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Ramalingam

Ramalingam Kalirajan  |7872 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 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 - Apr 29, 2024Hindi
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Hello sir I am 43 and from 2017 monthly invested sbi mf 5000 Kotak small cap fund 2500 mirae asset elss 2500 icic pru 2500 and sbi blue chip 1500.. currenly hve salary 1.35 lakh and have obligation of Rs 55 k monthly.. ppf 10000 monthly invest and 5000 nps investment if you suggest better please guid future gol of monthly 1.50 lkh

Ans: Your consistent monthly investments since 2017 reflect admirable financial discipline. Let's review your current investments and suggest potential adjustments to align with your future goals.

Review of Current Investments
1. SBI MF Monthly Investment:

Allocation: ?5,000 monthly.
Assessment: SBI Bluechip Fund may offer stability and consistent returns, suitable for long-term wealth creation.
2. Kotak Small Cap Fund:

Allocation: ?2,500 monthly.
Assessment: Small cap funds offer high growth potential but come with higher risk due to volatility.
3. Mirae Asset ELSS:

Allocation: ?2,500 monthly.
Assessment: ELSS funds provide tax benefits with potential for equity market growth. Suitable for long-term goals.
4. ICICI Pru Fund:

Allocation: ?2,500 monthly.
Assessment: Depending on the specific fund, ICICI Pru offers a range of options catering to different risk profiles.
5. SBI Blue Chip Fund:

Allocation: ?1,500 monthly.
Assessment: Provides exposure to bluechip companies, offering stability and steady returns.
6. PPF and NPS Investments:

Allocation: ?10,000 in PPF and ?5,000 in NPS monthly.
Assessment: PPF and NPS offer tax benefits and retirement savings, contributing to long-term financial security.
Potential Adjustments and Suggestions
1. Review of Existing Funds:

Performance Check: Evaluate the performance of your current funds against benchmarks and peers.
Risk Assessment: Consider your risk tolerance and investment horizon when assessing the suitability of each fund.
2. Optimal Allocation:

Strategic Rebalancing: Consider rebalancing your portfolio to align with your financial goals and risk tolerance.
Diversification: Aim for a well-diversified portfolio across asset classes and investment styles.
3. Additional Investments:

Increase Monthly Contributions: Since you aim to increase your monthly investment to ?1.50 lakh, consider allocating the additional funds strategically.
Asset Allocation: Ensure a balanced allocation across equity, debt, and other asset classes based on your risk profile and financial goals.
4. Professional Guidance:

Engage a Certified Financial Planner (CFP): Seek personalized advice from a CFP to optimize your portfolio and ensure it aligns with your long-term objectives.
Financial Planning: A CFP can help create a comprehensive financial plan considering your income, expenses, goals, and risk tolerance.
Final Thoughts
Your current investment strategy demonstrates a commitment to long-term wealth creation and financial security. To optimize your portfolio for your future goal of increasing your monthly investment to ?1.50 lakh, consider reviewing the performance of your existing funds and making strategic adjustments. Seeking professional guidance from a Certified Financial Planner can provide valuable insights and ensure your investments are on track to meet your goals.

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  |7872 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2024

Asked by Anonymous - Apr 29, 2024Hindi
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I am 33 years and earn around 1Lakh per month. Below are my investments. I want to have a good retirement corpus before 50 or monthly income for 50k 1. Axis ELSS Tax Saver Fund - 15th Dec 2018 - 2500 PM - 1.23L invested till now - paused now as ELSS not needed 2. Tata Small Cap Fund - 28th Aug 2021 -2500PM - 72.49k invested till now 3. UTI Nifty 50 Index Fund - 10th Mar 2023 - 2500PM - 43.99k invested till now 4. Axis Bluechip Fund - 21st Aug 2019 - 2500 PM - 1.32L invested till now 5. Nippon India Growth Fund - 10th Apr 2023 - 2500 PM - 33.87k invested till now 6. Axis Small Cap Fund - 28th Aug 2021 - 2500 PM - 72.49k invested till now 7. Axis Nifty 100 Index Fund - 15th Mar 2024 - 420 PM - 1.8k invested till now 8. Zerodha Nifty LargeMidcap 250 Index Fund - 2221 Lumpsum 9. DSP ELSS Tax Saver Fund - 32.49k Lumpsum 10. Bank of India ELSS Tax Saver - 36.99k Lumpsum Apart from this i invest 50000 in NPS annually. PPF 1500 annually since 2018 have 2 Flats of approx 45lakh each and have a pending loan of 23lakh for one. kindly suggest.
Ans: Your diligent approach towards investing and financial planning at 33 sets a strong foundation for achieving your retirement goals. Let's analyze your current investments and outline a strategy to build a robust retirement corpus or secure a monthly income stream by age 50.

Assessing Investment Portfolio
Your diversified investment portfolio comprising Equity Linked Savings Schemes (ELSS), mutual funds, index funds, and other tax-saving instruments reflects a proactive approach towards wealth accumulation. Let's evaluate each component to optimize your retirement strategy.

Equity Investments: Building Long-Term Growth Potential
Equity-oriented funds such as Axis ELSS Tax Saver Fund, Tata Small Cap Fund, Axis Bluechip Fund, and others offer exposure to diversified market segments, aiming for capital appreciation over the long term. While these funds carry market risk, they historically outperform traditional investment avenues over extended periods.

Index Funds: Cost-Effective and Passive Growth
Index funds like UTI Nifty 50 Index Fund and Axis Nifty 100 Index Fund provide broad market exposure while minimizing expense ratios and active management fees. Their passive investment approach mirrors market performance, offering steady growth potential with lower volatility compared to actively managed funds.

Real Estate Holdings: Tangible Asset Accumulation
Owning two flats valued at approximately ?45 lakhs each provides tangible asset accumulation and potential rental income streams. However, considering the pending loan of ?23 lakhs, it's essential to evaluate the overall debt exposure and assess the feasibility of leveraging rental income towards loan repayment.

Supplementary Retirement Contributions: NPS and PPF
Your annual contributions of ?50,000 to NPS and regular investments in PPF demonstrate a disciplined savings approach towards retirement planning. Both NPS and PPF offer tax benefits and long-term wealth accumulation potential, complementing your equity and real estate investments.

Crafting Retirement Strategy
Optimize Equity Portfolio: Consider reviewing your equity portfolio to ensure alignment with your risk tolerance and long-term goals. Periodic rebalancing and diversification across market caps and sectors can mitigate risk and enhance returns.

Evaluate Real Estate Holdings: Assess the rental income potential of your flats and explore options to expedite loan repayment. Strategic debt management can unlock additional cash flows and bolster your retirement savings.

Maximize Tax-Efficient Investments: Leverage tax-saving instruments like ELSS, NPS, and PPF to optimize tax benefits while accelerating retirement savings. Regular contributions and systematic investment planning amplify wealth accumulation potential over time.

Monitor and Adjust: Regularly review your investment portfolio, track performance metrics, and adapt strategies based on changing market dynamics and personal circumstances. Seeking professional guidance can provide valuable insights and optimize investment decisions.

Conclusion
With a proactive approach and diversified investment strategy, achieving your retirement goals before age 50 is within reach. By leveraging equity, real estate, and tax-efficient savings avenues, coupled with prudent portfolio management and strategic debt optimization, you can pave the way towards a secure and fulfilling retirement.

Best Regards,

K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7872 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 15, 2024

Asked by Anonymous - Jul 15, 2024Hindi
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Good day Sir, I am 37 years old, I own a 2 bhk house in panvel and car which is debt free. Currently I do not have any ongoing loan. I am a seafarer , I sail for around 7 months on ships and 5 months on land, while on land I do not have any income. My salary package is 65 lakhs/year. My investments are as below. I wish to be invested in LIC for 15 years till the maturity date. LIC FAMILY PLAN - Investment started in Au2024 - with quaterly plan total of 57700/quater 1. LIC JEEVAN LABH 836 SELF 2. LIC JEEVAN LABH 836 WIFE 3.LIC JEEVAN TARUN -834 1ST CHILD 4. LIC JEEVAN TARUN - 834 2ND CHILD Above is for 15 years for self and wife and for children it is 20 years maturity date. Mutual funds - Planning to be invested only for 10 years. 1.HDFC LIFE SAMPOORN NIVESH-HEFC FLEXI CAP FUND , TAKEN FOR SLEF -INVESTING 2.0LAKHS/YEAR FOR 5 YEARS., INVESTMENT STARTED IN JAN 2024, WITH 5 YEARS LOCKIN PERIOD. 2. MAX LIFE NIFTY SMALLCAP QUALITY INDEX FUND. TAKEN FOR WIFE. INVESTED 2.0 LAKHS/ YEAR INVESTED IN JAN 2024 WITH 5 YEARS OF LOCKIN PERIOD. 3.SBI CONTRA FUND REGULAR GROWTH - LUMPSUM , INVESTED 50K IM DEC 2023. SIP's Planning to be invested for 10 to 15 years 1.Kotak small cap fund 2500/ month 2.axis bluecip fund 2500/ month 3.Edelwesis mid cap fund 2500/ month 4.Canara MF 2500/Month 5.ICICI Prudential INDIA opportunities fund 2500/ month 6.ICICI Prudential Blue chip fund 2000/month 7.Tata small cap fund 3000/ month 8 Tata ethical fund regular plan growth 5000/month.. 9.SBI large and midcap regular growth 800/ week 10.SBI small cap fund direct growth 10000/month 11.SBI Automative opportunities fund dire t plan growth 5000/ month. Sharemarket Parga parek 50k INR shares. Crypto- 1 lakhs investment. Request you to reveiw my investment, I am planning to have a corpus of 10 crore till i retire, which i will be planning till the age of 45 to 50 years. I have 2 son, current age are 7 years and 5 years. Also want to build a good corpus for there education. Also in next 2 years i will be planning to build emergency funds around 10 lakhs, and that i wish to park in liquid funds, so i will be able to get some minimum growth. I also have mediclaim of 40k per year for my family. Term plan for 2 cr. As per my retirment planning is the above investment enough to grow 10cr in next 13 years. Thanks and warm regards Ramiz
Ans: Hello Ramiz,

It's great to see your detailed investment strategy. You have made significant strides in planning for your future and your family. Your current investment portfolio is diverse and well-structured. Given your goal of accumulating a corpus of Rs 10 crore by the age of 50, let's review your investments to ensure they align with your objectives.

Current Investment Overview
Life Insurance Policies
You have invested in several LIC plans for yourself, your wife, and your children. While LIC policies provide financial security and maturity benefits, they often offer lower returns compared to other investment avenues.

Mutual Funds
Your mutual fund investments are a mix of equity and hybrid funds, with a focus on long-term growth. This is a good approach as equity mutual funds tend to provide higher returns over the long term.

Systematic Investment Plans (SIPs)
Your SIPs are spread across various fund categories, including small cap, mid cap, and blue chip funds. This diversification helps mitigate risk while aiming for significant returns.

Stock Market and Cryptocurrencies
Investing in the stock market and cryptocurrencies adds another layer of diversification. However, these investments come with higher volatility and risk.

Emergency Fund and Insurance
Planning to build an emergency fund of Rs 10 lakhs in liquid funds is wise. Your mediclaim policy and term plan ensure financial protection for your family.

Review and Recommendations
Life Insurance Policies
LIC policies are secure but may not offer the best returns for wealth creation. Considering the lock-in period and the lower returns, you might want to reassess these investments.

Consider Surrendering Policies: You could surrender some LIC policies and reinvest the proceeds into mutual funds or SIPs with higher growth potential. This can accelerate your corpus building.
Mutual Funds
Your mutual fund investments are generally well-chosen. However, let's focus on maximizing their potential.

Actively Managed Funds Over Index Funds: Actively managed funds have the potential to outperform the market, unlike index funds which mirror market performance. Your mutual funds should remain actively managed to benefit from professional expertise and potential higher returns.

Regular Plans Over Direct Funds: Regular plans offer access to professional advice through Certified Financial Planners (CFP), which can be beneficial for making informed decisions and navigating market complexities.

SIPs
Your SIP investments are well-diversified, which is excellent for balancing risk and return. Here are some additional thoughts:

Continue Diversification: Your SIPs in small cap, mid cap, and blue chip funds ensure a balanced risk profile. Continue this strategy to maintain growth and stability.

Review Performance Regularly: Keep an eye on the performance of your SIPs and make adjustments as needed. This ensures your investments stay aligned with market conditions and your goals.

Stock Market and Cryptocurrencies
While these are high-risk investments, they can yield high returns. Here's how to approach them:

Limit Exposure: Given their volatility, limit your exposure to stocks and cryptocurrencies to a small percentage of your overall portfolio. This will protect your capital while allowing for potential growth.

Stay Informed: Keep abreast of market trends and news related to your stock and crypto investments. This will help you make timely decisions and mitigate risks.

Emergency Fund
Building an emergency fund in liquid funds is a sound strategy. Liquid funds provide easy access to your money and offer some returns.

Regular Contributions: Make regular contributions to your emergency fund until you reach your Rs 10 lakhs goal. This disciplined approach ensures you are prepared for any financial contingencies.
Insurance
Your current insurance coverage seems adequate. The mediclaim policy and term plan provide necessary financial protection.

Review Coverage: Periodically review your insurance coverage to ensure it meets your family’s needs. Adjust the coverage if necessary to keep pace with inflation and changing life circumstances.
Planning for Children's Education
Building a corpus for your children's education is crucial. Here are some strategies:

Invest in Child-specific Plans: Consider child education plans that offer a mix of equity and debt. These plans are designed to provide significant returns over the long term and ensure funds are available when needed.

Regular Investments: Continue regular investments in SIPs and mutual funds. This will help grow the education corpus systematically.

Consider Education Loans: If required, education loans can supplement your savings and ensure your children receive the best education without financial strain.

Achieving the Rs 10 Crore Goal
To reach your goal of Rs 10 crore by the age of 50, focus on the following strategies:

Increase Investment Amounts
Boost SIP Contributions: Gradually increase your SIP contributions as your income grows. This can significantly enhance your corpus over time.
Optimize Portfolio Returns
High-growth Investments: Allocate a portion of your portfolio to high-growth investments like mid-cap and small-cap funds. These have the potential to offer higher returns.
Monitor and Rebalance
Regular Review: Conduct regular reviews of your investment portfolio. Rebalance it periodically to ensure it remains aligned with your goals and risk tolerance.
Tax Planning
Utilize Tax-saving Instruments: Invest in tax-saving instruments like ELSS (Equity Linked Savings Scheme) to reduce your tax liability and increase your effective returns.

Tax-efficient Withdrawals: Plan your withdrawals in a tax-efficient manner to maximize the amount available for your goals.

Final Insights
Your current investment strategy is robust and well-diversified. By making a few adjustments, you can optimize your portfolio to achieve your financial goals. Focus on high-growth investments, regularly review your portfolio, and ensure your insurance coverage is adequate. With disciplined investing and strategic planning, you are well on your way to achieving your Rs 10 crore target and securing your family’s future.

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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