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Ramalingam

Ramalingam Kalirajan  |3200 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 16, 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
Kaustubh Question by Kaustubh on May 09, 2024Hindi
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Hello. I am 41 years old and I am planning to open my own small business of food outlet as I was in same industry in next 1 month after planning of 1.5 years. Currently I have below savings. 4,00,000/- in NPS adding 5,000 each month. 6,00,000/- in PPF adding 5,000 each month. I have below SIP. Franklin India tax shield growth. Investment is 10,70,000/- and gain is 51,21700/- 5000 SIP. HDFC Defense fund regular growth. Investment is 33,000/- and gain is 15,538/- 3000 SIP. HDFC Flexi Cap Fund Direct growth. Investment is 5,48,000/- and gain is 11,70,600/- 4000 SIP. And also invested in below mutual funds as lumpsum. Aditya Birla sunlife Equity Hybrid fund growth. AXIS small cap fund regular growth. HDFC Balanced Advantage Fund direct growth HDFC Midcap opportunities fund regular growth HDFC NIFTY200 momentum index fund growth HDFC small cap fund direct growth HDFC top 100 fund direct growth ICICI Prudential Bluechip Fund Growth Motilal Oswal large and mid cap fund growth Motilal Oswal small cap fund regular growth Nippon India multi cap fund retail plan growth Nippon India small cap fund growth Quant small cap fund regular growth SBI contra fund growth UTI MNC fund growth. Total Investment is 21,50,000/- and gain is 16,70,000/- which was reinvested as tax-harvesting in same mutual funds. Since my age of 25 I have started investing 10,000/- in NSC. And after maturing after 5 years add 15,000/- and make it round figure value in and then some same thing in my years of 35 to 40 years. Invested 25,000/- and made round five and invested in NSC. I get maturity of NSC on 1st of every month now. I have 25,00,000 as emergency fund kept in FDs in bank. And I have also invested if Rs. 12,00,000 in shares from which gain is of 6,00,000/- Investmentv in physical gold is 3,50,000/- from which gain is 35,00,000/- Investment in physical silver is 75,000/- from which gain is 3,50,000/- ULIP investment is 1,50,000/- and gain is 2,70,000/- My monthly income is the income which I receive from FDs and NSC maturation which I reinvest now. My expenses exceeds no more than 65,000/- which includes SIP investment and PPF and NPS investments. I have my own home which costs 95,00,000/- and 18 years of EMIs are pending which my wife is paying pending amount as we divide everything in home. I have 7 years old son who is studying in school I want suggestion that can I retire now or should I start getting along with small business. As if I stay back home it will be very hard for me coz previously I used to work for more than 12 to 14 hours daily. Also do let me know if I need to change anything in my investment.

Ans: Retirement Planning and Business Venture Analysis
Your comprehensive financial portfolio reflects diligent savings and diverse investments. Let's evaluate whether you can retire comfortably or should proceed with your small business venture, considering your financial situation and goals.

Retirement Readiness Assessment
Retirement Corpus:
NPS: ?4,00,000 + ?5,000 monthly
PPF: ?6,00,000 + ?5,000 monthly
SIPs and Mutual Funds: Diversified portfolio with substantial gains
NSC: Consistent investments
Emergency Fund: ?25,00,000 in FDs
Real Estate and Other Investments: Including shares, gold, silver, and ULIPs
Expenses and Liabilities:
Monthly Expenses: Within ?65,000, including investments
Home Loan: Being managed jointly with your wife
Business Venture Consideration
Pros:
Fulfillment of entrepreneurial aspirations
Potential for additional income and growth
Utilization of skills and experience in the food industry
Cons:
Risk of business failure or financial loss
Time and effort required may impact work-life balance
Uncertainty in initial business profitability
Retirement Decision and Investment Review
Retirement:
With your substantial investments and diversified portfolio, early retirement is feasible.
Regular review and rebalancing of investments may be necessary to ensure sustained income growth and stability.
Business Venture:
Proceeding with your small business can offer new opportunities for income and personal fulfillment.
Assess the financial viability and risks involved in the venture carefully before making a decision.
Investment Review:
Consider consolidating or reallocating investments based on your retirement goals and risk tolerance.
Seek professional advice to optimize your portfolio for retirement income generation and business investment.
Conclusion
Your financial prudence and diversified investments provide a strong foundation for retirement. Whether you choose to retire or pursue your small business venture, careful planning and periodic review of your investments are crucial for long-term financial security. Consider your personal aspirations, risk appetite, and financial goals before making a decision.

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  |3200 Answers  |Ask -

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

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Hello. I am 41 years old and I am planning to open my own small business of food outlet as I was in same industry in next 1 month after planning of 1.5 years. Currently I have below savings. 4,00,000/- in NPS adding 5,000 each month. 6,00,000/- in PPF adding 5,000 each month. I have below SIP. Franklin India tax shield growth. Investment is 10,70,000/- and gain is 51,21700/- 5000 SIP. HDFC Defense fund regular growth. Investment is 33,000/- and gain is 15,538/- 3000 SIP HDFC Flexi Cap Fund Direct growth. Investment is 5,48,000/- and gain is 11,70,600/- 4000 SIP And also invested in below mutual funds as lumpsum. Aditya Birla sunlife Equity Hybrid fund growth. AXIS small cap fund regular growth HDFC Balanced Advantage Fund direct growth HDFC Midcap opportunities fund regular growth HDFC NIFTY200 momentum index fund growth HDFC small cap fund direct growth HDFC top 100 fund direct growth ICICI Prudential Bluechip Fund Growth Motilal Oswal large and mid cap fund growth Motilal Oswal small cap fund regular growth Nippon India multi cap fund retail plan growth Nippon India small cap fund growth Quant small cap fund regular growth SBI contra fund growth UTI MNC fund growth. Total Investment is 21,50,000/- and gain is 16,70,000/- which was reinvested as tax-harvesting in same mutual funds. Since my age of 25 I have started investing 10,000/- in NSC And after maturing after 5 years add 15,000/- and make it round figure value in and then some same thing in my years of 35 to 40 years. Invested 25,000/- and made round five and invested in NSC. I get maturity of NSC on 1st of every month now. I have 10,00,000 as emergency fund kept in FDs in bank. And I have also invested if Rs. 12,00,000 in shares from which gain is of 6,00,000/ Investmentv in physical gold is 3,50,000/- from which gain is 35,00,000/- Investment in physical silver is 75,000/- from which gain is 3,50,000/- ULIP investment is 1,50,000/- and gain is 2,70,000/- My monthly income is NIL. And my expenses exceeds no more than 50,000/- which includes SIP investment and PPF and NPS investments. I have my own home which costs 95,00,000/- and 18 years of EMIs are pending which my wife is paying pending amount as we divide everything in home. I have 7 years old son who is studying in school I want suggestion that can I retire now or should I start getting along with small business. As if I stay back home it will be very hard for me coz previously I used to work for more than 12 to 14 hours daily. Also do let me know if I need to change anything in my investment.
Ans: Congratulations on your diligent savings and investment journey! Your detailed financial portfolio reflects years of disciplined planning and prudent decision-making. It's impressive how you've diversified across various asset classes, including mutual funds, NSC, real estate, and precious metals.

Regarding your plan to start a small food outlet business, it's essential to assess your financial situation and risk appetite carefully. While your investments provide a strong financial cushion, transitioning to entrepreneurship requires thorough consideration of cash flow requirements, business risks, and potential returns.

Given your history of hard work and dedication, pursuing your entrepreneurial dream seems feasible. However, ensure you have a robust business plan in place, including financial projections and contingency measures. Additionally, consider consulting with a business advisor or mentor to validate your business idea and strategy.

Regarding your investments, your portfolio appears well-diversified, but it's always prudent to periodically review and rebalance based on changing market conditions and personal goals. Consider consulting with a Certified Financial Planner to ensure your investment strategy aligns with your long-term objectives, including retirement planning and your son's education.

Remember, entrepreneurship entails both opportunities and challenges, so proceed with careful planning and realistic expectations. Your determination and financial discipline will likely serve you well in this new endeavor. Wishing you success in your entrepreneurial journey!

..Read more

Ramalingam

Ramalingam Kalirajan  |3200 Answers  |Ask -

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

Asked by Anonymous - May 08, 2024Hindi
Money
Sir, I am 38 years old, working in a PSB in a managerial post (Scale 3) in Kolkata. My dependents are two sons (twins) aged 2.5 years and wife. My gross salary is 1.56 lacs, and my net salary is 91k. My current investments are EPF (mandatory for my PSB), a monthly contribution of Rs. 33,740 (employee-25%+employer-10%) with a current balance of Rs. 32 Lacs, and NPS (mandatory for my PSB), a monthly contribution of Rs. 26,840 (employee-10%+employer-14%) with a current balance of Rs. 25.50 Lacs. Both PF and NPS amounts are progressive, with increments in salary and DA in each year/ quarter and the 5 yearly bipartite settlements (next due in 2027). I have recently started SIP of Rs. 25,000 per month. Funds are PSU-2k, Infrastructure-1k, Focused Equity-2k, Small Cap-2k, Blue Chip-2k, Magnup Midcap-2k, Contra-2k, Dividend Yield-2k, Technology Opportunities-2k, Magnum Global-1k, Healthcare Opportunities-1k, Energy Opportunities-1k, Nifty Index-1k, Nifty 50 Equal Weight-1k, Nifty Midcap 150-1k, Nifty Next 50-1k, and Nifty Small Cap 250-1k. All funds are from SBIMF. The current investment value is Rs. 65k. I also buy stocks of Rs. 5k monthly (only NIFTY 50 stocks), with my current investments being Rs. 55k. Other than this, I don't have any savings. My medical and Mediclaim are taken care of by my Bank through empaneled hospitals and reimbursement of domiciliary treatments (though I need to have an emergency fund). I have a home (inherited from my parents). The house is of 2 floors, and we are only 4 people (me, my wife, and 2 sons), though I wish to buy 1 in future in a good complex. Current liabilities are OD of 12 lacs and an internal loan from my bank of 5 lacs. Both EMIs (in case of internal Loan) and Interest (in case of OD) is served from my salary and Rs. 91k is what I get post deduction of EMI, Interest, PF and NPS. Hence this is my disposable income. My monthly expenses is around RS. 60k (including everything). Now are these investments enough to serve my 2 Child's Education and My retirement (I'll retire at 60 in 2046). I'm under NPS, hence I dont have a Pension, but my PSB gives both PF and NPS along with pother retirement benefits like Leave encashment of 8 months and Gratuity. Kindly advise.
Ans: Financial Assessment and Planning for Your Future

Understanding Your Current Financial Position

You're in a stable career with a consistent income, which is a great foundation for financial planning. Your investments in EPF, NPS, SIPs, and stocks reflect a proactive approach towards securing your future and that of your family. However, it's crucial to assess whether these investments align with your long-term goals.

Assessment of Retirement Planning

Retiring at 60 in 2046 gives you approximately 18 years to prepare financially. Your EPF and NPS contributions, coupled with other retirement benefits provided by your PSB, form the backbone of your retirement corpus. However, it's essential to periodically review your retirement goals and adjust your contributions accordingly to ensure you're on track to meet your desired lifestyle post-retirement.

Evaluation of Child Education Planning

With twin sons aged 2.5 years, planning for their education is paramount. Your SIPs and stock investments can contribute towards building a corpus for their higher education expenses. Considering the rising cost of education, it's advisable to increase your monthly SIP contributions gradually to meet future educational expenses effectively.

Assessment of Emergency Fund and Liabilities

Maintaining an emergency fund is crucial to cover unexpected expenses and mitigate financial risks. Given your current liabilities, including an OD and an internal loan, it's prudent to prioritize building an emergency fund equivalent to at least 6-12 months' worth of expenses.

Recommendations for Financial Planning

Review and Adjust Contributions: Regularly review your EPF, NPS, and SIP contributions to ensure they're in line with your evolving financial goals. Consider increasing contributions to SIPs gradually to build a robust corpus for retirement and your children's education.

Diversification and Risk Management: While your investments in SIPs and stocks are commendable, ensure diversification across asset classes to manage risk effectively. Consider exploring debt funds or other conservative investment options to balance the risk in your portfolio.

Prioritize Debt Repayment: Focus on repaying your current liabilities, such as the OD and internal loan, to reduce financial stress and free up cash flow for future investments and expenses.

Seek Professional Advice: Consider consulting with a Certified Financial Planner (CFP) to create a comprehensive financial plan tailored to your specific needs and goals. A CFP can provide personalized recommendations and strategies to optimize your investments and achieve long-term financial security.

Final Words of Encouragement

Your proactive approach towards financial planning is commendable. By staying disciplined, reviewing your investments regularly, and seeking professional advice when needed, you're laying a strong foundation for a secure and prosperous future for yourself and your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |3200 Answers  |Ask -

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

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Hello Sir im turning 36 this Dec...Im not very old in MF investment however looking forward to being consistant...I want to build up a corpas of 50 lakh by age of 40..my invest as per below... Quant/kotak/axis small cap direct growth- 10K each/month(9 month old) parag parikh ELSS tax saver- 2K/month(12 month old) mirae asset ELSS tax saver-2.5K/month(3 year old) quant ELSS tax saver-3K/month(16 month old) Kotak ELSS tax saver-2K/month(16 month old) SBI PSU direct plan-3K/month( 1 month) Aditya birla sunlife PSU equity fund- 5K/month(1 month) need your expertise if I need to change funds...these are combined investment by me & my wife..TAX saver are required to avoid tax liability under 80C..aprat from this Im investing 40K/year in PPF valued 1lakh(3 year old)
Ans: It's great to see your commitment to building your investment portfolio. Let's review your current mutual fund investments and see if any adjustments are needed to align with your goal of accumulating a corpus of ?50 lakhs by the age of 40.
Your current allocation seems well-diversified across various mutual fund categories, including small-cap funds, ELSS tax savers, and sector-specific funds like SBI PSU and Aditya Birla Sunlife PSU equity funds. However, there are a few points to consider:
1. Small-Cap Funds: Investing in small-cap funds can offer high growth potential but comes with increased risk due to market volatility. Since you're relatively new to mutual fund investments, ensure you have a high risk tolerance and a long-term investment horizon for these funds.
2. ELSS Tax Saver Funds: It's wise to continue investing in ELSS funds to avail tax benefits under Section 80C. However, having multiple ELSS funds may lead to duplication of holdings and increase complexity without significantly diversifying your portfolio. Consider consolidating your ELSS investments into one or two funds with a proven track record and consistent performance.
3. Sector-Specific Funds: Funds like SBI PSU and Aditya Birla Sunlife PSU equity focus on specific sectors, which can be volatile and dependent on sectoral performance. While they offer the potential for high returns, they also carry higher risk. Ensure these funds complement your overall portfolio strategy and are not over-concentrated in a single sector.
4. PPF Investment: Investing in PPF is a good strategy for long-term wealth accumulation and tax-saving. However, keep in mind that PPF has a lock-in period of 15 years, so ensure it aligns with your liquidity needs and investment goals.
Considering the above points, here are some suggestions:
• Evaluate the performance of your existing funds and consider consolidating your ELSS investments into one or two funds with strong fundamentals and consistent performance.
• Monitor the performance of small-cap funds closely due to their higher volatility and consider rebalancing your portfolio if needed.
• Review your sector-specific fund investments periodically and ensure they align with your risk tolerance and investment objectives.
Lastly, it's essential to regularly review your investment portfolio and make adjustments as needed to stay on track towards your financial goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

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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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