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Ramalingam

Ramalingam Kalirajan  |8204 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 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
Meenatchi Question by Meenatchi on Feb 28, 2024Hindi
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Hello Dev, I am 32 years old and would like to start SIP for 5k per month to create retirement corpus of 1 crore. Also would like to generate 30 lacs in another 10 years for closing housing loan. Already have three MF SIP as below. Quant active fund 1000 Quant ELSS tax saver fund 500 ICICI prudential corporate bond fund 150 Kindly suggest in which MF should I invest further and also how much should I increase the SIP amount to achieve the above goals. Thank you.

Ans: It's great to see your proactive approach towards planning for your financial future. Your dedication to investing is commendable.
Starting an SIP with 5k per month is a wise decision to create a retirement corpus of 1 crore. Additionally, generating 30 lakhs in 10 years to close your housing loan is a smart goal.
Considering your existing SIPs in Quant Active Fund, Quant ELSS Tax Saver Fund, and ICICI Prudential Corporate Bond Fund, you have a good foundation. However, to diversify your portfolio and align it with your goals, you may want to consider the following suggestions:
1. Equity-oriented funds with higher growth potential can help you achieve your long-term goals. Look into diversified equity funds or multi-cap funds for exposure to various segments of the market.
2. Since your investment horizon is long-term, you can afford to take slightly higher risks for potentially higher returns. Adding more equity-oriented funds can help you achieve this.
3. To generate the required amount for your housing loan closure in 10 years, you may need to increase your SIP amounts gradually. Consider reviewing your financial situation periodically and increasing your SIP contributions accordingly.
4. As a Certified Financial Planner, I recommend staying disciplined with your investments and adhering to your financial plan. Regularly review your portfolio's performance and make adjustments as needed to stay on track towards your goals.
By diversifying your portfolio and gradually increasing your SIP amounts, you can work towards achieving your financial objectives effectively.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8204 Answers  |Ask -

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

Asked by Anonymous - Apr 07, 2024Hindi
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Hello, I am 32 years old and would like to start SIP for 5k per month to create retirement corpus of 1 crore. Also would like to generate 30 lacs in another 10 years for closing housing loan. Already have three MF SIP as below. Quant active fund 1000 Quant ELSS tax saver fund 500 ICICI prudential corporate bond fund 150 Kindly suggest in which MF should I invest further and also how much should I increase the SIP amount to achieve the above goals. Thank you.
Ans: Building Your Retirement Corpus and Closing Your Home Loan: A Two-Pronged Approach
Starting an SIP at 32 is a great decision! Let's analyze your current situation and suggest ways to achieve your goals:

Current SIPs:

Diversification: Your existing SIPs cover some diversification with a large-cap fund (Quant Active), tax-saving (Quant ELSS), and a debt fund (ICICI Prudential Corporate Bond).

Goal Alignment: Review if your existing SIP allocations are aligned with your goals. Consider increasing the debt fund SIP for your short-term goal (closing home loan).

Reaching Your Goals:

Retirement Corpus: Creating a ?1 crore corpus in a specific timeframe requires considering factors like investment horizon, risk tolerance, and expected returns. A CFP can help with calculations based on realistic assumptions.

Home Loan Closure: Generating ?30 lacs in 10 years is achievable with a focused approach. Debt funds and balanced funds can be suitable options, offering stability and some growth potential.

SIP Allocation and Increase:

Debt SIP Increase: Consider increasing your SIP in ICICI Prudential Corporate Bond Fund (or a similar debt fund) to accelerate your home loan closure.

New SIP for Retirement: Start a new SIP for retirement, focusing on equity funds with a longer investment horizon. Actively managed equity funds involve experienced fund managers who try to pick stocks to outperform the market. Actively managed funds come with higher fees compared to passively managed funds.

Risk Tolerance: Choose a mix of equity funds (large-cap, mid-cap) based on your risk tolerance. A CFP can help you determine the ideal asset allocation.

Professional Guidance:

Personalized Plan: A Certified Financial Planner (CFP) can create a detailed SIP plan considering your risk tolerance, financial goals, and existing investments. They can recommend specific debt and equity funds based on your needs and suggest appropriate SIP amounts for each goal.
Remember:

Regular Review: Review your SIPs (at least annually) to ensure they remain aligned with your evolving goals and risk tolerance.

Market Fluctuations: Equity markets are volatile. Stay invested for the long term to ride out market ups and downs.

By taking action now, diversifying your SIPs, and potentially seeking professional guidance, you can work towards achieving your financial goals!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8204 Answers  |Ask -

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

Asked by Anonymous - Apr 07, 2024Hindi
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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.

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8204 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 08, 2025

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I am 51 years want to park 10 L recieved from LIC. I have Nippon liquid and Axis Short term funds. Where should I keep this,in these debt fund or some other for max return and least risk . Or some balanced advantage funds?
Ans: Since you're 51 years old and the Rs. 10L is from an LIC maturity, I’ll assess this from a 360-degree perspective with low risk and reasonable return focus.

Let us structure this under simple and clear headings:

Understand the Nature of the Rs. 10L
This is a one-time amount, not a regular income.

So, capital protection is important.

Also, some growth is expected, but not with high risk.

Evaluate Your Existing Funds
Nippon Liquid Fund is very low risk.

Good for short-term parking, like few months.

Returns are around 5.5% to 6% yearly.

You can use it if you need money anytime soon.

Axis Short Term Fund is slightly better return.

Slightly higher risk than liquid fund, but still low.

Returns can be around 6% to 7% yearly.

Suitable if you are okay to stay invested for 2-3 years.

Should You Switch to a Balanced Advantage Fund?
These funds invest in both equity and debt.

They adjust the mix based on market conditions.

They give better return than debt if held for 3-5 years.

But, they carry moderate market risk.

Return range can be 8% to 10% per annum.

Not guaranteed, but historically stable.

Suitable if your risk tolerance is moderate.

Also, you must stay invested for at least 3 years.

What You Can Do Now (Allocation Suggestion)
Here is a simple, low-risk and flexible suggestion:

Rs. 2L in Nippon Liquid Fund: For immediate needs.

Rs. 4L in Axis Short Term Fund: Safe with better return.

Rs. 4L in Balanced Advantage Fund (via MFD with CFP): For better growth.

Choose an actively managed regular plan.

Avoid direct plan. They lack support and monitoring.

Regular plans offer advisor support and rebalancing guidance.

Why Not Direct Plan?
Direct plans look cheaper.

But they don’t guide you during market falls.

Many investors panic and exit early.

This leads to poor returns.

With MFD + CFP support, you stay invested longer.

Long-term behaviour matters more than cost.

Why Not Index Funds?
Index funds blindly follow the market.

No protection during market fall.

No fund manager to adjust strategy.

Active large-cap or balanced funds adapt better.

At your age, protection is more important than chasing index.

Important Tax Point
Debt funds and balanced advantage funds are taxed as per income tax slab.

If you hold for 3+ years, tax is less due to indexation benefit in earlier rules.

But now, for debt funds, tax is same as your slab.

So, choose based on your tax slab also.

But do not let tax alone decide. Safety is first.

Final Insights
Your Rs. 10L should grow slowly and stay safe.

Split into 3 buckets: short-term, mid-term, and medium-risk.

Liquid fund for liquidity.

Short-term debt for capital stability.

Balanced advantage for gentle growth.

This mix gives you flexibility, return and low risk.

Please review once a year with a Certified Financial Planner.

He/she will help you shift the mix if your goal or market changes.

No need to chase high returns. Protect capital, grow steadily.

You already took a right step by asking before investing.

That clarity helps avoid mistakes.

With this structure, your money can stay safe and still grow.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...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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