Planning: Estimate the potential cost of higher education (including inflation) to determine the total investment corpus needed.
Review and Rebalance: Periodically review your SIPs and rebalance the portfolio if needed to maintain your risk tolerance.
Tax Planning: Explore tax-saving options like ELSS (Equity Linked Savings Scheme) funds that offer tax benefits.
Consulting a Certified Financial Planner (CFP):

A CFP can create a personalized investment plan for your children's education needs. They can consider factors like your risk tolerance, investment horizon, and future education costs to recommend suitable SIP plans and asset allocation.

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

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