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Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Apr 30, 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 - Dec 21, 2023Hindi

Money

Hello Sir, Good day. I am 42 and planning to start SIP for 60k appx where as I can take risk. I don't have any MF with me currently. As per analysis i have sorted below couple of MF please suggest if those looks good or Suggest alternative options - 10k - Parag Parikh Flexi-cap fund (Growth)/ Samco Flexi Cap Fund 10k - ICICI prudential bluechip fund (growth) 10k -SBI smallcap fund (growth) 10k - HDFC Index Fund – Sensex plan Not sure on which fund I can add 20k.. or should I make 15 k instead of 10 k each on above MF.

Ans: As you embark on your investment journey, your proactive approach towards SIPs reflects a commendable commitment to financial growth. By allocating your funds across diversified mutual funds, you're laying a solid foundation for long-term wealth creation. Remember, investing is a marathon, not a sprint. Stay patient, disciplined, and trust in the process. Consulting a Certified Financial Planner can offer valuable insights and guidance along the way, ensuring your investments align with your aspirations and risk tolerance. Embrace this journey with confidence, knowing that every step forward brings you closer to achieving your financial goals.

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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Question by Bappa - Jan 06, 2021Hindi

Money

I am 47 years old. I have 8 MF ongoing SIPs, which started 3-5 years before, kindly review and advise details as below. further in addition to this if i want to invest lump-sum amount may be 2 Lakhs, which better option you suggest. SBI Focused Equity Fund Reg Growth: Rs 1000.00 SBI Blue Chip Fund Reg Plan-G: Rs 1000.00 SBI BFS Fund- Reg Plan Growth: Rs 1000 Aditya Birla SL Frontline Equity Fund(G): Rs 2000.00 Franklin India Prima Fund(G): Rs 2000.00 Aditya Birla SL Dynamic Bond Fund-Reg(G): Rs 1000.00 Franklin India Bluechip Fund(G): Rs 2000.00 HDFC Hybrid Equity Fund(G): Rs 2000.00

Ans: Axis Bluechip Fund – Growth is better Large cap option; sectoral fund can be avoided due to concentration risk; Canara Robeco Equity Hybrid Fund - Growth is better Aggressive Hybrid and Axis Mid Cap fund – Growth is better Mid cap Fund

Rest are fine.

Ulhas Joshi |255 Answers |Ask -Follow

Mutual Fund Expert - Answered on Jul 05, 2023

Question by Ravi - Jun 06, 2023Hindi

Money

Hello Sir, I am 37 yrs old. Currently I am doing SIPs in following schemes. 1. HDFC Midcap opportunity fund 3000/- 2. DSP Tax saver fund 3000/- 3. Tata small cap fund. 4000/- 4. Kotak Flexi cap fund 2000/- I want to start SIP of more 8000 in 2 MF, can you pls suggest which category MF should I buy? Also do i need to change existing MF scheme? I don't need Tax saver fund but it gave me around 14% return so I kept it, but ready to switch also.

Ans: Hello Ravi and thanks for writing to me.

You can consider starting monthly SIP's in the Funds mentioned below:
1-Kotak Small Cap Fund- Rs.4,000
2-SBI Magnum Midcap Fund-Rs.4,000

Vivek Lala |233 Answers |Ask -Follow

Tax, MF Expert - Answered on Jul 03, 2023

Question by Pradeep - Jul 01, 2023Hindi

Money

Hello sir I'm 53 year old and currently I have invested on below funds 5000/PM and paln to have corpus of INR 2cr by 60 years. 1. Quant active fund-G 2. Quant mid cap fund -G 3. BOI AXa small cap fund 4. Canara Robo small cap fund 5. Mahindra manulife mid cap 6. Quant small cap fund 7. PGIM India flexi cap fund 8. Quant felixi cap fund 20K/Month 1. Parag Parikh flexi cap fund 2. PGMI mid cap opportunity fund 3. Quant active fund Growth 4. Woc felixi cap fund Pls advise if these are good SIP or I should exit some or start a new SIP..u may also guide any good MF for SIP or one time investment.. Regards RPJ

Ans: For you to get to 2crs in 7yrs, assuming 12% xirr, your sip amount needs to be Rs1.5L
Generally i avoid flexi cap funds, instead you can go for the following categories for your sip:
Small cap
Mid cap
Large and mid
Thematic - Consumption
Multicap
Focused

For Lumpsum you can select the same funds where you are having your sip's and the STP can be 15-20 weeks starting today.

Please note that these suggestions are based on your stated goals and the information you provided. It is always a good idea to consult with a financial advisor in person to better understand your risk tolerance, time horizon, and specific financial goals.

Moneywize |108 Answers |Ask -Follow

Financial Planner - Answered on Apr 05, 2024

Asked by Anonymous - Apr 05, 2024Hindi

Money

Good day, Sir. I am 32 and planning to start SIP for 30k maximum because that is my risk apetite. I don't have any MFs with me currently. As per my research I have zeroed in on some MFs. Please suggest if these are okay or shall I go for some other funds. a. Rs 10k in Parag Parikh Flexi-cap fund (Growth)/ Samco Flexi Cap Fund b. Rs 10k in ICICI Prudential Bluechip Fund (Growth) and c. Rs 10k in SBI Smallcap Fund (Growth). Could you please share your opinion?

Ans: The funds you shortlisted seem like a good starting point for a diversified equity mutual fund portfolio with a moderate risk appetite. Here's a breakdown of why:

• Parag Parikh Flexi-cap fund (Growth) / Samco Flexi Cap Fund: These are Flexi-cap funds that invest across large, mid, and small-cap companies. This allows for diversification and the potential for growth across market capitalisations. However, a key difference is Parag Parikh Flexi-Cap Fund has a proven track record with a longer history and superior returns compared to Samco Flexi Cap Fund which is a new fund.
• ICICI Prudential Bluechip Fund (Growth): This is a large-cap fund that focuses on established companies. Large-cap funds typically offer lower volatility compared to flexi-cap funds.
• SBI Small Cap Fund (Growth): This is a small-cap fund that invests in smaller companies with high growth potential. Small-cap funds generally offer higher potential returns but also come with higher risk.

Here are some things to consider:

• Risk profile: Your chosen allocation (Flexi-cap + Bluechip + Small-cap) leans moderately aggressive. Consider if this aligns with your 30k SIP risk tolerance. You can adjust the weightage between Flexi-cap and Bluechip depending on your risk appetite.
• New fund vs Established fund: Parag Parikh Flexi-cap has a strong track record while Samco Flexi Cap Fund is new. This might be a factor to consider since past performance is an indicator of potential future performance.

Overall, your selection is a good starting point. Here are some suggestions:

• Stick with Parag Parikh Flexi-cap if you choose the Flexi-cap option.
• Consider if the weightage between Flexi-cap, Bluechip, and Small-cap fits your risk profile. You can tweak it to be more conservative by increasing the Bluechip allocation or more aggressive by increasing Flexi-cap or Small-cap allocation.

Disclaimer: I am not a financial advisor and this is not financial advice. Please consult a registered advisor for personalised recommendations based on your complete financial picture.

Ramalingam Kalirajan |2798 Answers |Ask -Follow

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

Asked by Anonymous - Apr 07, 2024Hindi

Money

Hello Sir, I want to invest 25k monthly in SIP with retirement and child education as investment goal . I am also planning to step up the SIP amount every year after I get the increment. Could you please tell me in which MF fund should I invest and how much should I increase the SIP amount very year. Target corpus ( investment horizon - 15 years) Retirement (least amount ) - 4-5 Cr Child Education - 4-5 Cr My wife is also working and can invest 15k more in addition to above amount.

Ans: Given your investment goals and time horizon, here's a suggested investment plan:

Retirement Corpus:

Allocate a significant portion of your SIP amount to large-cap, multi-cap, and diversified equity funds.
Large-cap funds offer stability, while multi-cap and diversified equity funds provide growth potential.
Gradually increase SIP amounts annually to keep pace with inflation and salary increments.
Child Education Corpus:

Diversify your SIPs across large-cap, multi-cap, balanced, and thematic funds.
Large-cap funds offer stability, while multi-cap and balanced funds provide growth potential with lower volatility.
Thematic funds can be considered for specific sectors or themes with growth potential, but exercise caution due to higher risk.
Combined SIP Allocation:

Allocate SIP investments based on your risk tolerance, investment horizon, and financial goals.
Balance the allocation between retirement and child education based on priority and time horizon.
Gradually increase SIP amounts annually to align with your financial goals and growing expenses.
Review and Monitoring:

Regularly review the performance of your SIP investments and adjust asset allocation if necessary.
Seek advice from a financial advisor to periodically assess your progress and make any required adjustments to stay on track with your goals.
By following a diversified investment approach and gradually increasing your SIP amounts over time, you can work towards building a substantial corpus for both your retirement and your child's education.

Latest Questions

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Asked by Anonymous - May 20, 2024Hindi

Money

Hello, I am a Muslim wanting to Invest according to Shariah principle. I have a net Income of about 2 lakhs INR/month. I am 37 and looking to create a corpus of 1.5 crore by the time I am 50.. As a practicing Muslim, I want to ensure the investment is Shariah compliant. I have a strength of investing upto 50k/month and this may grow in the future too! kindly suggest what would be my best options.

Ans: Crafting a Shariah-Compliant Investment Strategy for Your Financial Objectives
In your pursuit of building a corpus of 1.5 crore by the age of 50, aligned with Shariah principles, we'll outline a tailored investment strategy leveraging various Shariah-compliant avenues and prudent financial planning.

Understanding Shariah-Compliant Investing
Core Principles of Shariah Compliance
Shariah-compliant investing emphasizes ethical and responsible investment practices, steering clear of businesses engaged in activities incompatible with Islamic teachings, such as alcohol, gambling, and interest-based transactions. It prioritizes transparency, fairness, and social responsibility.

Importance of Ethical Investing
Adhering to Shariah principles not only ensures compliance with religious beliefs but also promotes socially responsible investment practices, fostering financial growth with integrity. By investing ethically, you contribute to sustainable development and positive social impact.

Shariah-Compliant Investment Options
Islamic Mutual Funds
Invest in Islamic mutual funds that adhere to Shariah guidelines, allocating funds to companies compliant with Islamic principles, thus offering a diversified portfolio of Shariah-compliant stocks. These funds undergo rigorous screening processes to ensure adherence to Shariah principles.

Shariah-Compliant Equities
Diversify your investment portfolio with Shariah-compliant equities, selecting stocks of companies operating in permissible sectors, screened based on Shariah criteria. These criteria typically exclude businesses involved in industries such as alcohol, tobacco, and gambling.

Real Estate Investment Trusts (REITs)
Consider investing in Shariah-compliant REITs, which provide exposure to real estate assets while adhering to Islamic finance principles, offering potential rental income and capital appreciation. Shariah-compliant REITs invest in properties and assets that comply with Shariah guidelines.

Exchange-Traded Funds (ETFs)
Explore Shariah-compliant ETFs that track indices comprised of Shariah-compliant stocks, providing diversification and liquidity within a Shariah-compliant framework. These ETFs offer investors exposure to a basket of Shariah-compliant stocks across various sectors.

Wealth Accumulation Strategy
Systematic Investment Plan (SIP)
Implement a SIP approach, allocating a portion of your monthly income to Shariah-compliant investment avenues, fostering disciplined wealth accumulation over time. SIPs allow for regular and systematic investment, enabling you to benefit from rupee cost averaging and the power of compounding.

Asset Allocation and Diversification
Employ prudent asset allocation strategies, diversifying your investment portfolio across various Shariah-compliant asset classes to mitigate risk and optimize returns. A well-diversified portfolio helps spread risk and enhances the potential for long-term wealth creation.

Goal-Based Financial Planning
Defining Financial Objectives
Define clear financial goals, including the target corpus of 1.5 crore by age 50, and tailor your investment strategy to align with these objectives. Consider factors such as risk tolerance, time horizon, and liquidity requirements when crafting your financial plan.

Regular Portfolio Review
Regularly review and rebalance your investment portfolio, ensuring alignment with Shariah principles and adjusting your asset allocation as per changing market dynamics. Periodic portfolio reviews help you stay on track towards your financial goals and make necessary adjustments when required.

Seeking Professional Guidance
Consultation with Certified Financial Planners (CFPs)
Engage with Certified Financial Planners specializing in Shariah-compliant investing, seeking personalized advice to optimize your investment strategy and achieve your financial goals. A CFP can help you navigate the complexities of Shariah-compliant investing and provide tailored recommendations based on your unique circumstances.

Continuous Learning and Education
Stay informed about developments in Shariah-compliant investment options and financial planning strategies, empowering yourself to make informed investment decisions aligned with your values. Continuous learning and education are essential for staying abreast of market trends and maximizing investment opportunities.

By embracing a diversified approach to Shariah-compliant investing and seeking guidance from Certified Financial Planners, you can navigate the investment landscape with confidence and work towards realizing your financial aspirations while upholding your religious beliefs.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Moneywize |108 Answers |Ask -Follow

Financial Planner - Answered on May 21, 2024

Asked by Anonymous - May 16, 2024Hindi

Money

I recently graduated in my mid-20s with an entry-level job earning Rs 36 lakhs annually. How can I start building a strong financial foundation for the future, considering my current income and career stage?

Ans: Congratulations on graduating and starting your career! That's an exciting time, and with a starting salary of Rs 36 lakh, you're in a good position to build a strong financial foundation for the future. Here are some steps you can take:

1. Track your income and expenses: This is the first crucial step. Understanding where your money goes will help you identify areas to save and budget effectively. There are many budgeting apps and spreadsheets available to help you with this.

2. Create a budget: Once you've tracked your expenses for a month or two, categorise them into needs (rent, groceries, transportation), wants (entertainment, dining out), and debt repayments. Aim to allocate a higher percentage towards needs and debt repayment, and a smaller percentage towards wants.

3. Build an emergency fund: Having an emergency fund of 3-6 months' worth of living expenses will act as a safety net for unexpected events like job loss or medical bills. Aim to save at least Rs 1-2 lakh initially and gradually build it up.

4. Manage your debt: If you have any student loans or credit card debt, prioritize paying them off. High-interest debt can quickly eat away at your savings. Consider a debt snowball strategy, where you focus on paying off the smallest debt first to gain momentum.

5. Start saving for retirement: Even though retirement might seem far off, starting early allows you to benefit from compound interest. Many companies in India offer Employee Provident Fund (EPF) schemes, where a portion of your salary goes towards retirement savings. You can also explore investing in Public Provident Fund (PPF) or National Pension System (NPS) for long-term wealth creation.

6. Invest for your goals: Once you have an emergency fund and are on track with debt repayment, consider investing for your future goals. This could be anything from a down payment on a house to a dream vacation. Research different investment options like mutual funds or stocks based on your risk tolerance and investment horizon.

Additional tips for your mid-20s:

• Live below your means: Don't let lifestyle inflation creep in as your income increases.
• Focus on skill development: Invest in yourself by taking courses or certifications that can help you advance in your career and potentially increase your earning potential.
• Automate your finances: Set up automatic transfers to your savings and investment accounts to ensure consistent saving.
• Seek professional advice: Consider consulting a financial advisor for personalized guidance based on your specific financial situation and goals.

Remember, building a strong financial foundation is a marathon, not a sprint. Be patient, consistent, and disciplined with your finances, and you'll be well on your way to a secure future.

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Question by Ch - May 20, 2024Hindi

Money

Sir, I'm 50yrs old. I earn rs 60p.m. kindly suggest low risk mutual fund so that I can get pension from ,60 yrs to 70 yrs.

Ans: Building a Low-Risk Mutual Fund Strategy for Your Retirement Pension
It's wise to plan ahead for your retirement years, and mutual funds can play a crucial role in generating a steady income stream. Let's explore a low-risk mutual fund strategy tailored to your needs.

Understanding Your Retirement Needs
Income Requirement
With a monthly income target of Rs 60,000 during your retirement years from 60 to 70, ensuring a stable and reliable income source is essential.

Risk Preference
Considering your preference for low-risk investments, prioritizing capital preservation while generating consistent returns is paramount.

Low-Risk Mutual Fund Selection Criteria
Stability
Focus on mutual funds with a history of stable performance and lower volatility, minimizing the risk of significant fluctuations in your investment value.

Consistent Returns
Prioritize funds with a track record of delivering steady returns over the long term, aligning with your goal of sustaining a reliable pension income.

Diversification
Opt for mutual funds that offer diversification across asset classes, such as a balanced mix of equity and debt securities, to mitigate risk effectively.

Recommended Mutual Fund Categories
Debt Mutual Funds
Allocate a substantial portion of your investment towards debt mutual funds, which primarily invest in fixed-income securities, providing stable returns with relatively lower risk.

Conservative Hybrid Funds
Consider conservative hybrid funds, which maintain a conservative allocation to equities while predominantly investing in debt instruments, striking a balance between growth and stability.

Short-Term Debt Funds
Explore short-term debt funds, which invest in fixed-income securities with shorter maturity periods, offering stability and liquidity while minimizing interest rate risk.

Retirement Income Strategy
Systematic Withdrawal Plan (SWP)
Implement a systematic withdrawal plan (SWP) from your selected mutual funds, allowing you to receive a regular income stream while keeping your principal amount invested.

Regular Portfolio Review
Periodically review your mutual fund portfolio to ensure it continues to meet your income requirements and risk tolerance, making adjustments as needed.

Final Thoughts
Professional Guidance
Consider consulting with a Certified Financial Planner to tailor your mutual fund strategy according to your retirement goals and risk profile, ensuring a secure financial future.

By strategically allocating your investments across low-risk mutual fund categories, you can build a retirement portfolio designed to provide a steady pension income during your golden years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Asked by Anonymous - May 20, 2024Hindi

Money

Hi sir, I am 39 year old. Invested in stocks upto 1 lakh.Invested in gold for 2lakhs. Invested in ppf upto 13 lakhs and continuing it, investing in SSY upto 1lakhs from 2019 for girl child.Invested in NPS upto 1 lakh. Having term insurance for 2cr paying 3800rs per month. Having endowment policy for next 21 years. Having medical insurance upto 30 lakh sum assured having premium about 70k per year for myself, dependant and a kid. Having medical insurance sum assured upto 5 lakh each for parents having premium of 42k per year. Having a car loan of 20lakhs for next 4 years, having a personal loan of upto 4 lakhs and will end up in December. Planning for retirement corpus of 5 cr in next 15 years, and planning for child higher education for 12 years with 2 cr and marriage in next 20 years for another 2cr. Planning to buy plot in 3 years worth 75 lakhs, Which mutual fund needs to be considered to achieve these goal?

Ans: Crafting a Mutual Fund Strategy for Your Financial Goals
It's commendable that you're actively planning for your financial future. Let's outline a strategic approach using mutual funds to achieve your goals.

Assessing Financial Goals
Retirement Corpus
Your target retirement corpus of 5 crores in 15 years requires a disciplined investment strategy with a focus on long-term wealth creation.

Child's Higher Education and Marriage
For your child's education and marriage, aiming for a combined corpus of 4 crores over the next 12 and 20 years, respectively, necessitates a balanced investment approach.

Plot Purchase
Planning to buy a plot worth 75 lakhs in 3 years requires short to medium-term investment options with capital appreciation potential.

Mutual Fund Selection Criteria
Goal Horizon
Align mutual fund selections with the time horizon of each financial goal, focusing on funds with proven track records of consistent returns over the required investment duration.

Risk Appetite
Consider your risk tolerance and opt for a diversified mix of mutual funds spanning various asset classes to mitigate risk while aiming for optimal returns.

Tax Efficiency
Select mutual funds that offer tax efficiency, such as equity-linked saving schemes (ELSS), to leverage tax benefits while investing for long-term goals.

Recommended Mutual Fund Categories
Equity Mutual Funds
Allocate a significant portion of your investment towards equity mutual funds for long-term wealth accumulation, considering the growth potential of equities over time.

Debt Mutual Funds
Include debt mutual funds in your portfolio for stability and capital preservation, especially for short to medium-term goals like the plot purchase.

Hybrid Mutual Funds
Explore hybrid mutual funds, which offer a balanced mix of equity and debt exposure, suitable for investors seeking moderate risk with potentially higher returns.

Final Thoughts
Regular Portfolio Review
Periodically review your mutual fund portfolio to ensure it remains aligned with your financial goals and risk tolerance, making adjustments as necessary.

Professional Guidance
Consider consulting with a Certified Financial Planner to tailor your mutual fund investment strategy according to your unique financial circumstances and objectives.

By strategically allocating your investments across equity, debt, and hybrid mutual funds, you can work towards achieving your financial goals efficiently.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Question by Ram - May 20, 2024Hindi

Money

Good morning sir. I am investing in SBI midcap, small cap and health care opportunities fund at the rate of Rs 10000 per month respectively and Rs 5000/- each in ICICI equity funds. Kindly suggest whether to contiue or to switch to other

Ans: It's great to see your proactive approach towards investing. Let's assess your current mutual fund investments and explore whether any adjustments are needed.

Reviewing Current Investments
Diversification Strategy
Your investment strategy reflects a diversified approach by investing in midcap, small cap, healthcare, and equity funds.

Performance Analysis
Evaluate the performance of your current funds against relevant benchmarks to gauge their effectiveness in meeting your financial goals.

Considerations for Continuation or Switching
Fund Performance
Assess the historical performance of each fund to determine if they consistently outperform their benchmarks.

Risk Appetite
Consider your risk tolerance and ensure your investment choices align with your risk appetite and financial goals.

Potential Action Steps
Consultation with a Certified Financial Planner
Seek guidance from a Certified Financial Planner (CFP) to review your investment portfolio comprehensively and ensure it aligns with your financial objectives.

Periodic Portfolio Review
Regularly review your investment portfolio to stay informed about market trends and make necessary adjustments based on changing economic conditions.

Final Recommendation
Stay Informed
Stay updated on market developments and seek professional advice when considering changes to your investment strategy.

By regularly reviewing your mutual fund portfolio and consulting with a Certified Financial Planner, you can make informed decisions to optimize your investments and work towards your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Asked by Anonymous - May 20, 2024Hindi

Money

Hi, I am 46. I would like to retire in the next 3 years. My current corpus is broken up as ; a. 4.8 cr in equity b. 2 cr in MF c. 1.6 cr in EPF d .8 cr in real estate e .8 cr in FD f .3 cr in jewelry. in scenario 1; my month essential expenses annualized are approx 30 lakhs and discretionary annulized expenses are 10 lakhs...in scenario 2, my essential exp are 22 lakhs and discr exp annualized at 8 lakhs. Can you help me understand what is the corpus i need on reaching which i can manage the current expenses comfortably in both scenarios. and what should the ideal swp % be in both scenarios. Thanks.

Ans: Planning for Retirement: Understanding Corpus Requirements and SWP Strategy
Congratulations on contemplating retirement! Let's delve into analyzing your current corpus and determining the ideal corpus required to comfortably manage your expenses in both scenarios, along with suggesting suitable SWP percentages.

Assessing Current Corpus Allocation
Diversified Portfolio
Your current corpus is well-diversified across various asset classes, including equity, mutual funds, EPF, real estate, FDs, and jewelry.

Analysis of Scenarios
In Scenario 1, your essential expenses are higher at 30 lakhs annually, with discretionary expenses amounting to 10 lakhs annually. In Scenario 2, essential expenses decrease to 22 lakhs annually, with discretionary expenses reduced to 8 lakhs annually.

Calculating Required Corpus
Essential Expenses Coverage
To comfortably cover essential expenses in Scenario 1, you require a corpus that can generate an annual income of 30 lakhs. Similarly, for Scenario 2, a corpus generating 22 lakhs annually is needed.

Discretionary Expenses Coverage
For discretionary expenses in Scenario 1, a corpus generating an additional 10 lakhs annually is required. In Scenario 2, this reduces to 8 lakhs annually.

Determining Ideal SWP Percentage
SWP Strategy
Systematic Withdrawal Plans (SWPs) allow you to withdraw a fixed amount regularly from your investment corpus. The SWP percentage depends on various factors such as expected returns, inflation, and investment duration.

Considerations for SWP Percentage
Expected Returns: Higher expected returns may allow for a lower SWP percentage, while lower returns necessitate a higher SWP percentage to meet expenses.

Inflation: Consider the impact of inflation on your expenses and adjust the SWP percentage accordingly to ensure sustained purchasing power.

Final Recommendations
Required Corpus
Based on your essential and discretionary expense calculations, you require a corpus that generates 30 lakhs annually for Scenario 1 and 22 lakhs annually for Scenario 2.

SWP Percentage
The ideal SWP percentage will vary based on factors such as expected returns, inflation, and investment duration. A conservative estimate would be to target an SWP percentage that ensures the preservation of your corpus while meeting your annual expense requirements.

Conclusion
By analyzing your current corpus, understanding your expense scenarios, and considering SWP strategies, you can effectively plan for retirement and ensure financial security in your post-retirement years. It's advisable to consult with a Certified Financial Planner (CFP) to tailor a retirement plan that aligns with your goals and financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Question by Manabendra - May 20, 2024Hindi

Money

Hello I want to invest monthly 7000 , how much amount can I get return and which sip will be buy? Can you suggest. When I return total amount from mutual funds then tax would be deducted on total amount return and what is percentage.

Ans: Maximizing Returns Through Systematic Investment Planning (SIP)
Investing through Systematic Investment Plans (SIPs) can be an effective way to achieve your financial goals while benefiting from the power of compounding. Let's explore how you can optimize your investment of Rs 7000 per month through SIPs and understand the tax implications upon redemption.

Assessing Investment Returns
Expected Returns
With a monthly investment of Rs 7000, the returns generated will depend on various factors such as the chosen mutual fund's performance, investment duration, and market conditions. Generally, mutual funds offer potential returns ranging from 8% to 12% per annum over the long term.

Selecting SIPs
Choose mutual fund schemes that align with your investment objectives, risk tolerance, and time horizon. Opt for diversified equity funds or balanced funds with a proven track record of consistent returns and prudent fund management.

Understanding Taxation on Mutual Fund Returns
Tax on Redemption
Upon redeeming your mutual fund investments, the tax implications vary based on the holding period and the type of mutual fund.

Long-Term Capital Gains (LTCG)
For equity-oriented mutual funds held for more than one year, long-term capital gains exceeding Rs 1 lakh in a financial year are subject to a flat tax rate of 10% without indexation benefit.

Short-Term Capital Gains (STCG)
Short-term capital gains on equity-oriented mutual funds held for one year or less are taxed at a rate of 15%.

Estimating Tax Liability
Calculation Example
Suppose your total redemption amount from mutual funds exceeds Rs 1 lakh in a financial year. In that case, you will be liable to pay 10% tax on the long-term capital gains exceeding Rs 1 lakh. For short-term gains, the tax rate is 15%.

Consultation with a Tax Advisor
It's advisable to consult with a tax advisor or Certified Financial Planner (CFP) to accurately assess your tax liability based on your investment portfolio and financial circumstances. They can provide personalized guidance and strategies to minimize tax outflows legally.

Conclusion
By investing Rs 7000 monthly through SIPs in suitable mutual fund schemes, you can potentially achieve attractive returns over time, leveraging the benefits of compounding. However, it's crucial to remain cognizant of the tax implications upon redemption and plan your investments strategically to optimize after-tax returns.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Asked by Anonymous - May 20, 2024Hindi

Money

We (me and my wife 37 yrs each) have a corpus of 1.82 Cr spread across 23 lacs in PPF, 22 lacs in EPF, 1 lac in MF, 50k in Stock and rest 1.35 cr in FDs. Now recently started investing in MFs (35k per month). Currently both are earning sum of 3.5 lacs per month with no liability with only fixed expenses of 60k per month. Kindly advise to grow our fund at a faster rate, as we are planning to retire early by 45 years of age, Thx

Ans: Accelerating Wealth Growth for Early Retirement
Congratulations on your prudent financial management and proactive approach to early retirement planning. Let's explore strategies to optimize your investment portfolio and expedite wealth accumulation to achieve your goal of retiring by age 45.

Assessing Current Financial Position
Strong Foundation
You've established a solid financial foundation with a diverse portfolio comprising PPF, EPF, MFs, stocks, and FDs, coupled with a healthy combined monthly income and minimal fixed expenses.

Potential for Growth
While your current investments provide stability, there's room to enhance wealth growth by leveraging strategic investment avenues and optimizing asset allocation.

Enhancing Investment Strategy
Maximizing Equity Exposure
Consider increasing allocation towards equity-based investments, such as mutual funds and direct stocks, to capitalize on their long-term growth potential and generate higher returns compared to traditional fixed-income instruments.

Systematic Investment Approach
Continue your disciplined approach to investing by allocating a substantial portion of your monthly savings towards mutual funds, aiming for a diversified portfolio that aligns with your risk tolerance and investment goals.

Exploring Alternative Investment Avenues
Exploring Opportunities
Diversify your investment portfolio further by exploring alternative investment avenues like debt funds, gold ETFs, or systematic investment plans (SIPs) in thematic funds to mitigate risk and optimize returns.

Tax-Efficient Strategies
Optimize tax efficiency by utilizing tax-saving investment instruments like Equity Linked Savings Schemes (ELSS) and Voluntary Provident Fund (VPF) contributions to maximize tax deductions while simultaneously growing your wealth.

Regular Portfolio Review and Rebalancing
Ongoing Monitoring
Regularly review your investment portfolio's performance and make necessary adjustments to ensure alignment with your financial objectives and risk appetite.

Rebalancing Strategy
Implement a disciplined rebalancing strategy to reallocate assets periodically and maintain the desired asset allocation mix, ensuring optimal risk-adjusted returns and portfolio stability.

Financial Planning for Retirement
Comprehensive Retirement Planning
Engage the services of a Certified Financial Planner (CFP) to develop a comprehensive retirement plan tailored to your specific needs, incorporating factors like inflation, healthcare costs, and lifestyle preferences.

Retirement Corpus Projection
Utilize retirement calculators and financial modeling tools to project the required corpus for early retirement and determine the optimal savings rate and investment strategy to achieve this goal within the desired timeframe.

Conclusion
By adopting a proactive and strategic approach to wealth management, coupled with disciplined savings and prudent investment decisions, you can accelerate wealth growth and realize your aspiration of early retirement by age 45. Remember to seek guidance from a Certified Financial Planner (CFP) to navigate complex financial decisions effectively and ensure long-term financial security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Asked by Anonymous - May 20, 2024Hindi

Money

We are a young couple with a combined monthly income of Rs 4.8 lakhs. Our goal is to create a retirement fund of Rs 20 crores in the next 30 years while planning for the arrival of our future children. How can we structure our financial plan to achieve these objectives?

Ans: Structuring Your Financial Plan for Retirement and Future Goals
Congratulations on your proactive approach towards financial planning! Let's outline a structured financial plan to achieve your long-term objectives of building a substantial retirement fund and preparing for the arrival of your future children.

Assessing Financial Goals
Retirement Fund Target
Your ambitious goal of accumulating Rs 20 crores for retirement in the next 30 years requires diligent planning and disciplined saving. We'll break down this target into manageable steps to ensure steady progress towards your objective.

Planning for Future Children
Preparing for the financial responsibilities associated with raising children requires careful consideration. We'll factor in potential expenses related to their education, healthcare, and overall well-being into your financial plan.

Budgeting and Saving Strategy
Establishing a Budget
Start by creating a detailed budget that accounts for your combined monthly income of Rs 4.8 lakhs. Allocate funds towards essential expenses, savings, investments, and discretionary spending, ensuring a balance between current needs and future goals.

Emphasizing Savings Discipline
Cultivate a culture of disciplined saving by setting aside a fixed portion of your income towards your retirement fund and future children's needs. Automate savings where possible to ensure consistency and avoid temptation to overspend.

Investment Strategy
Diversified Portfolio Allocation
Construct a diversified investment portfolio comprising a mix of equity, debt, and alternative investments to mitigate risk and optimize returns over the long term. Avoid over-reliance on any single asset class to ensure portfolio resilience.

Active Management Approach
Opt for actively managed funds over passive options like index funds or ETFs to capitalize on potential market opportunities and navigate market volatility effectively. Active management offers the advantage of professional expertise and flexibility in portfolio management.

Retirement Planning
Retirement Corpus Accumulation
Utilize retirement calculators and projections to estimate the required monthly contributions towards your retirement fund to achieve the Rs 20 crores target in 30 years. Adjust contributions periodically based on changing financial circumstances and investment performance.

Retirement Corpus Preservation
As you approach retirement, gradually shift your investment strategy towards more conservative options to safeguard your accumulated corpus from market volatility and ensure a steady stream of income during retirement years.

Future Child Planning
Education and Healthcare Provision
Set up dedicated investment accounts or education funds to cover future expenses related to your children's education, including school fees, tuition, and extracurricular activities. Additionally, allocate funds towards healthcare expenses and insurance coverage for your family.

Estate Planning
Initiate the process of estate planning by drafting wills, establishing trusts, and appointing guardians for your children's welfare in the event of unforeseen circumstances. Regularly review and update your estate plan to reflect changing life circumstances.

Conclusion
By following a structured financial plan tailored to your long-term goals, you can achieve financial security and provide for your future children's needs while building a substantial retirement fund. Stay committed to your financial objectives and seek guidance from a Certified Financial Planner (CFP) to navigate complex financial decisions effectively.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |2798 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Asked by Anonymous - May 20, 2024Hindi

Money

Hey it is Sumit aged 35 I am planning a retirement at age range of 45 - 50 My investment plannings are mentioned below 1) LIC which will mature in 2034 with amount of 29 lakh 2) one long term plan in sbi with 1 lakh premium ( High risk) every year which will give lum- Sum 1cr plus at age of 58 to my wife 3) one more long term plan of 10000 per month ( High Risk ) which will also give 1 CR plus at age of 60 to me My Net port folio of stock is currently 5 lakh and planning to invest 25 lakh from my side in next two year ( Note profit is not included ) I have one Land at home town and planning to buy one flat at working place Liability - around 18 lakh Kindly guide is it sufficient to take early retirement with monthly income after retirement near around one lakh

Ans: Sumit, it's commendable that you're planning ahead for your retirement at such a relatively young age. Let's evaluate your investment strategies and assess the feasibility of achieving your retirement goals.

Current Investment Portfolio
Your investment portfolio comprises a mix of insurance, long-term plans, stock investments, and property ownership. While each component has its merits, we'll explore if they align with your retirement objectives.

Evaluating Insurance Policies
Surrendering LIC Policies
Consider surrendering your LIC policies, which mature in 2034, and reinvesting the proceeds into more growth-oriented avenues like mutual funds (MFs). This move can potentially enhance your returns.

Risk Assessment of Long-term Plans
Evaluate the risk associated with the long-term plans for you and your wife. While aiming for a lump sum of Rs 1 crore+ sounds appealing, ensure the risk matches your risk appetite and financial goals.

Realigning Investments for Retirement
Reviewing Stock Portfolio
Assess your stock portfolio's growth potential and consider reallocating funds to diversified MFs for better risk management and potentially higher returns over the long term.

Addressing Liabilities
Mitigate your liability of around Rs 18 lakhs strategically. Consider leveraging your assets like land or the proposed flat purchase to optimize your financial position.

Feasibility of Early Retirement
Retirement Corpus Calculation
Calculate the total retirement corpus required to sustain your lifestyle post-retirement. Include factors like inflation, healthcare expenses, and any unforeseen contingencies.

Monthly Income Requirement
Estimate your monthly income requirement post-retirement, aiming for around Rs 1 lakh. Ensure your retirement corpus generates sufficient passive income to meet this target.

Surrendering LIC Policies for MF Investment
Advantages of MFs over Insurance
Mutual funds offer higher growth potential and flexibility compared to traditional insurance policies. They provide diversified exposure to various asset classes, catering to different risk profiles.

Consultation with a Certified Financial Planner
Seek advice from a Certified Financial Planner (CFP) to assess the optimal strategy for surrendering LIC policies and reinvesting in MFs. A CFP can provide personalized guidance tailored to your financial situation and goals.

Conclusion
Sumit, achieving early retirement with a comfortable monthly income is feasible with careful planning and strategic realignment of your investment portfolio. Surrendering LIC policies and reinvesting in MFs, along with prudent management of liabilities, can pave the way for a financially secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

See more questions »

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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