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Ramalingam

Ramalingam Kalirajan  |7592 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 09, 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
S Question by S on May 03, 2023Hindi
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Hello sir Good day to you. I have a home loan of Rs 25 Lakhs and land loan of Rs 20 Lakhs. Home loan ROI is 8.5% and land loan ROI is 8%. I am presently investing Rs. 52k monthly in MF via sip route. I have been investing for the past 3 years. My question to you is: Should I close the loan first after stopping all sips or continue investing via. SIP. My aim is to create wealth in long term for next 20 years.

Ans: Consider comparing the interest rates on your loans with potential returns from your MF SIPs. If the MF returns consistently outperform loan interest rates after considering tax implications and risk, continuing SIPs may be beneficial for wealth creation. However, if loan interest rates significantly exceed potential MF returns, prioritizing loan repayment can lead to substantial interest savings over the long term. Assess your risk tolerance, financial goals, and liquidity needs before making a decision. Consulting with a financial advisor can provide personalized insights to optimize your financial strategy.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |7592 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 06, 2024

Asked by Anonymous - Apr 06, 2024Hindi
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I have 36L in mutual fund SIP with 38%xirr, 10L in equity, recently have taken loan of 40L with 9.5%int. to purchase property I need advice should I sell mutual funds/equity and repay loans or should I continue with SIP
Ans: Considering your financial situation, it's essential to weigh the pros and cons of each option before making a decision. Here are some factors to consider:

Loan Repayment: Repaying the loan of 40 lakhs with a 9.5% interest rate is crucial to avoid accumulating excessive interest payments over time. By repaying the loan early, you can reduce the overall interest burden and free up cash flow for other financial goals.
Mutual Fund SIPs: Your mutual fund SIPs have provided a healthy return of 38% XIRR, indicating good growth potential. However, continuing with SIPs while carrying a high-interest loan may not be the most efficient use of your funds. It's important to assess whether the returns from your SIPs outweigh the interest cost of the loan.
Equity Investments: Equity investments can be volatile in the short term but tend to offer higher returns over the long term. If your equity investments are performing well and you have a longer investment horizon, you may consider holding onto them, especially if you believe they will outperform the loan interest rate.
Financial Goals: Evaluate your financial goals and priorities. If repaying the loan enables you to achieve other important goals such as financial security, peace of mind, or future investments, it may be worth considering.
Risk Tolerance: Consider your risk tolerance and comfort level with debt. Carrying a significant amount of debt can increase financial stress and limit your flexibility in the future. Assess whether you are comfortable managing both the loan and investment risks simultaneously.
Consult a Financial Planner: Given the complexity of your situation, it's advisable to consult with a Certified Financial Planner (CFP) who can provide personalized advice based on your specific circumstances, goals, and risk profile. A financial planner can help you evaluate the trade-offs and make an informed decision aligned with your long-term financial well-being.
Ultimately, the decision to sell mutual funds/equity to repay the loan or continue with SIPs depends on various factors, including your financial goals, risk tolerance, investment horizon, and current market conditions. Take the time to carefully assess your options and seek professional guidance if needed to make the best decision for your financial future.

..Read more

Ramalingam

Ramalingam Kalirajan  |7592 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 02, 2024

Asked by Anonymous - Apr 18, 2024Hindi
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Hello Sir, I'm 35 year. And getting 28lpa. Currently I'm invest in 6 SIPs (31k) monthly, 5k in NPS, 26k is personal loan, 17k car emi and purchasing 15k stock in every month. Stock buying I started from jan2024. I have around 25lakh in my sip fund and 10lakh other fund. Now I'm planning to buy a home that cost around 90 lakh. So my question is, can take the 80% home loan and keep my SIP. Or withdraw my all sip fund and reduce home loan amount. Btw my personal loan will complete end of this year. Please suggest withdraw the sip fund is good option or taking the home loan is good option.
Ans: It sounds like you're making some big financial decisions, and it's great that you're considering your options carefully. Taking out a home loan while keeping your SIPs intact could be a strategic move. It allows you to maintain your investment momentum while also spreading out the cost of your home purchase over time.

However, withdrawing your SIP funds to reduce the home loan amount could also be a viable option. It would lower your debt burden and potentially save you on interest payments in the long run.

Before making a decision, consider factors like the interest rates on the home loan versus the potential returns on your SIP investments. Also, think about your long-term financial goals and how each option aligns with them.

Consulting with a financial advisor could provide valuable insight into the best course of action based on your specific circumstances and goals. With careful planning, you'll be on track to achieving your dream of homeownership while securing your financial future.

..Read more

Ramalingam

Ramalingam Kalirajan  |7592 Answers  |Ask -

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

Asked by Anonymous - May 21, 2024Hindi
Money
Hi myself 36 yrs old Started mf plan very late Luckily due to organisation switch got company stocks vested to me around 85 lacs and still around 60 lacs not yet vested . With that confidence I have taken home loan of 1.2cr for 25 yrs Emi amt 1 lac per month rate of interest 8.5 Not much invested earlier in mf started late around 1.5 yrs back Was able to accumulate 5 lacs total Invested in stocks around 2 lacs Now am trying to do sip every month of 42k I earn around 2.2lacs I have 2 more loans apart from home loan Personal loan of 26k emi 4 yrs pending Gold loan yearly emi payment of 6 lacs amount. Deduction of 1 lac + 26k+ 42k = 1.68 lacs goes to emis Yearly gold I have to pay around 60k without principal I consider 1.75 lacs to fixed amt goes as cuttings. I have remaining around 40k I think Home necessities cost around 15k monthly I still have around 20 to 25k remaining As I have started very late in mf I want to increase my sip for my kids education and future retirement plans I have something in mind which am bit afraid I want to sell stocks and invest in real estate and do the rotation of money for 10 years. But i have limited knowledge after doing some research . Should I go ahead with that ? Or Should I close my home loan using my stocks and reduce to 40 lacs home loan something Invest same amount in sips ? My stocks are in US market ..should I sell or not ? Company stocks are till now going well.. How high it would jump and how much it will take for that to happen I don't know Please suggest me to some investment ideas Q1. Should I close home loan Q2. Should I invest in real estate Q3. Should I invest stocks amt in mutual funds Any better ideas and suggestions please advise ..
Ans: Evaluating Your Financial Position
Your current financial situation reflects both opportunities and challenges. You have accumulated a significant amount of company stocks and started investing in mutual funds. Your home loan and other liabilities add to your monthly financial commitments. It's essential to strategically manage your investments to ensure long-term financial stability.

Assessing the Home Loan
Paying off your home loan can provide a sense of financial relief. However, consider the opportunity cost of using your stocks for this purpose. With an interest rate of 8.5%, the cost of maintaining the home loan is relatively high. Reducing your home loan can decrease your monthly EMI, providing more cash flow for investments and other expenses. However, before deciding, consider the potential growth of your stocks. If the stocks have significant growth potential, retaining them might be more beneficial in the long run.

Evaluating Real Estate as an Investment
Investing in real estate can be tempting, but it comes with several challenges. Real estate investments require substantial capital and involve high transaction costs. They also lack liquidity compared to stocks and mutual funds. The real estate market can be unpredictable, and managing properties requires time and effort. Given these factors, real estate might not be the best option for someone seeking to simplify and strengthen their financial portfolio.

Investing in Mutual Funds
Mutual funds offer a diversified investment option that can align with your financial goals. Given your late start in mutual funds, it’s wise to increase your SIPs to build a substantial corpus over time. Actively managed funds can offer better returns due to professional management. These funds allow you to benefit from the expertise of fund managers, providing a balanced risk-return ratio.

Disadvantages of Index Funds and Direct Funds
Index funds, while low-cost, do not always outperform actively managed funds. They mirror market performance, lacking the flexibility to adapt to market changes. On the other hand, direct mutual funds require active monitoring and decision-making. Investing through a Certified Financial Planner (CFP) can provide valuable insights and professional management, helping you navigate complex market conditions effectively.

Strategic Use of Stocks
Your company stocks are a significant asset. Diversifying this investment can reduce risk and enhance returns. Selling a portion of your stocks and investing in mutual funds can provide a balanced approach. This strategy diversifies your portfolio and reduces the risk associated with holding a single type of asset.

Recommendations
Reduce Home Loan: Consider partially reducing your home loan with your stocks. This will lower your EMI and interest burden, providing more cash flow for investments.

Avoid Real Estate: Given the high costs and management efforts involved, real estate might not be the best option. Focus on more liquid and manageable investments.

Increase SIPs in Mutual Funds: Boost your SIPs to build a robust financial corpus for your children’s education and retirement. Actively managed funds through a CFP can optimize your returns.

Diversify Stock Investments: Gradually sell a portion of your company stocks and diversify into mutual funds. This reduces risk and provides a balanced growth potential.

Conclusion
Your proactive approach to managing your finances is commendable. Balancing debt reduction with strategic investments can provide financial stability and growth. A diversified portfolio, professional management, and a focus on long-term goals will help secure your financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7592 Answers  |Ask -

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

Asked by Anonymous - Nov 10, 2024Hindi
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My age is 47 and I have invested 7.75 lakh in multiple stock and its grow arround 10 lakh from the past 2.5 years. I have 5.5 lakh home loan remaining . Should I withdraw these money and repay the home loan first and after that increase the SIP of that amount of mf .my current mf sip amount is 30k pm. Please suggest
Ans: Your query reflects careful consideration of financial priorities. Let's analyse whether using your stock investments to repay the home loan is the right step.

Evaluate the Existing Stock Portfolio
Your stock portfolio has grown from Rs 7.75 lakhs to Rs 10 lakhs in 2.5 years.

This indicates a strong return of approximately 29%. If these stocks have long-term growth potential, continuing to hold them might be advantageous.

Consider whether these stocks align with your risk tolerance and long-term financial goals.

Impact of Repaying the Home Loan
Your remaining home loan is Rs 5.5 lakhs. Paying this off will eliminate your EMI burden.

Repaying the loan early saves on interest costs, but assess the prepayment charges, if any.

Compare the effective interest rate on your home loan with the expected annualised return from your stock portfolio.

Home loan interest rates are usually lower compared to stock market returns over the long term.

Increasing SIP After Loan Repayment
Repaying the loan frees up EMI money that can be channelled into mutual fund SIPs.

By increasing SIPs, you benefit from disciplined investing and rupee cost averaging.

Use the additional SIPs to diversify into funds aligned with your risk profile and financial goals.

Considerations for Long-Term Wealth Creation
Mutual funds, especially actively managed ones, provide better diversification than direct stocks.

Your current SIP of Rs 30,000 per month is a good start. Increasing this amount post-loan repayment accelerates wealth creation.

Actively managed funds can outperform index funds through skilled fund management. Avoid direct funds unless you have deep knowledge and time to manage investments.

Evaluating Stock Liquidation
Selling your stocks could trigger capital gains tax. For gains above Rs 1.25 lakh, you will pay LTCG tax at 12.5%.

Factor in transaction costs and tax implications before selling.

Retain stocks that have strong fundamentals and growth prospects. Sell only non-performing or high-risk holdings.

Holistic Financial Planning
Build an emergency fund covering 6-12 months of expenses if you don’t already have one.

Ensure you have adequate life and health insurance coverage for your family’s security.

Maintain a balanced portfolio with exposure to equity, debt, and alternative assets.

Monitor your investments regularly and rebalance them to align with changing goals and risk tolerance.

Final Insights
If your home loan interest is significantly higher than potential stock returns, repayment is wise.

Otherwise, consider maintaining the stock portfolio and continuing your SIPs.

A mix of both strategies—partial loan repayment and increased SIPs—may offer balanced benefits.

Engage a Certified Financial Planner for a tailored strategy that ensures long-term financial success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

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Ravi

Ravi Mittal  |508 Answers  |Ask -

Dating, Relationships Expert - Answered on Jan 20, 2025

Asked by Anonymous - Jan 11, 2025Hindi
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Relationship
I am a 20 years old guy and in my past romantic relationships, have shown signs of emotional instability, too much dependency and lack of awareness of boundaries which affected my relationships badly...I hadn’t interacted with people in a long while since 2020 (precisely when lockdown had started) and feel that some aspects of my personality are not developed fully as they should be at this age. How to work on this? Also, i have noticed that I am able to create a good first impression but it soon pales and I feel like I am subtly disrespected or talked down to, and this has been happening in all interactions...i am always respectful (often to a fault!) and even have people pleasing tendencies...i sometimes ask immature weird questions and that might probably be the reason (but they’re never inappropriate)...but i do want to gain insights into why i am experiencing what i am and how to navigate this situation well so that I can maintain healthy relationships in future. Thanks you!
Ans: Dear Anonymous,
First of all, I want you to understand that it is no small feat to realize the quirks and imperfections in ourselves- you have done it. Your effort to understand and rectify them deserves to be acknowledged and appreciated.
Now, coming to your question, I can only give you some general advice on each-
Emotional instability and dependency- these behavioral patterns can stem from various factors; it can be a lack of confidence or some past issues that are left unresolved. It is difficult for me to tell you exactly why it is happening. It can also arise from a lack of validation. To manage it, you can focus on self-regulation- like meditation or journaling whenever you feel these emotions rising. This way you are expressing them but not damaging your relationships. Take up new hobbies or goals. Achieving milestones can build confidence.
Navigating Boundaries- You can speak to your partner in the early stage of the relationship to understand their boundaries. This way there will be clarity and you won't overstep. You can set up some boundaries too.
For better interpersonal skills, you can proactively follow some rules- like active listening, avoiding overthinking, asking open-ended questions, and resisting the urge to seek your partner's approval.
About the awkward questions- it is important to understand that you might perceive them as awkward, but the person opposite to you might think of it as a genuine curiosity. As long as it isn't intrusive or inappropriate, there are no awkward questions.
Like these, I can only offer you some general advice. But the best advice of them all would be to seek counseling. It has done wonders for people. And the first step, which is identifying the issues is already done. Bravo! What's wrong with taking a little professional help in navigating the next steps? They can guide you in a more structured manner.
Hope this helps.

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Kanchan

Kanchan Rai  |499 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jan 20, 2025

Asked by Anonymous - Jan 09, 2025Hindi
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Relationship
I’ve been in a relationship with a girl for the past 4 years, but due to various issues, things have become extremely complicated. Her father doesn’t approve of me, and my mother doesn’t like her either. Despite this, we’ve managed to stay together all these years. The problem is now escalating. My family is pressuring me to marry someone else, but I’m unable to leave her. At the same time, I feel I can’t marry her either because of her behavior and the ongoing issues with my family. I’ve tried to ask her to change certain things, but she hasn’t made any efforts in that direction. To make matters worse, her mother supports our relationship and trusts me, which makes it even harder for me to walk away. I don’t want her to marry someone else, but I also feel stuck because of my family’s expectations and the challenges in our relationship. Even If I leave her I don't know what she is going to do. What should I do in this situation to make the best decision for everyone involved?
Ans: it's crucial to reflect on what you truly want and need from a relationship. Ask yourself if this relationship brings you the happiness and fulfillment you seek, or if the challenges you face are too significant to overcome. It's important to differentiate between staying out of love and staying out of fear or obligation.

Talking to your partner openly is essential. Share your concerns honestly and listen to her perspective. If there are changes you've hoped for, express why they matter to you. At the same time, recognize that change is a two-way street—it requires effort and willingness from both sides. If she hasn't made efforts in the areas you've discussed, it may be worth considering whether this is a pattern that can be changed or a fundamental mismatch in expectations.

Your family's disapproval complicates things further, but it's important to remember that this is your life and relationship. While their opinions are significant, they shouldn't be the sole deciding factor in your happiness. Balancing respect for their wishes with your own needs is a delicate task, but ultimately, you need to make a decision that feels right for you.

If the relationship feels unsustainable despite your efforts, it may be time to consider a different path. It's understandable that you’re concerned about her well-being, especially given her mother's trust in you, but staying out of guilt or obligation can lead to further unhappiness for both of you. If you decide to part ways, doing so with kindness and honesty can help mitigate some of the hurt.

Ultimately, this decision is deeply personal. Weighing your feelings, the relationship dynamics, and your family's expectations will guide you toward a resolution that prioritizes your well-being and future happiness.

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Kanchan

Kanchan Rai  |499 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jan 20, 2025

Asked by Anonymous - Jan 09, 2025Hindi
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Relationship
My age is 41 years. I have two kids. Nurturing n looking after them n whole home single handedly. I am a visiting faculty in a institute . Earns very nominal earning. My husband hits me, taunts me and use very arrogant words to me like tumhe belt se maarunga n similar many worst words. His family has been always unsupportive to me . Now after 16 years of marriage, he still wants me to please his mother n other family. Which I completely avoid as they have never supported me and always boycotted me. His real brother is in politics and all family members including his cousins do follow him and boycotted me n husband. Now for everything my husband blames me and says if you gave pleased them, all might have good. But inspite of pleasing them a lot , they are like treating me like I am a stranger. I handle n manage everything still by the end of the day.... everything is in vain. Husband says...What you did for home? I will never ever give my money to you and so on. I am literally in trouble thoughts, what to do ? I even many times thought to end my life but my kids are the reason I continuously bears everything. Please suggest what shall I do.
Ans: it's important to acknowledge that no one deserves to be treated with such disrespect and abuse. Your feelings of isolation and frustration are valid. It can feel overwhelming when the people who should support you instead make you feel like an outsider.

In situations like this, it’s crucial to find support outside the immediate family. Reach out to trusted friends, family members, or support groups who can offer you emotional strength and practical advice. Consider speaking with a counselor or therapist who can help you navigate these complex emotions and provide strategies for dealing with the abuse and stress.

You’ve shown immense resilience, especially for your children. They need you to be strong, and seeking help is a vital step in preserving your mental and emotional well-being. Remember, prioritizing your health is not selfish; it’s necessary for you and your children’s future.

Also, explore any legal avenues or resources available for individuals in abusive relationships. Local support organizations, legal aid, or women’s shelters can provide advice and assistance if you decide that leaving the relationship is the best option for your safety and well-being.

You have already shown great courage by managing so much on your own. Continue to seek out support and know that you are not alone in this journey. There are people and resources willing to help you find a path to a healthier and more secure life.

...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.

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