Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Ramalingam

Ramalingam Kalirajan  |3763 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 26, 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 - Feb 29, 2024Hindi
Money

Hello, I am 43 Years old and earning in-hand 2.2+ lac per month, from this year I have started investment in MF SIP(60K/month), NPS(10% basic + 50k/yrs from past 5 yrs), PPF (12500/month from past 5 yrs), Emergency fund 3lac (FD), EPF(20+lac), No EMI(Debt free - hold 2 property), Term Plan (50 lac) + 1.5 CR (Corporates cover)-> have external plan for 1.5 CR more + minimum external medical insurance plan (Currently corporate medical plan of 15 lac available) Equity investment is 0. My monthly expense is around 50k. I have two kids 5 and 10 yrs old - need to plan for education and my retirement(at 60 age). I can invest more 80-90k/month, Risk capacity is high, please suggest. Requirement - Education 2 CR for (1 CR each Kid appx) and for retirement around 5 CR liquid cash.

Ans: It's wonderful that you have a solid financial foundation and a clear vision for your future. Let's review your current investments and suggest strategies to help you achieve your goals for your children's education and your retirement.

Current Financial Situation
Monthly Income and Expenses
In-hand Income: Rs. 2.2+ lakhs per month
Monthly Expenses: Rs. 50,000
Current Investments
Mutual Fund SIP: Rs. 60,000 per month (started this year)
NPS: 10% of basic salary + Rs. 50,000 annually (contributed for the past 5 years)
PPF: Rs. 12,500 per month (contributed for the past 5 years)
Emergency Fund: Rs. 3 lakhs (in Fixed Deposit)
EPF: Rs. 20+ lakhs
Term Plan: Rs. 50 lakhs + Rs. 1.5 crore (corporate cover) + additional Rs. 1.5 crore
Medical Insurance: Corporate plan of Rs. 15 lakhs + minimum external plan
Assets
Two Properties: Debt-free
Financial Goals
Children's Education: Rs. 2 crores (Rs. 1 crore for each child)
Retirement: Rs. 5 crores liquid cash by age 60
Investment Strategy
1. Enhance Equity Exposure
Given your high-risk capacity and long investment horizon, increasing your equity exposure is prudent. Equity investments can offer higher returns compared to other asset classes.

Increase SIP Amount: You can invest an additional Rs. 80,000-90,000 per month. This can be allocated to diversified equity mutual funds, mid-cap funds, and small-cap funds for higher growth potential.
2. Optimize Existing Investments
Mutual Fund SIPs: Continue your existing SIPs. Consider adding funds with a good track record and those that align with your risk appetite.
NPS: This is a good investment for retirement savings due to its tax benefits and long-term growth potential. Ensure your allocation is optimized between equity and debt within NPS.
PPF: Continue your contributions to PPF for tax-free returns and safety. However, PPF has a lower return compared to equities, so balance your investments accordingly.
3. Diversify Investments
Diversification helps manage risk and capture opportunities across different market segments.

Equity Funds: Increase investments in equity mutual funds. Consider large-cap, mid-cap, and small-cap funds for a balanced growth portfolio.
Debt Funds: To balance the portfolio, consider debt mutual funds for stability and predictable returns.
Gold: Small allocation to Sovereign Gold Bonds (SGBs) can act as a hedge against inflation and market volatility.
Education Planning for Children
1. Systematic Investment Plan (SIP) for Education
Start dedicated SIPs in equity mutual funds targeted for your children's education. This will help in accumulating the required corpus systematically over time.

2. Child Plans
Consider investing in child-specific mutual funds or ULIPs that offer long-term growth and benefits tied to education milestones.

Retirement Planning
1. Retirement Corpus Calculation
With a target of Rs. 5 crores by age 60, let's ensure your investments align to meet this goal. A mix of equity and debt will provide growth and stability.

2. Retirement-Specific Funds
Consider investing in retirement-focused mutual funds and increasing your NPS contributions. These funds are designed to grow your savings efficiently over the long term.

3. Review and Rebalance Portfolio
Regularly review and rebalance your portfolio to align with changing market conditions and life stages. This will help in maintaining the desired asset allocation.

Risk Management
1. Adequate Insurance Cover
You already have substantial term insurance and health insurance coverage. Ensure they are sufficient to cover any unforeseen circumstances.

2. Emergency Fund
Maintain or slightly increase your emergency fund to cover 6-12 months of expenses. This provides a safety net for unexpected events.

Consultation with a Certified Financial Planner (CFP)
1. Personalized Financial Advice
A Certified Financial Planner can offer personalized advice, taking into account your specific financial situation, goals, and risk tolerance.

2. Expert Management
CFPs help in managing your investments effectively, optimizing returns while minimizing risks.

3. Comprehensive Planning
CFPs can assist with comprehensive financial planning, including tax planning, estate planning, and more, ensuring all aspects of your financial health are covered.

Example Investment Plan
Here’s a simplified example of how you might allocate your additional Rs. 80,000-90,000 monthly investment:

Equity Mutual Funds: Rs. 50,000 in diversified large-cap, mid-cap, and small-cap funds.
Debt Mutual Funds: Rs. 20,000 for stability and income generation.
Gold/SGB: Rs. 10,000 for diversification and inflation hedge.
Regular Monitoring and Adjustments
1. Annual Review
Conduct an annual review of your investments and financial goals. Adjust your SIP amounts and asset allocation as needed.

2. Stay Informed
Keep yourself informed about market trends and economic changes. Staying updated will help in making informed investment decisions.

Conclusion
Your current investments and financial strategies are commendable and align well with your goals. By increasing your equity exposure, optimizing existing investments, and consulting a Certified Financial Planner, you can confidently work towards securing your children’s education and a comfortable retirement.

Your disciplined approach and willingness to invest more monthly will significantly enhance your financial security. Continue to monitor and adjust your investments regularly to stay on track.

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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |3763 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 08, 2024

Asked by Anonymous - Apr 08, 2024Hindi
Listen
Money
Dear Sir, My inhand salary is approx 1 Lac per month. My wife's salary in hand is 60k per month. We have a kid of 1 year now. Our goal is to create a corpus amount of 4Crores for Childs education and well being. Current investments are 1. Equities-20 Lacs, Mutual Funds Quant, parikh, sbi, 5 Lacs total. Ppf 10 Lacs, Nps 2 Lacs, My requirements are 1. Need amount of 4 Cr at 2040 2. Currently I need best Term plan to invest in with cover of 3Cr 3. Need to know best health insurance for any medical emergency with family cover of 25Lacs. 4. Need to Buy a Home of 1.5 Cr 2bhk for which I will be going for Home loan of minimum 60Lacs. 5. Risk appetite medium to high
Ans: Given your financial goals and risk appetite, here are some recommendations:

Investments:

Continue investing in equity through mutual funds for long-term wealth creation.
Consider increasing your equity exposure gradually, given your high risk tolerance.
Regularly review and rebalance your investment portfolio to ensure alignment with your goals and risk tolerance.
Term Insurance:

Look for reputable insurance providers offering term plans with coverage of at least 3 Crores.
Compare premiums, features, and claim settlement ratios before making a decision.
Consider opting for a policy with a rider for critical illness coverage for added protection.
Health Insurance:

Choose a comprehensive family health insurance plan with a coverage of 25 Lakhs.
Look for plans that offer coverage for hospitalization, pre-existing conditions, day care procedures, and maternity benefits.
Consider factors such as network hospitals, claim settlement process, and premium affordability.
Home Purchase:

Since you plan to buy a home worth 1.5 Crores and avail a home loan, ensure that the EMIs are comfortably manageable within your monthly budget.
Compare home loan offers from various banks and financial institutions to get the best interest rates and terms.
Factor in additional costs such as registration fees, stamp duty, and maintenance expenses while budgeting for the purchase.
Financial Planning:

Consult with a certified financial planner to create a comprehensive financial plan tailored to your specific goals, risk tolerance, and financial situation.
Regularly review your financial plan and make adjustments as needed based on changes in your circumstances or market conditions.
By implementing these strategies and regularly monitoring your progress, you can work towards achieving your financial goals while managing risk effectively.

..Read more

Ramalingam

Ramalingam Kalirajan  |3763 Answers  |Ask -

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

Asked by Anonymous - Apr 16, 2024Hindi
Listen
Money
Hi, i am 42 years old 2 children 7 and 11 yrs each. earning currently 2 lakh net. I planning to create a retirement plan. I have done some investments but have never planned with specific goals so far. I intend to grow my money as much possible. And i am willing to take few risks, like i have started doing derivatives in options ( only nifty and I am not doing intra day). Please advice if my investment are reasonable and what are the other options i have to invest. Here are my assets and liability Land at current value : 70 lakhs Gold at current value : 21 lakhs Fixed Deposit : 10 lakhs PF balance : 11 lakhs Sukanya samridhi (annual1.5lakh) : 20 lakh Ppf for son ( annual 1.5 lakh): 14 lakh Direct equity ( 6 lakh invested) : current value : 17 lakhs Mutual Funds Franklin templeton tax saver growth( sip 4000) : 12 lakh Pp flexi cap growth(Sip 2000): 77 thousand Newly started Sip Quant small cap (sip 1000) Edelweiss momemtum (SIP) Liability ( car loan) : 20 lakhs
Ans: Given your age, income, and willingness to take risks, you have a decent mix of assets, but there are areas to focus on for a balanced retirement plan:

Assets:
Your assets are well-diversified with real estate, gold, fixed deposits, and various investment instruments like PF, Sukanya Samriddhi, PPF, direct equity, and mutual funds. However, your direct equity and derivatives trading can be volatile; ensure they align with your risk appetite.

Liabilities:
The car loan is a liability that can impact your monthly cash flow. Consider paying it off sooner to reduce interest costs and free up monthly income.

Suggestions:

Increase Equity Exposure: As you're willing to take risks, consider increasing exposure to equity mutual funds and direct equity investments.

Review Derivatives Trading: Be cautious with options trading due to its speculative nature. Ensure it doesn't dominate your portfolio.

Emergency Fund: Build a separate emergency fund to cover 6-12 months of expenses.

Health and Life Insurance: Ensure you have adequate health and life insurance coverage to protect your family's financial future.

Retirement Corpus: Calculate the required corpus for retirement based on your desired lifestyle post-retirement. Use a retirement calculator to estimate the monthly contributions needed to achieve this goal.

Diversify Investments: Explore other investment avenues like debt funds, international funds, to further diversify your portfolio and manage risks better.

..Read more

Ramalingam

Ramalingam Kalirajan  |3763 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

Listen
Money
Hello sir, Myself Prakash, age 31. I am a salaried person (married) working in private sector and my in hand salary is 50k. I have joint bank loan of 33L for 20 years for our house jointly by three of us (brothers) in which I am paying 9-9.5k per month (4 yrs already passed). My monthly expenses are approx 35k. I have a Emergency Corpus of 1.5L. I have a term insurance policy of 1 cr with a premium of 1.7k to be paid till 2032. I have health insurance also for my family with premium of 1.5k We also have covered our parents in separate health policy of premium 40-42k per year split equally between three of us. Pls suggest investment for my below mentioned goals. A. Short term goal 1. Small Car after 6 yrs of approx 7-8L 2. Own house after 15 years of approx 35-40L B. Long term goal 1. Child education fund after 17 yrs of 15L 2. Child marriage fund after 24 yrs of 25 L 3. Retirement fund after 24 yrs which would give me monthly 50k. Pls advise.
Ans: Dear Prakash,

It's great to see your proactive approach towards financial planning, especially with such diverse goals. Let's outline a comprehensive investment strategy to help you achieve your short and long-term objectives.

Your dedication to securing your family's future through meticulous financial planning is truly commendable and sets a strong example for responsible wealth management.

Short-Term Goals
Small Car Purchase (6 Years):
Savings Approach:
Allocate a portion of your monthly savings towards a dedicated fund for the small car purchase. Aim to save at least 7-8 lakhs over the next 6 years.
Own House (15 Years):
Investment Strategy:
Consider long-term investment options such as mutual funds or Public Provident Fund (PPF) to accumulate the required down payment for your future house. Aim for a corpus of 35-40 lakhs in 15 years.
Long-Term Goals
Child Education Fund (17 Years):
Systematic Investment Plan (SIP):
Start a SIP in equity mutual funds or balanced funds to build a corpus of 15 lakhs for your child's education over the next 17 years. Opt for a diversified portfolio to manage risk.
Child Marriage Fund (24 Years):
Strategic Investing:
Begin investing in equity-oriented instruments or a combination of equity and debt to accumulate 25 lakhs for your child's marriage expenses over 24 years. Review and adjust your investment portfolio periodically.
Retirement Fund (24 Years):
Retirement Planning:
To generate a monthly income of 50,000 post-retirement, focus on building a substantial retirement corpus through a mix of equity, debt, and other income-generating assets.
Diversified Portfolio:
Invest systematically in retirement-oriented mutual funds, National Pension System (NPS), and other retirement-focused investment avenues. Ensure a balanced allocation to minimize risk and maximize returns.
Risk Management and Insurance
Term Insurance:

Your existing term insurance coverage of 1 crore provides essential financial protection for your family. Continue paying premiums regularly to maintain coverage.
Health Insurance:

Maintain your health insurance coverage for your family and parents to safeguard against unforeseen medical expenses. Consider reviewing your policy periodically to ensure adequate coverage.
Conclusion
By adopting a disciplined approach to saving and investing, you can effectively achieve your short and long-term financial goals. Remember to periodically reassess your financial plan and make necessary adjustments to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Nayagam P

Nayagam P P  |417 Answers  |Ask -

Career Counsellor - Answered on Jun 17, 2024

Listen
Career
Dear sir Your answer was very helpful We are residing in Chennai and he is only son ...could you suggest few entrance exams for upper middle class Bits pilani how much it would cost He aims for computer science engineering
Ans: Priya Madam, I hope your son has joined Coaching Center for his JEE. As you prefer to have back-ups apart from JEE (NITs, IITS, GFTI & IIITs), here are some other suggested Entrance Exams along with JEE: (1) State Entrance Exams and / or Top-3 Private Colleges' Entrance Exams in your / nearby States (2) COMEDK (of Karnataka) is another better option as it is open to Students all over India. (3) IAT Exam for admission into IISER / IISc / IIT, if your son is interested in Research (4) PESSAT (of PES University) in Bengaluru (4) CUET for Central Universities all over India. (5) BITS. Please note, if you / your son prefer BITS-Computer Science, he should score minimum 330 / 360 for Pilani Campus, 295 / 360 for Goa Campus. 290/360 for Goa Campus. (6) It is advisable for him to appear in, minimum 5-Entrance Exams (instead of relying only on BITS). This will enable your son to have a lot of options to choose the best & most suitable College along with the Stream she prefers. Give importance to Location of the College Also. And, please AVOID forcing him to join the College / Stream which you prefer. His utmost importance to his interests. All The BEST for Son's Daughter's Bright Future, Madam. To know more on ‘ Careers | Education | Jobs | Resume Writing | Profile Building | Salary Negotiation Skills | Building Professional LinkedIn Profile | Choosing Right School Board (State | Matriculation | CBSE | ICSE |International Board) | Student Psychological Counselling | Exam Preparation Techniques (Board | Entrance & Competitive)| Strategies to Attempt Exams | Job Interview Skills | Skill Upgrading | Parenting & Child Upbringing Skills | Career Transition | Abroad Education | Education Loan (India | Abroad) | Scholarship (India | Abroad) | SOP Writing Tips’, please FOLLOW me in RediffGURU here.

Nayagam PP |
EduJob360 |
CERTIFIED Career Coach |
https://www.linkedin.com/in/edujob360/

...Read more

Nayagam P

Nayagam P P  |417 Answers  |Ask -

Career Counsellor - Answered on Jun 17, 2024

Listen
Career
Hello sir My son is in 12th class this year and preparing for JEE exam. Kindly suggest in addition to JEE any other entrance exam for engineering
Ans: Virendra Sir. I hope your son has joined Coaching Center for his JEE. As you prefer to have back-ups apart from JEE (NITs, IITS, GFTI & IIITs), here are some other suggested Entrance Exams along with JEE: (1) State Entrance Exams and / or Top-3 Private Colleges' Entrance Exams in your / nearby States (2) If you prefer to apply in South also, COMEDK (of Karnataka) is another better option as it is open to Students all over India. (3) IAT Exam for admission into IISER if your daughter is interested in Research (4) PESSAT (of PES University) in Bengaluru (4) CUET for Central Universities all over India. It is advisable for her to appear in, minimum 5-Entrance Exams. This will enable your daughter to have a lot of options to choose the best & most suitable College along with the Stream she prefers. Give importance to Location of the College Also. And, please AVOID forcing her to join the College / Stream which you prefer. All The BEST for your Daughter's Bright Future, Sir. To know more on ‘ Careers | Education | Jobs | Resume Writing | Profile Building | Salary Negotiation Skills | Building Professional LinkedIn Profile | Choosing Right School Board (State | Matriculation | CBSE | ICSE |International Board) | Student Psychological Counselling | Exam Preparation Techniques (Board | Entrance & Competitive)| Strategies to Attempt Exams | Job Interview Skills | Skill Upgrading | Parenting & Child Upbringing Skills | Career Transition | Abroad Education | Education Loan (India | Abroad) | Scholarship (India | Abroad) | SOP Writing Tips’, please FOLLOW me in RediffGURU here.

Nayagam PP |
EduJob360 |
CERTIFIED Career Coach |
https://www.linkedin.com/in/edujob360/

...Read more

Ramalingam

Ramalingam Kalirajan  |3763 Answers  |Ask -

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

Listen
Money
Is it safe to invest in gold through Gullak app
Ans: While Gullak offers a seemingly convenient way to invest in gold, there are some potential risks to consider:

Unregulated "Gold+" Program: The "Gold+" program's guaranteed 5% extra gold is a unique feature, but it's not entirely clear how Gullak achieves this. Since this program is unregulated, there's less oversight compared to SEBI-regulated mutual funds.
Counterparty Risk: Gullak mentions a 100% bank guarantee on your gold investment. However, the details of this guarantee and the specific bank involved are crucial. In case of any issue with the bank, there's a chance your investment might be impacted.
Limited Transparency: Compared to mutual funds, Gullak might not be as transparent about their fees and overall investment structure. This can make it difficult to fully understand the associated costs and risks.
Potential Hidden Costs: While Gullak might advertise low fees, there could be hidden costs associated with storage, insurance, or selling your gold holdings. Make sure you understand all the fees involved before investing.

Mutual Fund Gold:

Safety: Mutual funds are regulated by SEBI (Securities and Exchange Board of India) which adds a layer of security. Your investment represents units in the fund, not physical gold, but the underlying gold is typically stored in secure vaults.
Returns: Gold Mutual Funds invest in physical gold, reflecting the market price. You won't get a guaranteed bonus like with Gullak Gold+, but your returns are tied directly to the gold price's performance.
Liquidity: Gold Mutual Funds are generally quite liquid, allowing you to redeem your units on exchange platforms.
Here's why Mutual Fund Gold might be a better choice:

Transparency: Mutual Funds are more transparent in their holdings and fees compared to Gullak's "Gold+" program.
Flexibility: Mutual Funds offer various gold investment options with different expense ratios. You can choose a fund that suits your investment horizon and risk tolerance.
Market Exposure: Mutual Funds can offer exposure to gold along with diversification within the gold sector (e.g., international gold).

Why Consulting a Certified Financial Planner (CFP) is Wise:
A CFP is a financial professional who can provide personalized advice based on your specific financial situation and goals. Here's why consulting a CFP can be beneficial:

Risk Assessment: A CFP can help you assess your risk tolerance and determine if Gullak or Mutual Fund Gold is a suitable investment for you.
Portfolio Diversification: A CFP can advise you on how to incorporate gold into a diversified portfolio to manage risk and meet your long-term goals.
Understanding Gullak's "Gold+" Program: A CFP can help you analyze the details and potential risks associated with Gullak's "Gold+" program.
Comparison with Mutual Funds: A CFP can compare Gullak with various gold mutual fund options, considering factors like fees, expense ratios, and historical performance.
Remember: Financial planning is personal. Consulting a CFP can empower you to make informed investment decisions aligned with your unique circumstances.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Nayagam P

Nayagam P P  |417 Answers  |Ask -

Career Counsellor - Answered on Jun 17, 2024

Listen
Career
Sir I have taken admission in a private college with branch cse ..pls could you guide me what to do from 1st year..
Ans: Neel, Congratulations! Some important tips for you (1) Try to maintain a decent CGPA (preferably above 8.5) without any backlogs / arrears (2) Join co-curricular activities club, related to your domain & 2 extra curricular activities you are interested in (3) Keep getting advice from the Faculties for your Career Development (4) Start upgrading your skills on your / allied domains through NPTEL, Internshala, LinkedIn, Coursera etc. (5) Create a Professional Linked Profile & keep updating them every 3-months. (6) Connect to Professionals related to your domain, but avoid asking for any favour or jobs when you are in 4th year (7) Put job alerts in LinkedIn Profile, related to your domain, to keep knowing about the Job Description given by the companies & job market conditions (8) Have good friends around you who will help you always for your career growth and, in turn, you also help them (9) Never get demotivated by academic pressure (which is bound to happen in almost all Engineering Colleges) (10) Manage your time propery (11) Do Yoga or Meditation or any other Physical Exercises you are comfortable with, for 25-30 minutes daily (12) Above all, do relax sometimes. All The BEST for your Bright Future Neel. To know more on ‘ Careers | Education | Jobs | Resume Writing | Profile Building | Salary Negotiation Skills | Building Professional LinkedIn Profile | Choosing Right School Board (State | Matriculation | CBSE | ICSE |International Board) | Student Psychological Counselling | Exam Preparation Techniques (Board | Entrance & Competitive)| Strategies to Attempt Exams | Job Interview Skills | Skill Upgrading | Parenting & Child Upbringing Skills | Career Transition | Abroad Education | Education Loan (India | Abroad) | Scholarship (India | Abroad) | SOP Writing Tips’, please FOLLOW me in RediffGURU here.

Nayagam PP |
EduJob360 |
CERTIFIED Career Coach |
https://www.linkedin.com/in/edujob360/

...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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x