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

Ramalingam Kalirajan  |5108 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 13, 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 12, 2024Hindi

Hello Sir, I am a 43 yr old married female, I have just started earning Rs 36000 monthly after taxes. I want to invest this money for the future and don't want to touch it for around 5 yrs. My question: Where should I invest monthly where I get interest also? 2. There should not be a lock in period so that we can take this money whenever there is a requirement. I have limited knowledge on finance, need your guidance Regards,

Ans: Understanding Your Financial Goals
Congratulations on your new source of income! Investing Rs 36,000 monthly is a significant step toward a secure financial future. Let's explore investment options that align with your goals. We'll look for avenues that offer interest, have no lock-in period, and allow easy access to funds when needed.

The Importance of Liquidity
Liquidity refers to how easily an asset can be converted into cash without affecting its market price. For you, liquidity is crucial because you want to access your money anytime without penalties. This requirement will guide our investment choices.

Systematic Investment Plans (SIPs)
SIPs are a popular way to invest in mutual funds. By investing a fixed amount every month, you can benefit from rupee cost averaging. This means you buy more units when prices are low and fewer when prices are high. Over time, this can lead to better average purchase prices.

Advantages: Potential for higher returns compared to traditional savings accounts. Flexibility to withdraw funds anytime without penalties.

Disadvantages: Market risks can affect returns. Requires understanding of mutual fund performance.

Debt Mutual Funds
Debt mutual funds invest in fixed-income instruments like government securities, corporate bonds, and money market instruments. They are less volatile than equity funds, making them a safer option for conservative investors.

Advantages: Lower risk compared to equity funds. Better returns than savings accounts or fixed deposits.

Disadvantages: Interest rate risk and credit risk. Returns are not guaranteed and can fluctuate.

Recurring Deposits (RDs)
Recurring deposits allow you to invest a fixed amount every month in a bank account for a predetermined period. They offer guaranteed returns at a fixed interest rate.

Advantages: Guaranteed returns with no risk. Suitable for conservative investors looking for stability.

Disadvantages: Interest rates may be lower than inflation rates. Limited flexibility in withdrawing funds early.

Public Provident Fund (PPF)
While PPFs typically have a lock-in period, they offer tax benefits and guaranteed returns. Partial withdrawals are allowed after a certain period, providing some liquidity.

Advantages: Tax benefits under Section 80C. Safe investment with government backing.

Disadvantages: Limited liquidity with lock-in periods. Lower returns compared to some market-linked investments.

Liquid Funds
Liquid funds are a type of mutual fund that invests in short-term money market instruments. They offer high liquidity and are suitable for parking surplus funds for short durations.

Advantages: High liquidity with no lock-in period. Better returns than savings accounts.

Disadvantages: Returns can be slightly volatile. Not suitable for long-term growth.

Ultra-Short Duration Funds
These funds invest in instruments with slightly longer maturity than liquid funds but still maintain high liquidity. They offer better returns than liquid funds with minimal interest rate risk.

Advantages: Higher returns than liquid funds. High liquidity with minimal risks.

Disadvantages: Slightly higher risk than liquid funds. Returns can fluctuate.

Benefits of Actively Managed Funds
Actively managed funds are overseen by professional fund managers who make investment decisions to outperform the market. These funds can offer better returns than passive index funds, which simply track a market index.

Advantages: Potential for higher returns through active management. Professional expertise in managing investments.

Disadvantages: Higher management fees compared to index funds. No guaranteed outperformance.

Evaluating Your Risk Tolerance
Understanding your risk tolerance is crucial before choosing an investment option. Since you have limited knowledge in finance, starting with low to moderate-risk investments might be more comfortable. Over time, as you become more familiar with investment concepts, you can gradually increase your risk exposure for potentially higher returns.

Emergency Fund Allocation
It's essential to set aside a portion of your monthly income as an emergency fund. This fund should cover at least 3 to 6 months of your expenses. It ensures you have immediate access to cash in case of unforeseen circumstances, without having to dip into your investments.

Automating Your Investments
Automating your monthly investments can help ensure consistency and discipline. Many banks and financial institutions offer automatic transfer services, which can regularly move funds from your salary account to your chosen investment options.

Monitoring and Rebalancing
Regularly monitoring your investments is key to staying on track with your financial goals. Periodic rebalancing ensures your investment portfolio remains aligned with your risk tolerance and market conditions. It involves adjusting your investment allocations to maintain your desired risk level.

Seeking Professional Guidance
While the information provided here aims to guide you in making informed decisions, consulting with a Certified Financial Planner (CFP) can offer personalized advice tailored to your specific needs and goals. A CFP can help you design a comprehensive financial plan and recommend suitable investment options.

Avoiding Common Pitfalls
Here are some common mistakes to avoid while investing:

Lack of Diversification: Spreading investments across various asset classes can mitigate risks.

Chasing High Returns: High returns often come with high risks. Focus on consistent and stable returns.

Ignoring Inflation: Ensure your investment returns outpace inflation to maintain purchasing power.

Not Reviewing Regularly: Regular reviews help adapt your investment strategy to changing goals and market conditions.

Tax Implications
Understanding the tax implications of your investments is crucial. Different investment options have different tax treatments. For instance, interest earned on recurring deposits is fully taxable, while long-term capital gains from equity mutual funds enjoy favorable tax treatment. Tax-efficient investments can enhance your overall returns.

Safety and Security
When choosing investment options, prioritize safety and security. Invest in regulated financial products and institutions to safeguard your capital. Avoid schemes that promise unusually high returns with little or no risk, as they are often too good to be true.

Financial Education
Enhancing your financial knowledge can empower you to make better investment decisions. Numerous online resources, courses, and workshops can help you understand basic and advanced financial concepts. Becoming financially literate will benefit you in the long run.

Final Insights
Investing Rs 36,000 monthly is a commendable step toward securing your financial future. Prioritize liquidity, diversify your investments, and seek professional advice to optimize your returns. Regularly review and adjust your investments to stay aligned with your goals. By making informed decisions and staying disciplined, you can achieve financial stability and growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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.

You may like to see similar questions and answers below


Ramalingam Kalirajan  |5108 Answers  |Ask -

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

Asked by Anonymous - Jan 25, 2024Hindi
Hello Sir I am 22 year old and I can invest around Rs3000 per month with better job opportunity and time period I can increase my investment amount, I want to know where I can invest my savings every month for better returns, I can invest for next 30-35 years regularly for sure. Kindly guide me where and how to invest .
Ans: That's a fantastic start! Thinking about long-term investments at your age is a smart decision. Here are some options for where you can invest your Rs.3000 per month, considering a 30-35 year investment horizon:

Systematic Investment Plan (SIP) in Mutual Funds:

This is a popular option for regular investment with rupee-cost averaging. You invest a fixed amount each month, and the units are purchased based on the prevailing Net Asset Value (NAV).
Disciplined Investing: Encourages regular savings and avoids the need to time the market.
Rupee-Cost Averaging: Purchases more units when the NAV is low and fewer units when it's high, potentially balancing the overall cost per unit.
Long-Term Growth: Equity mutual funds have the potential for significant growth over the long term (typically 10+ years).
Investment Options:
Large-cap Funds: Invest in stocks of well-established companies with a proven track record.
Multi-cap Funds: Invest across companies of different market capitalizations (large, mid, and small).
Consider a mix of these based on your risk tolerance.
Here's how to get started with SIP in Mutual Funds:

Choose a SEBI-registered Mutual Fund Company (AMC): Research and compare different AMCs based on their performance and fund offerings.
Select a Suitable Mutual Fund Scheme: Consider your risk tolerance and investment goals.
Open an Investment Account: You can open an account with the AMC directly or through a broker/distributor.
Start your SIP: Set up a recurring transfer of Rs.3000 per month to your chosen SIP.
Additional Tips:

Increase Investment as Income Grows: As your income increases, consider raising your SIP amount to reach your financial goals faster.
Stay Invested for Long Term: Market fluctuations are normal. Don't panic and redeem your investments during downturns. A long-term horizon allows time for the market to recover and potentially generate good returns.
Review and Rebalance: Periodically review your portfolio performance (at least annually) and rebalance if needed to maintain your desired asset allocation.
Other Options to Consider:

Public Provident Fund (PPF): A government-backed scheme offering guaranteed returns and tax benefits. However, PPF has lower liquidity compared to mutual funds.
Employee Provident Fund (EPF): If you're salaried, your employer likely contributes to your EPF. This offers good long-term returns and tax benefits.

I can't provide specific financial advice. Consulting a Certified Financial Planner (CFP) can be helpful, especially for a personalized investment plan considering your risk tolerance and goals.
Start with your research! Read about different investment options, mutual funds, and SIPs before making any decisions.
By starting early, investing regularly, and staying disciplined, you can build a significant corpus for your future over the next 30-35 years.

..Read more


Ramalingam Kalirajan  |5108 Answers  |Ask -

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

Asked by Anonymous - May 14, 2024Hindi
Hello My Age is 23 and currently earning a income of 40000 per month where should I invest pls describe the amount of investment allotment also in different sectors like MF, INSURANCE, ETC. I would like to invest monthly around 20000.
Ans: Congratulations on taking the initiative to invest at a young age! Let's explore a diversified investment strategy tailored to your financial situation and goals.

Assessing Investment Allocation
Mutual Funds (MF):

Allocate a significant portion of your monthly investment towards mutual funds, considering their potential for long-term growth and diversification benefits.
Aim to invest around 60-70% of your monthly investment amount in mutual funds across various categories such as large-cap, mid-cap, and multi-cap funds.

While insurance is essential for financial protection, allocate a smaller portion of your investment towards insurance premiums.
Consider investing around 10-20% of your monthly investment amount in insurance policies such as term insurance for adequate coverage.
Emergency Fund:

Build an emergency fund equivalent to 3-6 months of living expenses to cover unexpected financial needs.
Allocate a portion of your monthly investment towards gradually building your emergency fund until it reaches the desired level.
Other Investments:

Explore other investment avenues such as fixed deposits, recurring deposits, or Public Provident Fund (PPF) for stable returns and tax benefits.
Allocate a small portion of your monthly investment, around 10-20%, towards these conservative investment options to ensure a balanced portfolio.
Advantages of Actively Managed Funds Over Index Funds
Actively managed mutual funds offer the expertise of professional fund managers who actively select and manage the fund's investments to outperform the market.
These funds have the flexibility to adapt to changing market conditions and capitalize on investment opportunities, potentially yielding higher returns.
Unlike index funds, which passively track a market index, actively managed funds can generate alpha through active portfolio management and security selection.
Considerations for Direct Fund Investment
While direct funds offer lower expense ratios compared to regular funds, they require active involvement in research, monitoring, and portfolio management.
Direct fund investors must possess the necessary knowledge and expertise to select suitable funds and manage their investment portfolio effectively.
Investing through a Certified Financial Planner (CFP) or Mutual Fund Distributor (MFD) provides access to professional guidance and personalized investment advice, enhancing the overall investment experience.
By following a disciplined investment approach and diversifying across various asset classes, you can build a robust investment portfolio that aligns with your financial goals and risk tolerance. Remember to review your investments periodically and make adjustments as needed to stay on track towards achieving your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |5108 Answers  |Ask -

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

Asked by Anonymous - Jun 19, 2024Hindi
Hello Sir, I work in an IT firm, my monthly in hand salary is 1.6lakh, i have monthly EMI of car loan as 9542/-, LIC : 25750, SIP :10k and other house expenses like grocery, petrol and other miscellaneous around 15k. Total money left after all expenses : 110000/- Please let me know how should i invest this remaining money for maximum gains in 5 years
Ans: Your monthly in-hand salary is Rs. 1.6 lakh. You have a car loan EMI of Rs. 9,542 and LIC premiums of Rs. 25,750. Your SIP investments are Rs. 10,000, and household expenses total around Rs. 15,000. After these expenses, you are left with Rs. 1,10,000.

Investment Strategy for Maximum Gains
Emergency Fund
Firstly, create an emergency fund. This should cover at least 6 months of expenses. This fund should be in a liquid form. Consider a high-interest savings account or a liquid mutual fund.

Mutual Funds
Actively Managed Funds
Actively managed funds are a good choice. These funds have professional managers. They aim to outperform the market. This can provide higher returns over 5 years.

Balanced Funds
Balanced funds are another option. These funds invest in both equity and debt. They provide stability and growth. This can help balance risk and returns.

Recurring Deposits
Recurring deposits (RDs) offer fixed returns. They are a safe investment. You can invest a fixed amount monthly. This is suitable for systematic saving.

Systematic Investment Plan (SIP)
You already have an SIP of Rs. 10,000. Consider increasing this amount. SIPs in mutual funds provide disciplined investment. They average out market volatility.

Public Provident Fund (PPF)
PPF is a government-backed savings scheme. It offers tax benefits and safe returns. Though it has a 15-year lock-in, partial withdrawals are allowed after 5 years.

National Savings Certificate (NSC)
NSC is a fixed income investment scheme. It is safe and offers decent returns. The maturity period is 5 years. It also provides tax benefits under Section 80C.

Fixed Deposits
Fixed deposits (FDs) offer guaranteed returns. They are safe and easy to manage. Senior citizens often get higher interest rates. Consider FDs for part of your savings.

Risk Assessment and Diversification
Risk Tolerance
Assess your risk tolerance. If you prefer low risk, opt for more debt instruments. If you are comfortable with risk, invest more in equities.

Diversify your investments. Spread your money across various instruments. This reduces risk and enhances returns. A mix of mutual funds, FDs, and government schemes can be effective.

Professional Guidance
Certified Financial Planner
Consider consulting a Certified Financial Planner. They can help create a customised investment plan. Their expertise ensures you make informed decisions. This can maximise your gains over 5 years.

Tax Planning
Section 80C
Investments like PPF, NSC, and ELSS qualify for deductions under Section 80C. This can help reduce your taxable income. Plan your investments to take full advantage of tax benefits.

Health Insurance
Consider taking health insurance if you don't have it. Premiums paid for health insurance qualify for deductions under Section 80D. This also provides financial protection in case of medical emergencies.

Monitoring and Review
Regular Review
Regularly review your investments. Ensure they align with your goals. Adjust your portfolio as needed. This helps in keeping your investments on track.

Market Trends
Keep an eye on market trends. Stay updated with financial news. This can help you make timely decisions. Adapting to market changes can enhance returns.

Final Insights
Investing Rs. 1,10,000 monthly can significantly grow your wealth. Start with creating an emergency fund. Diversify your investments in mutual funds, RDs, PPF, and FDs. Assess your risk tolerance and plan accordingly. Consult a Certified Financial Planner for a tailored strategy. Regularly review and adjust your investments to stay aligned with your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more

Latest Questions

Chocko Valliappa  |356 Answers  |Ask -

Tech Entrepreneur, Educationist - Answered on Jul 22, 2024

Asked by Anonymous - Jul 21, 2024Hindi
A doctorate from IIT Bombay in Metallurgy and masters from NIT in Manufacturing with 5 years of experience including 2 years in academics and currently working from past 3 years in industry where I work mostly on finite element analyst of forging and bulk extrusion process and New product development as manager heading a team of 5 people. I have working knowledge of 3-4 FE software related to metal forming domain along with ANSYS STRUCTURAL. Despite that I am not getting any interview calls as I am currently looking for a job switch and have put up my profile both on NAUKRI AND LINKEDIN. Some calls are coming to me but that are all irrelevant profiles in which my expertise is not there. I have been trying for the past 6 months but have not got any positive response. Despite such a highly educated person from premier institute and not getting any response is highly depressing. Could you suggest how to apply and where to apply and any other website where I shall make my profile to get a positive response ? Thanks. .................
Ans: You have accomplished academic background and work in a very specialised area. You may have to expand your job search to a broader field of Metalurgy, Product Managment, Operations and not be limited to Finite Element analysis. Think through again and look for companies active in the field of metallury and users and producers of Steel, Metals. You may also look at academics. Use your academic contacts in the two IIT--IIT B and NIT, previous employers and seek their help in connecting you with possible openings. You also need to give yourself more time and be optimistic.

...Read more


Ramalingam Kalirajan  |5108 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 22, 2024

Asked by Anonymous - Jul 21, 2024Hindi
Meri umar 46 sal hai 60ke bad 2lak rs mahine ka inkam chahta hun sip me ktane investment karu
Ans: Planning for Post-Retirement Income
You are 46 years old and want a monthly income of Rs 2 lakh after 60. Let's create a strategy to achieve this goal through SIP investments.

Assessing Your Current Situation
Current Age: 46 years
Retirement Age: 60 years
Target Monthly Income Post-Retirement: Rs 2 lakh
Time Horizon: 14 years
Estimating Required Corpus
To generate a monthly income of Rs 2 lakh, you need a substantial retirement corpus. Let's estimate the corpus required using a safe withdrawal rate of 4%.

Annual Income Required: Rs 2 lakh x 12 = Rs 24 lakh
Corpus Needed: Rs 24 lakh / 4% = Rs 6 crore
SIP Investment Strategy
To accumulate Rs 6 crore in 14 years, consistent SIP investments are crucial. Let's determine the monthly SIP amount needed.

Calculate Monthly SIP Amount
The calculation involves assumptions about expected returns. Assume an annual return of 12% from equity mutual funds.

Using an online SIP calculator:

Corpus Required: Rs 6 crore
Time Horizon: 14 years
Expected Annual Return: 12%
The estimated monthly SIP amount needed is around Rs 1 lakh.

Recommendations for SIP Investments
Diversify Your Portfolio
Equity Funds: Focus on diversified equity funds for higher growth.
Balanced Funds: Include balanced funds for stability and moderate returns.
Debt Funds: Allocate a portion to debt funds for lower risk.
Regularly Review and Adjust
Monitor Performance: Regularly review your portfolio's performance.
Adjust Allocations: Adjust allocations based on market conditions and goals.
Gradually Increase SIP Amount
Step-Up SIP: Increase your SIP amount annually to boost corpus growth.
Bonus or Increment: Use bonuses or salary increments to increase investments.
Final Insights
To achieve a post-retirement income of Rs 2 lakh per month, you need to accumulate around Rs 6 crore.

Start with a monthly SIP of around Rs 1 lakh.
Diversify your investments across equity, balanced, and debt funds.
Regularly review and adjust your portfolio.
Gradually increase your SIP amount over time.
By following this strategy, you can achieve your retirement income goal. Consult a Certified Financial Planner to tailor the plan to your specific needs and circumstances.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner


...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.


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

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