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Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 06, 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 - Jun 24, 2024Hindi
Money

Hello sir, I am 34 years of age married with 3 year old kid with 60L in FD, 40L in mutual, 6L in SGB, 8L in NPS, 20L in EPF, 12L in PPF.. investing around 1.5L per month across everything except FD. I do not have an own home yet and there are no loans taken for any purpose... how should I go about rebalancing if at all is required and when can I consider myself safe enough to retire given that my current expenses are around 60k per month..

Ans: You’ve done a fantastic job managing your finances so far. At 34, you’re in a solid position to achieve your financial goals, including a secure and comfortable retirement. Let's dive deeper into how you can rebalance your portfolio, retain a significant portion in equity, and build a robust retirement corpus.

Current Financial Snapshot
You have:

Rs. 60L in FD
Rs. 40L in mutual funds
Rs. 6L in Sovereign Gold Bonds (SGB)
Rs. 8L in NPS
Rs. 20L in EPF
Rs. 12L in PPF
You're investing Rs. 1.5L monthly across various instruments. Your monthly expenses are Rs. 60k.

Building a Strong Financial Foundation
Emergency Fund: Ensure you have an emergency fund covering at least 6-12 months of expenses, amounting to Rs. 3.6L to Rs. 7.2L. This fund should be easily accessible, so consider keeping it in a savings account or a liquid fund.

Health and Life Insurance: Adequate health insurance is essential to protect against medical emergencies. Term insurance ensures your family is financially secure in case of an unforeseen event.

Rebalancing Your Portfolio
Rebalancing ensures your investments align with your risk tolerance and goals. Given your age, retaining 70% in equity is a wise strategy. Here’s a detailed analysis:

Fixed Deposits (FDs): FDs are safe but offer low returns. Consider reducing your FD holdings. Reinvest a portion into higher-yielding assets like equity mutual funds.

Mutual Funds:

Equity Mutual Funds: These should form a significant part of your portfolio, about 70%. They offer higher returns over the long term, crucial for wealth creation.
Debt Mutual Funds: Allocate about 30% to debt mutual funds. They provide stability and lower risk, important as you near retirement.
Sovereign Gold Bonds (SGBs): SGBs are a good hedge against inflation and economic uncertainty. Maintain your current holdings as they provide balance to your portfolio.

National Pension System (NPS): Continue contributing to NPS. It offers tax benefits and helps build a retirement corpus. As you get closer to retirement, you can shift more towards safer investments within NPS.

Employees’ Provident Fund (EPF): EPF is a stable and tax-efficient retirement savings option. Continue your contributions, as it provides a steady return with tax benefits.

Public Provident Fund (PPF): PPF is another safe and tax-efficient option. Your current balance and ongoing contributions will grow significantly over time due to the power of compounding.

Systematic Investment Plan (SIP)
SIP Benefits: Investing through SIPs helps in disciplined investing and rupee cost averaging, reducing the impact of market volatility.

Increasing SIPs: As your income grows, consider increasing your SIP contributions. This will accelerate the growth of your retirement corpus.

Asset Allocation and Diversification
Balanced Portfolio: A mix of equity, debt, gold, and other instruments is ideal. A well-diversified portfolio reduces risk and ensures steady returns.

Regular Rebalancing: Periodically review and rebalance your portfolio. Adjust your investments to maintain your desired asset allocation and stay aligned with your financial goals.

Direct vs. Regular Funds
Direct Funds: They have lower expense ratios but require active management and financial knowledge.

Regular Funds: Investing through regular funds with a Mutual Fund Distributor (MFD) and Certified Financial Planner (CFP) provides professional guidance, leading to better outcomes for many investors.

Avoiding Index Funds
Index Funds: While they offer lower expenses, index funds merely replicate the market index. Actively managed funds aim to outperform the index, potentially offering higher returns.

Retirement Planning
Estimating Retirement Corpus: Determine how much you’ll need for retirement. Consider your current expenses, future lifestyle, and inflation. A Certified Financial Planner (CFP) can assist in creating a detailed retirement plan tailored to your needs.

Regular Contributions: Continue your current investments. Increase your contributions as your income grows to build a substantial retirement corpus.

Power of Compounding
Compounding: The power of compounding significantly grows your wealth over time. Reinvesting your earnings ensures your returns generate further returns, leading to substantial growth in your investment corpus.

Risk Management
Market Volatility: Understand that markets fluctuate. Stay focused on your long-term goals and avoid reacting to short-term market movements.

Portfolio Diversification: Diversify your investments to balance risk and returns. This includes a mix of equity, debt, gold, and other instruments.

Educating Yourself
Financial Literacy: Enhance your financial literacy to make better investment decisions. There are numerous online resources and courses available.

Stay Updated: Keep informed about financial news and trends. This helps in making informed decisions and staying on top of your investments.

Role of a Certified Financial Planner
Professional Guidance: A CFP provides personalized advice based on your financial situation and goals. They help in creating a detailed retirement plan, optimizing your investments, and ensuring you're on track to meet your objectives.

Regular Check-ins: Regular consultations with a CFP can help you stay on course. They assist in rebalancing your portfolio and adapting to any changes in your financial situation or goals.

Exploring Additional Investment Options
Public Provident Fund (PPF): PPF is a safe investment option with tax benefits. Consider allocating a portion of your savings to PPF for long-term goals.

National Pension System (NPS): NPS offers tax benefits and is designed for retirement savings. It provides a mix of equity and debt, helping in building a substantial retirement corpus.

Creating a Retirement Plan
Detailed Planning: Work with a CFP to create a comprehensive retirement plan. It should include your current financial status, future goals, and a strategy to achieve them.

Regular Contributions: Increase your SIP contributions as your income grows. This accelerates the growth of your retirement corpus.

Final Insights
Retiring safely requires disciplined saving and investing. Start by securing an emergency fund and adequate insurance. Continue investing in equity mutual funds through SIPs and consider increasing your contributions over time. Diversify your investments to balance risk and returns. Regularly review and adjust your portfolio to stay aligned with your goals. Seek guidance from a Certified Financial Planner to create a detailed retirement plan tailored to your needs. Stay patient, disciplined, and focused on your long-term objectives.

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  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 02, 2024

Asked by Anonymous - Jun 19, 2024Hindi
Money
I am 35 years working as an IT professional.Due to other responsibilities I started MUtual fund last year with 40k every month. quant active, small and Mid cap and ICICI prudential bharat Should I re balance these funds or need to check some other funds.
Ans: I understand your situation as an IT professional managing multiple responsibilities. Starting mutual funds with Rs 40k every month is a great step! Let's dive into how you can optimize your investments for the best results.

Understanding Your Current Investment
You’ve started investing in active, small, and mid-cap funds, as well as an ICICI Prudential Bharat fund. Each type of fund serves different purposes and has unique risks and rewards.

Small and mid-cap funds can provide high returns but are more volatile.

Active funds aim to beat the market through expert stock selection.

Evaluating Fund Performance
Firstly, it's important to evaluate how your current funds have been performing. Check the returns of each fund over the past year, three years, and five years.

Consider their performance compared to their benchmark and category peers.

If any fund consistently underperforms, it might be time to consider alternatives.

Importance of Diversification
Diversification helps in spreading risk. By investing in different types of funds, you reduce the impact of any single fund's poor performance.

It's great that you have a mix of active, small, and mid-cap funds.

However, it's crucial to ensure you’re not overly concentrated in any one sector or market cap.

Actively Managed Funds vs. Index Funds
Actively managed funds aim to outperform the market through strategic stock selection. This can lead to higher returns, especially in a volatile market.

Index funds, on the other hand, simply track a market index. They tend to have lower costs but often provide lower returns compared to actively managed funds.

Considering your choice of actively managed funds, you're positioned to potentially benefit from higher returns, provided the fund manager's strategies pay off.

Regular Funds vs. Direct Funds
Direct funds have lower expense ratios as they don't include distributor commissions. However, they require you to choose and manage your investments independently.

Investing through a Certified Financial Planner (CFP) with mutual fund distributor (MFD) credentials ensures professional guidance. They can help you navigate market changes and rebalance your portfolio when needed.

The slightly higher cost of regular funds can be worthwhile due to the expert advice and support you receive.

Rebalancing Your Portfolio
Rebalancing involves adjusting your portfolio to maintain your desired asset allocation. It’s essential to review your portfolio at least once a year.

Look at the performance of each fund and your overall investment goals.

If one type of fund has grown significantly, it may dominate your portfolio, increasing risk.

Rebalancing can help you realign your investments with your risk tolerance and goals.

Considerations for Adding or Switching Funds
Before adding new funds or switching existing ones, consider the following:

Fund Objectives: Ensure the fund’s objective aligns with your financial goals.

Risk Profile: Understand the risk associated with each fund and ensure it matches your risk tolerance.

Expense Ratio: Lower expense ratios can significantly impact your returns over the long term.

Past Performance: While past performance is not a guarantee of future returns, consistent performance over time is a good indicator.

Professional Advice
A Certified Financial Planner can provide personalized advice based on your financial situation and goals. They can help you choose the right funds, monitor their performance, and make necessary adjustments.

Their expertise can be invaluable in navigating market fluctuations and optimizing your investment strategy.

Staying Informed
Stay updated with market trends and fund performance. Regularly read financial news, attend webinars, and consult with your financial planner.

Being informed helps you make better investment decisions and stay on track with your financial goals.


It's commendable that you have started investing Rs 40k every month despite your busy schedule. Balancing work, responsibilities, and investments is not easy.

Your commitment to securing a financially stable future is truly impressive. Keep up the excellent work!

Continuous Learning and Adaptation
The financial market is dynamic, and continuous learning is crucial. Adapt your strategy as needed based on market conditions and personal circumstances.

Remember, the goal is not just to invest but to invest wisely.

Final Insights
Investing is a journey, and you’ve taken significant steps by starting mutual funds. Regularly evaluate and rebalance your portfolio to align with your goals.

Seek professional advice to navigate complexities and optimize your strategy. Stay informed and adaptable to changes.

Keep up the dedication, and you’ll likely achieve your financial aspirations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 23, 2024

Money
Myself and wife have a stock investments which currently valued at 2cr, mutual funds 50L, fd, ppf, gsec, nsc, ncd etc together around 2cr. No loans, debt and own house also. We plan to stop working in next 5 years, currently we are in 41-43 age group. How should the currently porfolio be rebalanced to achieve the retirement target?
Ans: First, I must say you’ve done a commendable job with your investments. At the age of 41-43, you and your wife have built a robust portfolio, valued at Rs 2 crore in stocks, Rs 50 lakh in mutual funds, and Rs 2 crore in fixed deposits (FD), Public Provident Fund (PPF), Government Securities (G-sec), National Savings Certificate (NSC), and Non-Convertible Debentures (NCD). Owning your house outright and having no loans or debt puts you in an excellent financial position.

With plans to retire in the next five years, it’s crucial to reassess and rebalance your portfolio to ensure you achieve your retirement goals. Let’s dive into how we can strategically rebalance your portfolio for a secure and comfortable retirement.

Reviewing Your Investment Goals

Your primary goal is to retire in the next five years. This means we need to focus on capital preservation, income generation, and moderate growth to outpace inflation. Your current portfolio shows a good mix of equities and debt instruments, which is a strong start.

Evaluating Current Portfolio Allocation

1. Stock Investments (Rs 2 crore)

Stocks are high-risk but high-reward investments. With Rs 2 crore in stocks, you have a substantial equity exposure. Equities are excellent for growth but can be volatile, especially as you approach retirement.

2. Mutual Funds (Rs 50 lakh)

Your mutual funds are likely a mix of equity and debt funds. They provide diversification and are actively managed, which is beneficial. Actively managed funds can potentially offer higher returns compared to index funds, as fund managers can make strategic decisions.

3. Fixed Deposits (FD), PPF, G-sec, NSC, NCD (Rs 2 crore)

These instruments offer stability and security. They are low-risk and provide regular income, which is essential for a retirement portfolio.

Strategic Portfolio Rebalancing

1. Reducing Equity Exposure

Given your proximity to retirement, it's wise to gradually reduce your equity exposure. Equities are volatile, and a market downturn just before or during retirement can significantly impact your portfolio. Aim to reduce your stock investments to around 40-50% of your total portfolio.

Action Plan:

Gradually sell off a portion of your stock investments.
Reinvest the proceeds into less volatile, income-generating assets.
2. Increasing Fixed Income Investments

Increasing your allocation to fixed income instruments will provide stability and regular income. Focus on instruments like debt mutual funds, corporate bonds, and more Government Securities (G-secs).

Action Plan:

Increase investments in debt mutual funds which are actively managed for better returns.
Allocate more towards corporate bonds and G-secs for steady income.
3. Balancing Mutual Funds

Your mutual funds should have a mix of equity and debt. Shift a portion of your equity mutual funds into balanced or hybrid funds that invest in both equities and debt. This provides growth potential while reducing risk.

Action Plan:

Evaluate your current mutual funds with a Certified Financial Planner (CFP).
Shift some equity mutual funds to balanced or hybrid funds.
4. Building an Emergency Fund

Ensure you have an emergency fund equivalent to 6-12 months of living expenses. This fund should be easily accessible and invested in highly liquid, low-risk instruments like a savings account or liquid mutual funds.

Action Plan:

Set aside funds for emergencies in a savings account or liquid mutual funds.
5. Planning for Regular Income

In retirement, you’ll need a steady income stream. Consider investing in Senior Citizens Savings Scheme (SCSS), Post Office Monthly Income Scheme (POMIS), or systematic withdrawal plans (SWPs) from mutual funds. These provide regular income and are relatively low-risk.

Action Plan:

Invest in SCSS and POMIS for secure, regular income.
Set up SWPs from mutual funds for additional income.
Tax Efficiency and Planning

1. Tax-Efficient Investments

Ensure your investments are tax-efficient. Utilize the benefits of instruments like PPF and NPS, which offer tax exemptions. Tax planning is crucial to maximize your post-tax returns, especially during retirement when your income sources change.

Action Plan:

Maximize contributions to PPF and NPS for tax benefits.
Consult with your CFP to optimize your investment portfolio for tax efficiency.
2. Reviewing Insurance Policies

While you did not mention any insurance policies, it's essential to review any existing policies. Ensure you have adequate health insurance and, if necessary, a small life insurance policy to cover any liabilities or to provide for dependents.

Action Plan:

Review and ensure adequate health insurance coverage.
Consider a life insurance policy if needed for dependents.
Regular Financial Reviews

Your financial situation and market conditions will change over time. Regular reviews of your portfolio are crucial to stay on track. Work with your CFP to review your portfolio at least annually. Adjust your investments based on performance, market conditions, and changes in your financial goals.

Action Plan:

Schedule annual reviews with your CFP.
Adjust your portfolio based on professional advice and changing circumstances.
Retirement Lifestyle Planning

Think about your lifestyle post-retirement. Your expenses might change, and it’s essential to plan accordingly. Consider potential travel, hobbies, healthcare costs, and any other significant expenses.

Action Plan:

Estimate your post-retirement expenses with your CFP.
Ensure your investment strategy aligns with your lifestyle goals.
Final Insights

Your current financial position is strong, and with careful planning and strategic rebalancing, achieving a secure and comfortable retirement in the next five years is within reach. Reducing equity exposure, increasing fixed income investments, and ensuring regular income streams are crucial steps. Regular reviews and tax-efficient planning will further bolster your financial health.

Congratulations on building such a solid foundation, and best of luck in your journey towards a well-planned and prosperous retirement!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jun 19, 2024Hindi
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I am currently 51 and willing to retire at 56.current sips done is 1.33L per month.Started investing in June 2021 and so far invested value is 58 L and market value seen as 77 L..Now i am thinking to increase SIP by additinal 1.4 L per month so will it be good to increase sips for next 5 years .Pl advise.
Ans: Current Investment Analysis
You are investing Rs. 1.33 lakhs per month in SIPs. Since June 2021, your investment of Rs. 58 lakhs has grown to Rs. 77 lakhs. This shows good growth in your portfolio.

Increasing SIPs
You plan to increase your SIPs by Rs. 1.4 lakhs per month for the next 5 years. This will significantly boost your investment corpus. Regular investments in diversified funds can yield good returns over time.

Evaluating Investment Strategy
Increasing SIPs is a good strategy. Ensure you diversify across large cap, midcap, and small cap funds. Actively managed funds can offer better returns than index funds.

Balancing Risk and Returns
As you are nearing retirement, balance your portfolio to manage risk. Consider allocating a portion to debt funds for stability. This ensures safety and steady returns.

Planning for Retirement
With increased SIPs, your retirement corpus will grow substantially. Review your portfolio regularly. Adjust based on market conditions and financial goals.

Insurance and Emergency Fund
Ensure you have adequate life and health insurance. Maintain an emergency fund covering 6-12 months of expenses. This provides financial security for unforeseen events.

Final Insights
Increasing your SIPs by Rs. 1.4 lakhs per month is a good strategy. Ensure diversification and balance risk. Regular reviews and adjustments will help you achieve your retirement goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

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Hello sir, I am 44 year old male, working abroad, but here job security is not guaranteed. I can allocate Rs.50k monthly for MF or SIP investment. I feel ashamed to tell you this, that without consulting I had already invested in:- 1) Nippon India Growth Fund direct growth 50k 2) JM aggressive hybrid fund direct growth 50k 3) ICICI prudential balanced adv dire growth 50k 4) Quant mid cap fund direct growth 50k SIP's - 2500 per month 1) Nippon India multi cap Fund direct growth 2) SBI PSU direct plan growth 3) Quant small cap fund direct plan growth 4) ICICI prudential BHARAT 22 FOF direct growth Sir, Please advise whether this above plan is okay to continue or not also, please advise how to go ahead with 50k monthly allocation for investments. Benign regards Vinu George
Ans: Current Investments Review
Your current investments include:

Nippon India Growth Fund direct growth: Rs. 50k
JM Aggressive Hybrid Fund direct growth: Rs. 50k
ICICI Prudential Balanced Adv direct growth: Rs. 50k
Quant Mid Cap Fund direct growth: Rs. 50k
SIPs of Rs. 2,500 per month in:

Nippon India Multi Cap Fund direct growth
SBI PSU direct plan growth
Quant Small Cap Fund direct plan growth
ICICI Prudential BHARAT 22 FOF direct growth
Assessment of Current Investments
Direct funds can be beneficial due to lower costs, but managing them without professional guidance can be challenging.

Advantages of Actively Managed Funds
Expert Management: Actively managed funds have professional fund managers.
Better Returns: They can outperform index funds due to active management.
Flexibility: Fund managers can adjust portfolios based on market conditions.
Disadvantages of Direct Funds
Lack of Guidance: Investing in direct funds without a Certified Financial Planner can lead to suboptimal decisions.
Time-Consuming: Monitoring and managing these funds requires time and expertise.
Suggested Portfolio Allocation
To maximize returns and manage risk, consider the following:

Equity Funds
Allocate 60% to equity funds: These funds offer high growth potential. They are ideal for long-term goals like retirement.
Debt Funds
Allocate 30% to debt funds: Debt funds provide stability and reduce overall portfolio risk.
Diversified Funds
Allocate 10% to diversified funds: These funds invest across various sectors, balancing risk and returns.
Monthly Allocation Plan
You can invest Rs. 50k monthly. Here’s a suggested allocation:

Equity SIPs: Rs. 30k in a mix of large-cap, mid-cap, and multi-cap funds.
Debt SIPs: Rs. 15k in high-quality debt funds.
Diversified SIPs: Rs. 5k in diversified funds.
Professional Guidance
Seek advice from a Certified Financial Planner. They can help you:

Optimize Your Portfolio: Ensure a balanced and diversified portfolio.
Regular Reviews: Regularly review and adjust your investments based on performance and goals.
Final Insights
Your current investments need optimization. Focus on actively managed funds for better returns. Diversify your portfolio with a mix of equity, debt, and diversified funds. Consult a Certified Financial Planner for tailored advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

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Sir, My age is 40. I have a family with Mom, Dad, 2 daughters aged 13 years and my wife. I am the only source for income in my family. I am a business person and average monthly profit is approx 2 to 3 lakhs. There are lots of ups and downs in the business and profits are not consistant. So I am doing daily SIP of 5000 in HDFC Top 100 growth. Till date the MF is approx 9 lakhs. I have purchased a flat of Rs 1cr. With an home loan of 40 lakhs. Current EMI is 35000, tenure 20 years started last year. I have taken 2 health insurance policies, one for my mom and dad and another for us. Total yearly premium is 1.25 lakhs. My monthly expenses are approx 1.5 lakhs. I am bit worried about Daughters higher education as they wish to pursue MBBS. Secondly I need to save for my retirement. I wish to retire at 55. Please suggest if I am on right track or I need to change my investment patterns?
Ans: Current Financial Overview

You have a monthly profit of Rs 2-3 lakhs from your business, but it fluctuates. You have a daily SIP of Rs 5000 in HDFC Top 100 growth, amounting to Rs 9 lakhs till now. You have a home loan of Rs 40 lakhs with an EMI of Rs 35,000 for 20 years. Your monthly expenses are around Rs 1.5 lakhs, and you have two health insurance policies with a total annual premium of Rs 1.25 lakhs.

Goals and Concerns

Daughters' Higher Education: Both daughters wish to pursue MBBS.
Retirement Planning: Aim to retire at age 55.
Education Planning

Estimate Costs: MBBS education can be expensive. Estimate the total cost considering tuition, books, and other expenses.

Dedicated Education Fund: Start a dedicated SIP for your daughters’ education. Consider a combination of equity and debt mutual funds for stability and growth.

Retirement Planning

Current Investments: Your daily SIP in HDFC Top 100 growth is a good start. Continue this but also diversify.

Additional Investments: Consider starting SIPs in a mix of large-cap, mid-cap, and multi-cap funds. This will balance risk and growth.

Retirement Fund: Calculate the corpus needed for retirement at age 55. Factor in your lifestyle, inflation, and life expectancy.

Insurance Coverage

Health Insurance: Your existing health insurance for your parents and family is crucial. Ensure coverage is adequate for medical emergencies.

Term Insurance: Consider taking a term insurance plan to cover your family’s financial needs in case of any unforeseen event.

Debt Management

Home Loan: Your EMI of Rs 35,000 is manageable given your income. Try to prepay whenever you have extra funds. This will reduce the loan tenure and interest burden.
Emergency Fund

Build an Emergency Fund: Keep at least 6-12 months of expenses in a liquid fund or savings account. This will help during business downturns.
Final Insights

Your current investments and insurance coverage are good, but diversification and dedicated funds for education and retirement will strengthen your financial plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 16, 2024Hindi
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I am a Nri based in Singapore age 31 sole earner of my family of 3. In Inr my income is 63 lakhs and I want to invest money to save for my daughter who is 3 months old right now and also for my retirement. Below is my portfolio- 29k sip - 2.90 lkh invested 1.13 lkh profit Stocks- 2.7 lkhs invested 3.12 lkh profit Small case- 19k invested 5k profit Nps - 1 lkh invested - 90k profit One 2- bedroom flat in udaipur no loan bought for 35 lkh No loan no credit card 49 lkh in saving in Singapore. Health insurance in Singapore by company Ppf- 12 lkh Able to save 4000 sgd monthly after rent; grocery etc. How much more should i invest or should just continue with above? Sip - 5k canara robecca emerging equities growth large and mid cap. 3k Nippon india small cap. 1k Canara robecca elss tax saver fund. 10k Quant elss tax saver and 10k hdfc defence fund growth equity sectoral
Ans: You have a well-diversified portfolio, which is a strong foundation. Here's a detailed look at your investments:

SIPs: Rs. 29k invested with Rs. 1.13 lakh profit.
Stocks: Rs. 2.7 lakh invested with Rs. 3.12 lakh profit.
Smallcase: Rs. 19k invested with Rs. 5k profit.
NPS: Rs. 1 lakh invested with Rs. 90k profit.
Flat in Udaipur: Bought for Rs. 35 lakh, no loan.
Savings in Singapore: Rs. 49 lakh.
PPF: Rs. 12 lakh.
SIPs: 5k in Canara Robeco Emerging Equities Growth Large and Mid Cap, 3k in Nippon India Small Cap, 1k in Canara Robeco ELSS Tax Saver Fund, 10k in Quant ELSS Tax Saver, 10k in HDFC Defence Fund Growth Equity Sectoral.
Your investments are diverse, including equity, real estate, and fixed income. This diversification reduces risk and ensures stability.

Investment Strategy for Daughter's Education
To secure your daughter's future, start a dedicated education fund:

Equity Mutual Funds: Equity funds are ideal for long-term growth. They can offer high returns over 15-20 years, which aligns with your daughter's education timeline.
SIPs for Education Fund: Start an SIP specifically for her education. Consider allocating a portion of your monthly savings to this SIP.
Review and Adjust: Regularly review the fund's performance and adjust contributions if needed.
Retirement Planning
Your current investments are strong, but there's always room for enhancement:

Continue Current Investments: Your existing SIPs, stocks, and other investments are performing well. Continue these.
Diversify Further: Include a mix of equity and debt funds. Equity funds can provide growth, while debt funds add stability.
Increase SIP Amounts: Gradually increase your SIP contributions as your income grows. This will help in compounding your returns.
Equity and Debt Balance: Maintain a balance between equity and debt funds to manage risk and ensure steady growth.
Monthly Savings Allocation
You save 4000 SGD monthly (approximately Rs. 2.4 lakhs). Here's a suggested allocation:

Increase SIPs: Allocate a portion to increase your SIP contributions in the existing funds.
Diversified Mutual Funds: Invest in additional diversified mutual funds to spread risk and enhance returns.
Debt Funds: Allocate a part to debt funds for stability and lower risk.
Professional Guidance
It's crucial to seek advice from a Certified Financial Planner:

Regular Consultation: Schedule regular reviews with your planner to assess your portfolio and make necessary adjustments.
Goal Setting and Tracking: Clearly define your goals (daughter’s education and retirement) and track your progress.
Final Insights
Your portfolio is well-structured, but consider the following to optimize your investments:

Increase SIPs: Gradually increase your SIP contributions for higher returns.
Focus on Equity Funds: Prioritize equity funds for long-term goals like your daughter's education and your retirement.
Diversification and Balance: Ensure a balanced mix of equity and debt funds to manage risk.
Regular Reviews: Keep reviewing your portfolio with a Certified Financial Planner to stay on track with your goals.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jun 18, 2024Hindi
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I'm 27 years old and married with 1 daughter (age 1 month) and from last 2 year I'm doing sip on 4 equity MF with 14k ( 5 on small cap, 5 midcap, 3 large cap, 1 flexicap), and holding stocks worth 4 lac, now I'm planning to invest more 5k in large & midcap, midcap 3k and small cap 3k, and quarterly 30k on sovereign gold bonds. My investment time frame is 10 year and I want to retire at 40 age. Please suggest me if any changes required or not.
Ans: Current Investment Strategy
You are investing in equity mutual funds and stocks. Your monthly SIPs total Rs. 14,000. You plan to add Rs. 11,000 more in various mutual funds and Rs. 30,000 quarterly in sovereign gold bonds.

Assessing Your Investment Mix
Your portfolio is well-diversified across small cap, midcap, large cap, and flexicap funds. This diversification balances risk and potential returns.

Adding More Investments
Adding more to large & midcap, midcap, and small cap funds is good. It aligns with your long-term goals. Sovereign gold bonds add stability and diversification.

Retirement Planning
You plan to retire at 40, giving you a 13-year investment horizon. This requires a substantial corpus. Ensure your savings are aggressive yet balanced. Regularly review and adjust your portfolio.

Insurance and Emergency Fund
Ensure you have adequate life and health insurance. This protects your family. Maintain an emergency fund covering 6-12 months of expenses.

Final Insights
Your investment strategy is sound and diversified. Continue with disciplined investments. Regularly review and adjust based on market conditions and goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 16, 2024Hindi
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Hi there, I am 34 yr old, new in market. Never invested in any mutual funds or anything. Can you guide me whats best option for me right now in terms of mutual funds, stocks, bonds, Etfs etc. Looking for ling term investment. Thanks in advance!!
Ans: As a 34-year-old new investor, you have the advantage of a long investment horizon, which allows you to benefit from compounding. Here's a guide to help you get started.

Investment Options

1. Mutual Funds

Equity Mutual Funds: Suitable for long-term growth. Invests in stocks and provides diversification. Ideal for those looking to build wealth over time.

Debt Mutual Funds: Safer option, invests in bonds and government securities. Provides regular income and stability.

Hybrid Mutual Funds: Combines equity and debt. Balanced approach to growth and stability.

2. Stocks

Direct Stock Investment: Invest in individual companies. Requires research and monitoring. Potential for high returns but comes with higher risk.
3. Bonds

Government Bonds: Safe and secure. Provides fixed returns over time. Suitable for conservative investors.

Corporate Bonds: Higher returns than government bonds but come with higher risk.

4. Exchange-Traded Funds (ETFs)

ETFs: Trades like a stock but holds a diversified portfolio. Offers exposure to a wide range of assets with lower fees.
Investment Strategy

1. Define Your Goals

Long-Term Goals: Retirement, children's education, buying a house. Helps in choosing the right mix of assets.
2. Assess Your Risk Appetite

High Risk Tolerance: Can invest more in equity mutual funds and stocks.
Moderate Risk Tolerance: Balance between equity and debt funds.
Low Risk Tolerance: Focus more on debt funds and bonds.
3. Diversify Your Portfolio

Diversification: Spread investments across different asset classes. Reduces risk and enhances returns.
4. Start with Systematic Investment Plans (SIPs)

SIPs: Invest a fixed amount regularly in mutual funds. Disciplined approach and benefits from rupee cost averaging.
5. Review and Rebalance

Regular Reviews: Monitor your investments periodically.
Rebalancing: Adjust your portfolio based on performance and changing goals.
Recommended Approach

For a Balanced Portfolio:

Equity Mutual Funds: 60% of your portfolio. Choose a mix of large-cap, mid-cap, and small-cap funds.
Debt Mutual Funds: 20% of your portfolio. Provides stability and income.
Bonds: 10% of your portfolio. Safe and secure returns.
ETFs: 10% of your portfolio. Diversified and low-cost option.
Final Insights

Starting your investment journey with a mix of mutual funds, bonds, and ETFs can provide a balanced approach to growth and stability. Regularly review your investments and adjust as needed to stay aligned with your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 16, 2024Hindi
Listen
Money
Hi there, I am 34 yr old, new in market. Never invested in any mutual funds or anything. Can you guide me whats best option for me right now in terms of mutual funds, stocks, bonds, Etfs etc. Looking for ling term investment. Thanks in advance!!
Ans: As a 34-year-old new investor, you have the advantage of a long investment horizon, which allows you to benefit from compounding. Here's a guide to help you get started.

Investment Options

1. Mutual Funds

Equity Mutual Funds: Suitable for long-term growth. Invests in stocks and provides diversification. Ideal for those looking to build wealth over time.

Debt Mutual Funds: Safer option, invests in bonds and government securities. Provides regular income and stability.

Hybrid Mutual Funds: Combines equity and debt. Balanced approach to growth and stability.

2. Stocks

Direct Stock Investment: Invest in individual companies. Requires research and monitoring. Potential for high returns but comes with higher risk.
3. Bonds

Government Bonds: Safe and secure. Provides fixed returns over time. Suitable for conservative investors.

Corporate Bonds: Higher returns than government bonds but come with higher risk.

4. Exchange-Traded Funds (ETFs)

ETFs: Trades like a stock but holds a diversified portfolio. Offers exposure to a wide range of assets with lower fees.
Investment Strategy

1. Define Your Goals

Long-Term Goals: Retirement, children's education, buying a house. Helps in choosing the right mix of assets.
2. Assess Your Risk Appetite

High Risk Tolerance: Can invest more in equity mutual funds and stocks.
Moderate Risk Tolerance: Balance between equity and debt funds.
Low Risk Tolerance: Focus more on debt funds and bonds.
3. Diversify Your Portfolio

Diversification: Spread investments across different asset classes. Reduces risk and enhances returns.
4. Start with Systematic Investment Plans (SIPs)

SIPs: Invest a fixed amount regularly in mutual funds. Disciplined approach and benefits from rupee cost averaging.
5. Review and Rebalance

Regular Reviews: Monitor your investments periodically.
Rebalancing: Adjust your portfolio based on performance and changing goals.
Recommended Approach

For a Balanced Portfolio:

Equity Mutual Funds: 60% of your portfolio. Choose a mix of large-cap, mid-cap, and small-cap funds.
Debt Mutual Funds: 20% of your portfolio. Provides stability and income.
Bonds: 10% of your portfolio. Safe and secure returns.
ETFs: 10% of your portfolio. Diversified and low-cost option.
Final Insights

Starting your investment journey with a mix of mutual funds, bonds, and ETFs can provide a balanced approach to growth and stability. Regularly review your investments and adjust as needed to stay aligned with your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jun 17, 2024Hindi
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Sir,my aim was to study cse, now I have got electrical and computer in Thapar which costs around 5.4lakhs pa, amrita amaravati campus cse which costs around 3lakhs pa tuition fees, so it will go around 4-4.5 pa(including everything), and IEM in Kolkata IT branch which will cost around 7-8lakhs for 4years. Sir please guide me, money is not that much of a factor but I don't want to use my father's hard earned money, and would like to take a loan if the budget goes over 10lakhs. Sir please help me out as I am confused. Thank you.
Ans: Evaluating Your Options

You have three educational options:

Electrical and Computer Engineering at Thapar Institute.
Computer Science Engineering at Amrita Amaravati.
Information Technology at IEM Kolkata.
Let’s break down the financial aspects of each option to help you make an informed decision.

Cost Analysis

Thapar Institute:

Annual Cost: Rs 5.4 lakhs
Total for Four Years: Rs 21.6 lakhs
Amrita Amaravati:

Annual Tuition Fee: Rs 3 lakhs
Total for Four Years (including other expenses): Rs 12-15 lakhs
IEM Kolkata:

Total for Four Years: Rs 7-8 lakhs
Budgeting Considerations

Thapar Institute:

High Cost: The total cost of Rs 21.6 lakhs is significant.
Loan Requirement: Given the high cost, you might need to take a substantial loan, especially if the budget exceeds Rs 10 lakhs.
Amrita Amaravati:

Moderate Cost: Total cost is around Rs 12-15 lakhs, more manageable.
Potential Loan: You might need a smaller loan, making repayment easier.
IEM Kolkata:

Low Cost: Total cost is the most economical at Rs 7-8 lakhs.
Minimal Loan: If at all required, the loan amount would be minimal.
Personal Finance Impact

Parental Contribution vs. Loan

Thapar Institute: Requires a significant financial outlay or loan, impacting your family's finances. If a loan is taken, ensure that the interest rates and repayment terms are favorable.

Amrita Amaravati: More balanced in terms of cost. You might need a smaller loan, which would be easier to manage and repay.

IEM Kolkata: Least financial burden. If you prefer to minimize your family's financial stress, this is the best option.

Long-term Financial Planning

Return on Investment (ROI)

Thapar Institute: High ROI potential due to its strong reputation and placement record. However, the high initial cost needs to be justified by future earnings.

Amrita Amaravati: Good ROI with moderate costs. As it aligns with your preferred field (CSE), it offers a balanced investment with potentially good returns.

IEM Kolkata: Economical with good placement opportunities. Offers a favorable ROI with the least financial burden.

Loan Repayment

Thapar Institute: Higher loan amount means higher EMIs. Ensure you have a clear repayment plan based on your expected starting salary.

Amrita Amaravati: Moderate loan amount results in manageable EMIs. Easier to handle with a decent starting salary.

IEM Kolkata: Minimal loan requirement, if any. Loan repayment will be the least stressful.

Emergency Fund and Savings

Regardless of your choice, maintain an emergency fund for unforeseen expenses.

Plan to save a portion of your income post-graduation to build a financial cushion.

Final Insights

From a personal finance and budgeting perspective:

Amrita Amaravati strikes a balance between cost and your preferred field, making it a prudent choice with manageable financial implications.

Thapar Institute is a significant investment with potentially high returns but requires careful financial planning due to the higher costs involved.

IEM Kolkata offers the least financial strain and is a good option if minimizing costs is a priority.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4855 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Listen
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Hi, I am 40 years old, stay with wife , no kids. My monthly take home salary is 1,00,000. I have yearly contributions towards Tax saver mutual funds of 1,20,000. PPF of 30,000 and NPS of 50,000. Investment towards non tax saver mutual funds of 36,000 for last 3 years. 23,000 is my rent and 50,000 is my monthly family expense. I have a house in my native where my mother stay with approx valuation of 50L. Wife has a plot in her native which is priced 1Cr as of today. Please suggest what should be my retirement corpus and how to achieve the same.
Ans: You have a monthly take-home salary of Rs. 1,00,000. Your annual investments are:

Tax Saver Mutual Funds: Rs. 1,20,000
PPF: Rs. 30,000
NPS: Rs. 50,000
Non-Tax Saver Mutual Funds: Rs. 36,000
Your monthly expenses are:

Rent: Rs. 23,000
Family Expenses: Rs. 50,000
Evaluating Existing Investments
Your current investments in tax saver and non-tax saver mutual funds, PPF, and NPS are good. These will help build your retirement corpus over time.

Estimating Retirement Corpus
Assume you plan to retire at 60 and live till 85. You need a retirement corpus to cover 25 years. Considering inflation and current expenses, your retirement corpus should be substantial.

Steps to Achieve Retirement Corpus
Increase Monthly Savings: You have Rs. 27,000 left after expenses. Allocate this to your retirement savings.

Diversify Investments: Continue investing in mutual funds and NPS. Consider increasing your SIP amounts gradually.

Review and Adjust Investments: Regularly review your portfolio. Adjust based on market conditions and financial goals.

Consider Health Insurance: Ensure you have adequate health insurance. This protects your savings from medical emergencies.

Emergency Fund: Maintain an emergency fund. This should cover 6-12 months of expenses.

Property Valuation
Your house and wife's plot are significant assets. Though not recommended for real estate investment, they provide financial security.

Final Insights
You are on the right track with diversified investments. Increase your savings, review regularly, and ensure you are covered for emergencies. This will help you achieve a secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...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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