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Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

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

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - May 10, 2024Hindi
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Hello sir, I am 33 years old working as a software professional. I have a mothly SIPs that I started earlier this year of 30000 rupees which was divided into 10000 rs for ICICI Prudential bluechip fund direct growth large cap, 10000 rs for motilal oswal midcap and 5000 rs each in Quant small cap and Aditya birla sunlife PSU fund. Along with this I have couple of life insurance policies with LIC on my name and one each for my wife and kid altogether I'm paying premium of 3 lakhs per annum. I also invested in real estate and bought a land worth 40 lakhs. I'm planning for my retirement at the age of 45 and want to know best ways for investment to build my corpus and earn 2 lakhs per month from it post retirement which suffices my needs adjusting to inflation.

Ans: Your commitment to securing your financial future is commendable, and your portfolio reflects a mix of investments. Let's analyze your current strategy and chart a path towards your retirement goal.

Starting with your SIPs, allocating funds across different categories like large-cap, mid-cap, and small-cap indicates a balanced approach to risk and growth. However, it's essential to review your portfolio periodically to ensure it aligns with your changing goals and market conditions.

There are some advantages to consider direct funds, and the cost savings can be significant in the long run. However, there are some potential benefits to using a regular MFD:

Advantages of Investing Through a Mutual Fund Distributor (MFD):

• Personalized Advice: MFDs can be helpful for beginners or those who lack investment knowledge. They can assess your risk tolerance, financial goals, and investment horizon to recommend suitable mutual funds. This personalized guidance can be valuable, especially if you're new to investing.
• Convenience: MFDs handle all the paperwork and transactions on your behalf, saving you time and effort. They can help with account setup, SIP registrations, and managing your portfolio across different funds.
• Investor Support: MFDs can be a point of contact for any questions or concerns you may have about your investments. They can provide ongoing support and guidance throughout your investment journey.


Your life insurance policies provide financial protection for your family, which is crucial. However, it's advisable to evaluate if the coverage meets your evolving needs and if there are more cost-effective options available.

Investing in real estate can be lucrative, but it comes with its own set of challenges like liquidity issues and market volatility. Considering your retirement goal, diversifying your investments beyond real estate might be prudent.

To achieve your retirement target of ?2 lakhs per month adjusted for inflation, you'll need a substantial corpus. Considering your age and retirement timeline, investing in a mix of equity, debt, and other asset classes is essential.

Since you're aiming for early retirement, focusing on growth-oriented investments with higher returns potential could be beneficial. Regular reviews with a Certified Financial Planner can help fine-tune your strategy and maximize returns while managing risks.

Additionally, exploring tax-efficient investment avenues like Equity Linked Savings Schemes (ELSS) and PPF can optimize your tax outgo and enhance your corpus over time.

Remember, building a retirement corpus requires discipline, patience, and a well-thought-out strategy. Stay committed to your savings plan and adapt to changes in your financial landscape.

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  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 17, 2024

Asked by Anonymous - Jun 23, 2024Hindi
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I am 23 yrs old unmarried person seeking to enhance my corpus in crores. Currently having an SIP of 12k a month in small cap and one in mid cap, investing from last 6 months. I need a to make my corpus of 25 Cr. at the age of retirement but before that I want to invest my money in such manner that it could easily generate a handsome amount of money to pay my bills, monthly expenses. My current expenses are not more than 8k and I am earning 30k a month. Apart from my sip I have a invested in SGB 5 units and a small FD of 50k What are best other investments I could do, so that it sets me free to enjoy my life at a very young age?
Ans: Current Financial Position
You are 23 years old, earning Rs. 30,000 monthly. Your expenses are Rs. 8,000 per month. You have an SIP of Rs. 12,000 in small-cap and mid-cap funds, 5 units in Sovereign Gold Bonds (SGB), and an FD of Rs. 50,000. You aim to build a corpus of Rs. 25 crores by retirement and want to generate a steady income to cover your expenses before that.

Investment Strategy for Long-Term Growth
SIP in Diversified Funds

Your SIP in small-cap and mid-cap funds is a good start. Continue these investments, but also consider adding large-cap and multi-cap funds. This diversification reduces risk and ensures steady growth.

Increase SIP Contributions

Try to increase your SIP contributions as your income grows. Regularly increasing your SIP amount can significantly enhance your corpus over time.

Equity Investments

Equity investments generally offer higher returns over the long term. Apart from SIPs, consider investing in individual stocks of well-established companies. This requires careful research or the guidance of a Certified Financial Planner (CFP).

Public Provident Fund (PPF)

Invest in PPF for a secure and tax-efficient option. PPF offers good returns and is a safe investment. Aim to contribute the maximum limit annually to benefit from compounding over the years.

Diversify with Gold

Your investment in SGB is good. Gold is a hedge against inflation and adds diversification to your portfolio. Continue investing in SGB periodically.

Investment Strategy for Regular Income
Dividend-Paying Stocks

Invest in dividend-paying stocks. They provide regular income and can be a good source of cash flow. Choose stocks from companies with a strong track record of paying dividends.

Monthly Income Plans (MIPs)

Consider investing in Monthly Income Plans. These mutual funds focus on generating regular income with a mix of debt and equity investments. They offer better returns than fixed deposits and provide regular payouts.

Rental Income from Real Estate

Since real estate isn't recommended, consider investing in Real Estate Investment Trusts (REITs) instead. REITs offer exposure to real estate markets and generate rental income without the hassle of property management.

Financial Discipline and Emergency Fund
Maintain an Emergency Fund

Build an emergency fund covering at least 6-12 months of living expenses. This fund ensures financial stability in case of unexpected events and prevents you from dipping into your investments.

Automate Savings

Automate your savings and investments. Set up automatic transfers to your SIPs, PPF, and other investment accounts. This ensures consistent saving and investing habits.

Track and Review Investments

Regularly track and review your investments. Adjust your portfolio based on market conditions and changes in your financial goals. Consulting a CFP can help you make informed decisions.

Final Insights
You have a strong financial foundation and clear goals. Diversify your investments across different asset classes for balanced growth and regular income. Increase your SIP contributions and maintain financial discipline. Regular reviews and adjustments will keep you on track to achieve your long-term goal of building a Rs. 25 crore corpus and enjoying financial freedom.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Milind

Milind Vadjikar  |977 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 17, 2024

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Dear Sir, I am 53 yrs. I want to retire @60 with a INR 2.00 Cr Corps. Currently I have following SIP Total SIP 30000/- PM Axis Bluechip Fund - Regular Plan - Growth HDFC Mid-Cap Opportunities Fund - Growth Plan Aditya Birla Sun Life Pure Value Fund - Growth Option Aditya Birla Sun Life Equity Advantage Fund - Regular Growth Sundaram Mid Cap Fund Regular Plan - Growth Bajaj Finserv Flexi Cap Fund -Regular Plan-Growth Franklin India Focused Equity Fund - Growth Plan Franklin India Smaller Companies Fund-Growth HDFC Top 100 Fund - Growth Option HDFC Multi Cap Fund - Growth Option I have MF Investment @ 26.00 Lakh Current Value is @ 52.00 Lakh. I have Savings of Rs. 10.00 Lakh, PPF Rs. 5.00 Lakh, Share investment Current Market Value around Rs. 20.00 Lakhs. I don't have any Loan. Insurance INR 1.50 Cr. up age of 70. Per month earning around Rs. 1.25 Lakh. I have a Investment in real estate which can give my INR 40.00 Lakh at current Market Price & Gold Investment of INR 20.00 Lakh which I think sufficient for my daughter Marriage. Current Monthly Expense INR 40-50 K. I am in a new tax regime, so discontinue my ELSS saving and PPF Saving. Suggest how i can increase my Corpus for retirement.
Ans: Hello;

You may top-up your monthly sip by 10% every year for 7 years. This will grow into a sum of around 0.51 Cr.

The MF corpus and direct equity holdings worth 0.72 Cr today will grow into a corpus of 1.59 Cr after 7 years.

Therefore you may achieve your intended corpus of 1.59+ 0.51=2.1 Cr, 7 years from now. A modest return of 12% is assumed from MF and direct equity holdings.

2-3 years before 60 you should start moving your gains from equity funds to liquid or ultra short duration debt funds to protect it against market volatility.

Also good health care insurance for yourself and your spouse.

RE property you may sell at a later date to boost your retirement income.

Happy Investing;
X: @mars_invest

..Read more

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Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 05, 2025

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Hello Sir, this is Dhiraj DM, I am 48 year's old married with no kids, we have any flat worth 1. 5 cr given on rent around 50 lakhs of equity 20 lacs mutual funds we want to retire in next 3 years,please guide. We live in a metro no liability, we r into Gifting business now want to retire in next 3 years
Ans: Your retirement is just three years away. You have built a strong foundation with real estate, equity, and mutual funds. Now, the goal is to structure your investments for steady income, security, and long-term sustainability.

1. Assessing Your Current Financial Position
Flat Worth Rs. 1.5 Crore: This generates rental income, but liquidity is limited.
Equity Portfolio of Rs. 50 Lakh: Market-linked investments with potential for high returns but volatile.
Mutual Funds of Rs. 20 Lakh: Offers diversification and moderate risk exposure.
No Liabilities: This is a strong advantage for financial freedom.
Gifting Business: If planning to exit, ensure business-related finances are sorted before retirement.
2. Estimating Post-Retirement Income Needs
Calculate expected monthly expenses, including medical, travel, lifestyle, and emergency costs.
Factor in inflation, as expenses will rise over time.
Consider long-term costs such as medical care and home maintenance.
3. Structuring Retirement Income
Rental Income as a Fixed Source
Your flat generates rental income, which helps with stability.
Consider reinvesting this income for further growth.
Portfolio Rebalancing for Stability
Equity exposure is beneficial but risky close to retirement.
Shift some funds to low-risk instruments for safety.
Keep some allocation to equity to combat inflation.
Maintaining Liquidity for Emergencies
Create an emergency fund of at least 2 years' expenses in liquid assets.
Avoid relying solely on investments that require selling in volatile markets.
4. Health and Insurance Planning
Ensure comprehensive health insurance for both of you, at least Rs. 15-20 lakh coverage.
If you hold any old insurance policies with low returns, consider restructuring them.
Create a separate healthcare fund for long-term medical expenses.
5. Tax Efficiency in Retirement
Structure withdrawals smartly to reduce tax burden on capital gains.
Use tax-free instruments where applicable.
Rental income is taxable, so deduct maintenance expenses to lower tax outgo.
6. Planning Investments for Retirement Income
Avoid complete reliance on fixed-income instruments, as they may not beat inflation.
A mix of mutual funds, debt instruments, and systematic withdrawal plans (SWP) will ensure steady cash flow.
Keep some investments growth-oriented to sustain wealth over decades.
7. Estate and Legacy Planning
Prepare a clear will to ensure smooth asset transfer.
If you plan to donate or support causes, structure funds accordingly.
Finally
Ensure liquidity and stability in your investments.
Reduce risk in equity but keep exposure for growth.
Maintain a dedicated healthcare fund and strong insurance coverage.
Structure investments to minimise taxes and ensure steady income.
Plan legacy and succession to avoid future complications.
Would you like a detailed plan on how to allocate your investments for steady retirement income?

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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